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
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 23 February 2006
- Regulation Number: SL 106/2006
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “Notes” and “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the Act for stabilising action in respect of specified Notes
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 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct rules in the Securities and Futures Act. In practical terms, it allows specified persons to take “stabilising action” in relation to a particular issuance of notes without falling foul of the prohibitions that would otherwise apply to market manipulation or improper dealing.
Stabilisation is a common feature of securities issuance. When new securities are first offered, liquidity and price discovery can be thin, and underwriters or market participants may seek to support orderly trading conditions. However, stabilisation can resemble prohibited conduct if the law treats it as market manipulation. This Regulations bridges that gap by carving out stabilising activity—if it meets defined conditions and is limited to a defined time window.
Importantly, the exemption is not general. It is tied to a specific set of “Notes” issued in February 2006 by Metropolitan Bank and Trust Company, and it is linked to stabilising action undertaken by UBS AG (and its related corporations). The exemption applies only within 30 days from the date of issue of the Notes, and only when the stabilising action is carried out by certain categories of persons or under specified acquisition thresholds.
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations came into operation on 23 February 2006. For practitioners, this matters because the exemption is time-bound and must be assessed against the issuance date and the commencement date to determine whether the stabilising activity falls within the relevant legal framework.
Section 2 (Definitions) is the core interpretive section. It defines three key terms:
- “Notes”: These are defined very specifically as 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 specificity is crucial: the exemption is not available for other note issuances, other issuers, or other note structures.
- “securities”: This has the same meaning as in section 239(1) of the Act. This cross-reference ensures that the exemption operates within the Act’s broader definitional framework.
- “stabilising action”: This means 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. The definition is both actor-specific (UBS AG and related corporations) and purpose-specific (stabilising or maintaining market price).
Section 3 (Exemption) is the operative provision. 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 the stabilising action being taken by one of the following categories:
- (a) an institutional investor;
- (b) a relevant person as defined in section 275(2) of the Act; or
- (c) a person who acquires the Notes as principal, provided that 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.
From a compliance perspective, Section 3 creates a structured eligibility test. Even if the activity qualifies as “stabilising action” under the definition in Section 2, the exemption from sections 197 and 198 is only available if the stabilising action is taken by a qualifying person and within the 30-day post-issuance window. The $200,000 threshold in paragraph (c) is particularly important for transactions involving principal acquisitions, as it limits the exemption from applying to smaller-lot or retail-scale acquisitions that could otherwise be used to disguise market support as stabilisation.
While the extract does not reproduce sections 197 and 198 themselves, the legal effect is clear: those sections impose prohibitions or restrictions on certain market conduct. This Regulations effectively removes the application of those prohibitions to the specified stabilising conduct, but only to the extent the conditions are satisfied. Practitioners should therefore treat this as a conditional safe harbour/exemption rather than a blanket permission.
How Is This Legislation Structured?
The Regulations are concise and consist of three sections:
- Section 1: Citation and commencement.
- Section 2: Definitions that determine the scope of “Notes” and “stabilising action”, and connect “securities” to the Act’s definitional scheme.
- Section 3: The exemption provision, specifying (i) which Act sections are disapplied, (ii) the time window (30 days from issue), and (iii) the categories of eligible persons (institutional investor, relevant person, or principal acquirer meeting the $200,000 threshold).
Because the instrument is short, the interpretive work largely turns on the defined terms and on cross-references to the Securities and Futures Act—particularly the definition of “relevant person” in section 275(2) of the Act and the content of sections 197 and 198.
Who Does This Legislation Apply To?
In terms of activity, the Regulations apply to stabilising action taken in Singapore or elsewhere by UBS AG (or its related corporations) in relation to the defined Notes. This means that the exemption is not available to other dealers or issuers unless they fall within the “UBS AG or related corporations” element of the definition of stabilising action.
In terms of persons, Section 3 limits the exemption to stabilising action taken by: (i) an institutional investor; (ii) a relevant person under section 275(2) of the Act; or (iii) a principal acquirer meeting the $200,000 per transaction minimum consideration threshold. Accordingly, even where stabilisation is conceptually intended, the exemption will not be available if the stabilising trades are executed by persons outside these categories or if the consideration threshold is not met for principal acquisitions.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing market manipulation and improper dealing, and (2) allowing legitimate stabilisation practices during securities issuance. Without an exemption, stabilisation activity—especially buying or offering to buy in the market to support price—could be argued to fall within prohibitions on market misconduct. The Regulations provides legal certainty for a defined stabilisation programme.
For practitioners advising underwriters, dealers, or institutional investors, the key value lies in the conditional nature of the exemption. The exemption is limited by: (i) the identity and structure of the Notes; (ii) the actor (UBS AG and related corporations); (iii) the purpose (stabilising or maintaining market price); and (iv) the time window (30 days from issue). It also limits the eligible counterparties/participants through the institutional/relevant person categories and the $200,000 principal acquisition threshold.
From an enforcement and risk management standpoint, the Regulations should be treated as a compliance benchmark. If stabilising activity falls outside the defined scope—e.g., beyond 30 days, in relation to different notes, by a non-qualifying actor, or by a person not within the eligible categories—then sections 197 and 198 of the Securities and Futures Act may apply. Practitioners should therefore ensure that stabilisation programmes are documented and monitored against each condition, including trade timing, counterparties, and transaction size for principal acquisitions.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the regulation-making power in 337(1).
- Futures Act (as referenced in the legislation metadata timeline context).
- Stabilising Act (as referenced in the legislation metadata timeline context).
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.