Securities and Futures (Market Conduct) (Exemptions) Regulations

Securities and Futures Act

(Chapter 289, Section 337(1))

Rg 12

G.N. No. S 459/2002

REVISED EDITION 2004

(29th February 2004)

[29th February 2004]

Citation

1. These Regulations may be cited as the Securities and Futures (Market Conduct) (Exemptions) Regulations.

Definitions

2. In these Regulations, unless the context otherwise requires —

“dealer” means a person who is the holder of a capital markets services licence to deal in securities;

“Exchange” means the Singapore Exchange Securities Trading Limited;

“initial public offer”, in relation to securities, means the first public offer for subscription or sale of those securities in conjunction with the listing of those securities on the Exchange;

“issuer”, in relation to an initial public offer, means the person who issues the securities that are the subject of the initial public offer or, where the securities have been issued, the person making the offer to sell the securities;

“relevant securities”, in relation to any stabilising action, means the securities in respect of which the stabilising action has been, is being, or will be taken, as the case may be;

“stabilising action” means the action a stabilising manager of an issue of securities takes in going into the securities market to buy or agree to buy the relevant securities in order to stabilise or maintain the market price of the relevant securities;

“stabilising manager” means such manager as may be designated in writing by the issuer of an initial public offer of securities and notified to the Exchange before the closing date of the initial public offer.

Exemption for stabilising action during initial public offer

3.—(1) Sections 197, 198, 218(2) and 219(2) of the Act shall not apply in relation to any stabilising action —

(a)	referred to in paragraph (2); and
(b)	which is carried out by a stabilising manager or a dealer and in accordance with the provisions of this regulation.

(2) Paragraph (1) applies to any stabilising action taken in respect of an initial public offer of securities where —

(a)	the securities are to be listed on the Exchange;
(b)	provision has been made in the prospectus for an over-allotment option in respect of the initial public offer, not exceeding 15% of the total number of securities offered for subscription or sale in the initial public offer before any over-allotment;
(c)	the prospectus states that the securities may be subject to stabilising action and specifies the maximum period during which stabilising action may be taken; and
(d)	a public announcement has been made through the Exchange not later than the day immediately following the closing date of the initial public offer of securities on the total number of securities which is the subject of the over-allotment option in accordance with the prospectus.

(3) The stabilising manager shall comply with paragraphs (4) to (15).

(4) The stabilising manager —

(a)	shall only take stabilising action after he is reasonably satisfied that the price of the relevant securities on the Exchange is not false or misleading; and
(b)	shall only continue with the stabilising action if he is reasonably satisfied that the price of the relevant securities has not become false or misleading other than by reason of that stabilising action.

(5) The stabilising manager shall, before taking stabilising action, ensure that, by the closing date of the initial public offer, it has been agreed that an over-allotment of securities may be made in accordance with the prospectus.

(6) No stabilising action shall be effected after —

(a)	the date of expiry of the period of 30 calendar days from the date of commencement of dealing in the relevant securities on the Exchange; or
(b)	the date when the over-allotment of the relevant securities as announced in accordance with paragraph (2)(d) has been fully covered either through the purchase of the relevant securities on the Exchange or the exercise of the over-allotment option by the stabilising manager, or through both,

whichever is the earlier.

(7) No stabilising action shall be effected at a price higher than any price specified in the second column of the Schedule under the circumstances corresponding to that price in the first column thereof.

(8) Subject to paragraph (9), the stabilising manager shall not effect or cause to be effected, directly or indirectly, any sell order of the relevant securities prior to the commencement of each stabilising action or during the period in which stabilising action is permitted under this regulation.

(9) Nothing in paragraph (8) shall prohibit —

(a)	the stabilising manager; or
(b)	an associate of the stabilising manager, in the associate’s capacity as a dealer,

from executing any sell order of the relevant securities for a person who is not an associate of the issuer of the initial public offer.

(10) The particulars of each stabilising action including the price, quantity and name of the dealer in Singapore in relation to every transaction entered into for this purpose shall be recorded before the end of the day on which the transaction was effected in a register to be maintained by the stabilising manager.

(11) The register referred to in paragraph (10) shall be kept by the stabilising manager in such form as the Exchange may require, and shall be available for inspection by the Exchange.

(12) Prior to the closing date of the initial public offer, the stabilising manager shall inform the Exchange of the names of the dealers in Singapore through which the stabilising action will be effected and, thereafter, the stabilising manager shall inform the Exchange immediately of any subsequent change of dealer.

(13) The stabilising manager shall make a public announcement through the Exchange on the total number of the relevant securities purchased by the stabilising manager and the price range, no later than 12 noon on the trading day of the Exchange immediately after the day on which the transactions were effected.

(14) The stabilising manager shall make a public announcement through the Exchange on the cessation of stabilising action and the amount of the over-allotment option that has been exercised no later than 8.30 a.m. on the trading day of the Exchange immediately after the day of cessation of the stabilising action.

(15) No stabilising action shall be taken after the public announcement of the cessation.

(16) In this regulation —

“closing date”, in relation to an initial public offer of securities, means the date specified in the prospectus as the last date for the submission of applications for subscription or purchase of the securities;

“over-allotment”, in relation to an initial public offer of securities, means the allotment or sale of the securities to subscribers or purchasers in excess of the securities offered in the initial public offer for subscription or sale as specified in the prospectus;

“prospectus” has the same meaning as in section 239(1) of the Act.

(17) For the purposes of this regulation, whether a person is an associate of another person shall be ascertained in accordance with section 4(6) of the Act.

Exemption in bond dealings

4.—(1) Section 198 of the Act shall not apply to dealings in bonds entered into by a corporation with —

(a)	an accredited investor; or
(b)	a person whose business involves the acquisition and disposal of or holding of securities (whether as principal or as agent).

(2) In this regulation, “bonds” includes —

(a)	notes and bonds and Treasury Bills; and
(b)	options in respect of any note, bond or Treasury Bill referred to in sub-paragraph (a).

Exemption from sections 218 and 219 of Act in certain circumstances

5.—(1) Sections 218(2) and 219(2) of the Act shall not apply in relation to —

(a)

the obtaining by a director of a share qualification in accordance with section 147 of the Companies Act (Cap. 50);

(b)

the subscription for, and acquisition pursuant to that subscription of, securities of a corporation by, or by a trustee for, an employee of the corporation, or of a corporation that is deemed to be related to the first-mentioned corporation by virtue of section 6 of the Companies Act, under a superannuation scheme, pension fund or other scheme established solely or primarily for the benefit of employees of the first-mentioned or second-mentioned corporation;

(c)

a transaction in securities entered into by a person as a market-maker in securities to which that transaction relates;

(d)

a transaction entered into by a personal representative of a deceased person, a liquidator or the Official Assignee under the Bankruptcy Act (Cap. 20) in good faith in the performance of the functions of his office as such personal representative or liquidator or the Official Assignee;

(e)

a transaction by way of, or arising out of —

(i)	a mortgage or charge of securities; or
(ii)	a mortgage, charge, pledge or lien of documents of title to securities; or

(f)

a transaction entered into by the manager of an issue of securities, in accordance with his obligations as such and under an agreement with the issuer or corporation.

(2) In this regulation, “market-maker”, in relation to a securities transaction, means a person who —

(a)	enters into the transaction for his own account;
(b)	regularly publishes bona fide competitive bids and offers quotations in respect of those securities;
(c)	is ready, willing and able to effect transactions in respect of those securities at their quoted prices with other persons; and
(d)	where the person is a dealer, is recognised as a market-maker by the Exchange and the Authority.

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