Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 10) Regulations 2006
- Act Code: SFA2001-S106-2006
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 23 February 2006
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulatory Body: Monetary Authority of Singapore (MAS)
- Instrument Number: SL 106/2006
- Status: Current version as at 27 March 2026 (per legislation portal)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 10) Regulations 2006 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. In essence, it creates a limited exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for stabilising activities conducted in relation to a specific issuance of notes.
Stabilising action is a practice commonly used in securities markets during or shortly after an issuance. The issuer or its financial intermediaries may take steps to support or maintain the market price of newly issued securities, typically to reduce volatility and support orderly trading. However, stabilising conduct can overlap with prohibitions designed to prevent market manipulation or misleading trading practices. This is where the Regulations become important: they carve out a narrow exemption so that stabilising action can occur without triggering the general statutory prohibitions.
Notably, the exemption is not general. It is tied to a defined set of “Notes” issued in February 2006 by Metropolitan Bank and Trust Company, and it is limited to stabilising action taken within a specified time window (30 days from the date of issue). The Regulations also restrict the categories of persons who may benefit from the exemption and impose a minimum consideration threshold for certain principal acquisitions.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and states that the Regulations come into operation on 23 February 2006. This matters for compliance timing: stabilising action and any related dealings must be assessed against the rules applicable during the relevant period.
2. Definitions (Regulation 2)
Regulation 2 is critical because it defines the scope of the exemption. Three terms are particularly important:
- “Notes”: Defined as “the non-cumulative, step-up perpetual subordinated notes issued in February 2006 by Metropolitan Bank and Trust Company for a principal amount of up to US$125 million.” This definition is highly specific—both the issuer and the instrument characteristics are fixed, and the principal amount is capped.
- “securities”: Uses the meaning in section 239(1) of the SFA. This is a cross-reference that ensures the exemption operates within the SFA’s broader market conduct framework.
- “stabilising action”: Defined as an action taken in Singapore or elsewhere by UBS AG (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.
From a practitioner’s perspective, the definition of “stabilising action” is the gatekeeper. It limits stabilising activity to actions by UBS AG or its related corporations, and it focuses on purchase-related conduct (buying, offering to buy, or agreeing to buy). It does not, on its face, extend to other forms of market support (for example, selling, hedging strategies, or discretionary trading not connected to stabilisation) unless they fall within the defined “buy/offer/agree to buy” framework.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
The operative provision is Regulation 3. It states that sections 197 and 198 of the Act shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with respect to specified categories of persons.
While the text provided does not reproduce sections 197 and 198 themselves, the structure indicates that those sections contain prohibitions relevant to market conduct (commonly, rules against market manipulation, false or misleading conduct, or improper dealing). The exemption therefore functions as a statutory “safe harbour” for stabilising action, but only for the defined Notes, only within the defined period, and only for certain participants.
Regulation 3 then enumerates the persons who may be involved in the exempt stabilising action:
- (a) an institutional investor;
- (b) a relevant person as defined in section 275(2) of the SFA; or
- (c) a person who acquires the Notes as principal, provided the consideration for the acquisition is not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
Practical implications of the person-based conditions:
- Institutional investors: The exemption is available when the stabilising action is taken in respect of the Notes with an institutional investor. This suggests that the SFA’s market conduct prohibitions are relaxed for professional participants who are presumed to have the sophistication and capacity to trade responsibly.
- “Relevant person”: The cross-reference to section 275(2) means the exemption depends on the SFA’s classification of persons connected to market conduct rules (often including persons with certain relationships to issuers, intermediaries, or regulated activities). A practitioner should verify the precise definition in section 275(2) to determine whether a particular entity qualifies.
- Principal acquisition threshold: For persons acquiring as principal, the exemption is conditional on a minimum consideration per transaction of $200,000 (or equivalent). This threshold is designed to exclude small-lot retail-type acquisitions from the exemption’s benefit, thereby limiting the exemption to transactions of a certain scale.
Time limitation: The exemption applies only to stabilising action “within 30 days from the date of issue of the Notes.” This is a strict temporal boundary. Compliance teams should ensure that any stabilising purchases (or offers/agreements to buy) are documented and tracked to confirm they fall within the 30-day window.
How Is This Legislation Structured?
The Regulations are structured in a conventional, minimal format typical of targeted exemptions:
- Regulation 1 (Citation and commencement) sets the short title and the operative date.
- Regulation 2 (Definitions) defines the key terms—especially “Notes” and “stabilising action”—to precisely delimit the exemption’s subject matter and the conduct covered.
- Regulation 3 (Exemption) provides the legal effect: sections 197 and 198 of the SFA do not apply to stabilising action in respect of the Notes, within 30 days from issue, and only when the stabilising action is taken with or in respect of the specified categories of persons.
There are no additional parts or complex procedural requirements in the extract provided. The Regulations function as a narrow carve-out rather than a comprehensive regulatory regime.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to the defined “Notes” issued by Metropolitan Bank and Trust Company in February 2006. It is therefore relevant primarily to the parties involved in the issuance and market support of those Notes—most notably UBS AG and its related corporations, because they are the only entities expressly defined as capable of taking “stabilising action” under the Regulations.
However, Regulation 3 also conditions the exemption on the type of counterparty or participant involved: the stabilising action must be taken with an institutional investor, a relevant person (as defined in the SFA), or a principal acquirer meeting the $200,000 per transaction minimum consideration threshold. Accordingly, the exemption’s practical reach depends on both (i) who is conducting the stabilising action (UBS AG/related corporations) and (ii) who is on the other side of the relevant dealings or who is acquiring as principal.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct framework balances two competing policy goals: (1) preventing market manipulation and improper dealing, and (2) allowing legitimate market practices that support orderly trading during issuance periods.
From a compliance and legal risk perspective, the exemption provides a controlled safe harbour. Without it, stabilising purchases—particularly those that may influence price—could be argued to fall within prohibited conduct under the SFA. By expressly disapplying sections 197 and 198 for stabilising action that meets the defined criteria, MAS reduces uncertainty and enables structured market support activities to proceed lawfully.
For practitioners, the key value lies in the precision of the exemption. The Regulations are narrow in scope (specific notes, specific stabiliser, specific time window) and include participant-based conditions (institutional investor, relevant person, or principal acquirer with a minimum consideration). These features mean that legal review must focus on factual fit: confirming the instrument identity, verifying the stabiliser’s role, ensuring the 30-day timing requirement is met, and checking the status/threshold of counterparties and principal acquirers.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 239(1), 275(2), and the authorising provision in section 337(1).
- Futures Act (as referenced in the platform metadata; relevant for broader market conduct context depending on the instrument and activity).
- Stabilising Act (as referenced in the platform metadata; relevant for comparative understanding of stabilisation regimes, if applicable).
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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.