Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 10) Regulations 2005
- Act Code: SFA2001-S113-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 7 March 2005
- Regulation No.: SL 113/2005
- Key Provisions: Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
- Regulatory Authority: Monetary Authority of Singapore (MAS)
- Status (as provided): Current version as at 27 Mar 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 10) Regulations 2005 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption from certain market conduct restrictions under the Securities and Futures Act (the “SFA”). In plain language, it allows specified parties to take “stabilising action” in connection with a particular issuance of notes, without the usual statutory prohibitions applying.
Market conduct rules in the SFA are designed to prevent manipulation and unfair practices in securities markets. However, in some capital markets transactions—particularly during the initial distribution of debt securities—market stabilisation mechanisms may be used to support orderly trading and mitigate volatility. This legislation recognises that stabilisation, when properly constrained, can serve a legitimate market function.
Importantly, the exemption is narrow and transaction-specific. It applies only to stabilising action taken in respect of defined “Notes” (a particular 30-year hybrid Tier 1 instrument issued by Shinhan Bank) and only within a defined time window after issue. It also limits the scope of stabilising action to actions taken by BNP PARIBAS (and its related corporations) and to dealings by specified categories of persons (including certain persons under the SFA and sophisticated investors).
What Are the Key Provisions?
Regulation 1: Citation and commencement provides the legal identity and effective date of the Regulations. It states that the Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 10) Regulations 2005” and that they come into operation on 7 March 2005. For practitioners, this matters because the exemption only becomes available once the Regulations are in force, and any stabilising activity must be assessed against the timing requirements in Regulation 3.
Regulation 2: Definitions is central to the scope of the exemption. It defines two key terms:
- “Notes” means the 30-year hybrid Tier 1 securities due March 2035 issued by Shinhan Bank for a principal amount of up to US$300 million.
- “stabilising action” means an action taken in Singapore or elsewhere by BNP PARIBAS or any of its related corporations to buy, or to offer or agree to buy, any of the Notes in order to stabilise or maintain the market price of the Notes in Singapore or elsewhere.
These definitions are not merely descriptive; they operate as gatekeeping criteria. If the instrument is not the specified Shinhan Bank notes, or if the stabilising activity is not undertaken by BNP PARIBAS (or its related corporations), the exemption will not apply. Likewise, the action must be directed at stabilising or maintaining market price.
Regulation 3: Exemption is the operative provision. It states that Sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of any of the Notes within 30 days from the date of issue of the Notes, with respect to dealings by either:
- (a) a person referred to in section 274 of the SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
From a practitioner’s perspective, Regulation 3 does three things at once:
- It identifies the prohibited rules being disapplied: Sections 197 and 198 of the SFA.
- It imposes a strict temporal limit: stabilising action must occur within 30 days from the date of issue.
- It limits the category of counterparties or participants: the exemption applies only where the stabilising action involves a person in section 274 or a sophisticated investor under section 275(2).
Although the extract does not reproduce Sections 197 and 198, the structure indicates that those sections contain market conduct prohibitions that would otherwise capture stabilising purchases or related dealings. The Regulations carve out a lawful pathway for stabilisation, but only within the defined boundaries.
Practical compliance note: stabilising activity must be carefully documented to show (i) the instrument is the defined “Notes”, (ii) the stabilising action is undertaken by BNP PARIBAS or its related corporations, (iii) the action is taken within the 30-day post-issue window, and (iv) the relevant persons involved fall within section 274 or are sophisticated investors. Any deviation could expose the conduct to the underlying SFA prohibitions.
How Is This Legislation Structured?
The Regulations are short and structured as a standard subsidiary instrument with three regulations:
- Regulation 1 (Citation and commencement): establishes the name and effective date.
- Regulation 2 (Definitions): defines “Notes” and “stabilising action” to precisely delimit the subject matter and authorised stabilisation conduct.
- Regulation 3 (Exemption): provides the legal exemption from specified SFA provisions, subject to time and participant conditions.
There are no additional parts or schedules in the extract. The brevity is consistent with a transaction-specific exemption: rather than creating a general stabilisation regime, it grants relief for a particular issuance and specified stabilisation conduct.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to the defined Shinhan Bank notes. In practice, the primary beneficiaries are the entities that may conduct stabilisation—namely BNP PARIBAS and its related corporations—because the definition of “stabilising action” is limited to actions taken by them.
However, Regulation 3 also conditions the exemption on the involvement of particular categories of persons under the SFA: either a person referred to in section 274 or a sophisticated investor under section 275(2). This means that even where BNP PARIBAS (or a related corporation) undertakes stabilising purchases, the exemption’s protection depends on the relevant counterparty/participant status. Lawyers advising issuers, arrangers, dealers, or trading desks should therefore assess counterparties and investor classifications against the SFA definitions.
Why Is This Legislation Important?
This Regulations instrument is important because it demonstrates how Singapore law balances two competing objectives: (1) maintaining market integrity through market conduct prohibitions, and (2) allowing controlled stabilisation in connection with securities issuance. Without such an exemption, stabilising purchases could be characterised as conduct prohibited under the SFA, creating legal uncertainty for market participants involved in underwriting and distribution.
For practitioners, the key value lies in the precision of the exemption. It is not a blanket stabilisation permission. Instead, it is tightly constrained by:
- Instrument specificity: only the defined Shinhan Bank notes (30-year hybrid Tier 1 due March 2035, up to US$300 million).
- Actor specificity: only BNP PARIBAS and related corporations may take the stabilising action.
- Geographic flexibility: stabilising action may be taken in Singapore or elsewhere, but must aim to stabilise or maintain market price in Singapore or elsewhere.
- Time limitation: only within 30 days from the date of issue.
- Counterparty/participant limitation: dealings must involve persons in section 274 or sophisticated investors under section 275(2).
From an enforcement and risk perspective, these constraints mean that compliance is largely a matter of fact pattern alignment. If the stabilisation programme is structured to fit within the exemption, the conduct is insulated from the disapplied SFA provisions. If not, the underlying prohibitions in Sections 197 and 198 may apply, potentially leading to regulatory action, civil consequences, or reputational harm.
Finally, the Regulations are a useful reference point for how Singapore implements stabilisation exemptions through subsidiary legislation. Even where general stabilisation concepts exist in market practice, the legal permission may be granted transaction-by-transaction (or at least through narrowly tailored instruments), requiring careful legal review for each issuance.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular Sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the provided metadata context).
- Stabilising Act (as referenced in the provided metadata context).
- Timeline / Legislation timeline (for version control and confirming the correct instrument version).
Source Documents
This article provides an overview of the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 10) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.