Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 11) Regulations 2004
- Act Code: SFA2001-S210-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Citation: SL 210/2004
- Commencement: 20 April 2004
- Status: Current version as at 27 March 2026 (per the legislation timeline)
- Key provisions: Section 1 (citation and commencement); Section 2 (definitions); Section 3 (exemption)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 11) Regulations 2004 is a targeted regulatory instrument that creates a limited exemption from certain market conduct restrictions under the Securities and Futures Act (the “SFA”). In practical terms, it addresses a common feature of debt capital markets: stabilisation activity around the initial issuance of notes.
When notes are issued, market makers or lead managers may undertake “stabilising action” to support or maintain the market price during the early trading period. Such activity can, in some circumstances, overlap with statutory prohibitions on market manipulation or improper dealing. This Regulations therefore carves out a specific exemption, allowing stabilisation in relation to a defined set of notes, provided strict conditions are met.
Importantly, the exemption is narrow and time-limited. It applies only to stabilising action carried out in respect of “Notes” defined by reference to a particular issuer and issuance window (fixed rate notes issued by Korea Electric Power Corporation in April 2004, up to US$300 million). It also restricts who may conduct the stabilising action and limits the exemption to stabilisation undertaken within a 30-calendar-day period from the date of issuance.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms the legal identity of the Regulations and sets the commencement date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 11) Regulations 2004” and came into operation on 20 April 2004. For practitioners, this matters when assessing whether stabilisation activity occurred before or after the regulatory instrument took effect.
Section 2 (Definitions) is central because it defines both the scope of the instruments (“Notes”) and the conduct (“stabilising action”). The Regulations define “Notes” as fixed rate notes issued by Korea Electric Power Corporation in April 2004 for a principal amount of up to US$300 million. This definition is highly specific: it is not a general stabilisation regime for all notes, but rather a bespoke exemption tied to a particular issuance.
Section 2 also defines “stabilising action” as an action taken in Singapore or elsewhere by ABN AMRO Bank N.V., Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated, or any of their 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. This definition is legally significant in two ways. First, it identifies the authorised stabilising participants (the named banks and their related corporations). Second, it clarifies the permitted mechanics: buying, offering to buy, or agreeing to buy—i.e., stabilisation can involve commitments, not only completed purchases.
Section 3 (Exemption) provides the operative relief. Section 3(1) states that, subject to paragraph (2), sections 197 and 198 of the Act shall not apply to any stabilising action carried out in respect of any of the Notes with either of the following counterparties:
- (a) a person referred to in section 274 of the Act; or
- (b) a sophisticated investor as defined in section 275(2) of the Act.
While the extract does not reproduce sections 197, 198, 274, or 275, the structure indicates that the exemption is conditional on the identity of the counterparty. In other words, stabilising action is not broadly exempted against all market conduct rules; it is exempted only when the stabilising dealings are conducted with specified categories of persons under the SFA framework.
Section 3(2) (Time limitation) imposes a hard stop. The exemption in Section 3(1) does not apply to any stabilising action carried out at any time after the expiry of the period of 30 calendar days from the date of issuance of the Notes. This is a strict temporal condition. For compliance teams, it means that stabilisation strategies must be planned and monitored so that any stabilising purchases, offers, or agreements to buy do not extend beyond the permitted window.
Practically, the combined effect of Sections 2 and 3 is that stabilisation is permitted only when all of the following are satisfied: (i) the notes are the defined Korea Electric Power Corporation fixed rate notes issued in April 2004 (up to US$300 million); (ii) the stabilising action is undertaken by one of the defined banks or their related corporations; (iii) the stabilising dealings are with persons falling within section 274 or with sophisticated investors under section 275(2); and (iv) the stabilising action occurs within 30 calendar days from issuance.
How Is This Legislation Structured?
This Regulations is short and consists of three substantive provisions. The structure is typical of bespoke exemptions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that precisely identify the relevant notes and the stabilising conduct, including the authorised stabilising entities.
- Section 3 creates the exemption from specified SFA provisions, subject to counterparty categories and a 30-day time limit.
There are no additional parts or complex schedules in the extract. The legislative design is therefore “precision by definition”: it relies on narrow definitions and clear conditions rather than broad regulatory discretion.
Who Does This Legislation Apply To?
The Regulations applies to parties engaging in stabilising action in relation to the defined “Notes.” Although the exemption is framed as relief from the application of sections 197 and 198 of the SFA, the practical beneficiaries are the entities conducting stabilisation—namely ABN AMRO Bank N.V., Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated, and their related corporations—because only those entities (and their related corporations) fall within the definition of “stabilising action.”
However, the exemption also depends on the counterparty to the stabilising dealings. Section 3(1) limits the exemption to stabilising action carried out with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). Accordingly, even where the stabiliser is one of the defined banks, the exemption may not apply if the stabilising purchases or commitments are made with persons outside those categories.
Finally, the Regulations applies only during the permitted period: stabilising action must occur within 30 calendar days from the date of issuance. After that period, the exemption ceases, and the underlying market conduct provisions (sections 197 and 198) would resume full effect.
Why Is This Legislation Important?
For practitioners, the key importance of this Regulations lies in its role as a market conduct “safety valve” for stabilisation activity in a specific debt issuance. Without such an exemption, stabilising purchases or related commitments could risk contravening statutory prohibitions on improper dealing or market manipulation. By expressly disapplying sections 197 and 198 (subject to conditions), the Regulations provides legal certainty for structured issuance processes.
Second, the Regulations demonstrates how Singapore’s market conduct regime balances investor protection with market functioning. Stabilisation can support orderly trading and reduce volatility immediately after issuance. But the exemption is constrained by (i) the identity of the stabilising entities, (ii) the counterparty categories, and (iii) a strict 30-day limit. These constraints reduce the risk that stabilisation becomes a vehicle for broader market abuse.
Third, the Regulations is a reminder that exemptions in the SFA ecosystem are often bespoke and conditional. The definition of “Notes” is tied to a particular issuer, issuance month, and maximum principal amount. Therefore, compliance teams cannot assume that stabilisation exemptions for one issuance automatically extend to other issuances, other note terms, or other issuers. Each issuance may require its own regulatory instrument or reliance on a different exemption.
From an enforcement and compliance perspective, the time limitation is likely the most operationally sensitive condition. Stabilisation programmes typically involve monitoring and execution across multiple trading days. A 30-calendar-day cap requires careful tracking of the issuance date and the timing of any stabilising orders, purchases, offers, or agreements to buy.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the exemption-making power in section 337(1)
- Futures Act (referenced in the statute metadata as related legislation)
- Stabilising Act (referenced in the statute metadata as related legislation)
- Timeline (legislation timeline reference for version control)
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. 11) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.