Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 11) Regulations 2006
- Act Code: SFA2001-S118-2006
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (specifically section 337(1))
- Citation: SL 118/2006
- Commencement: 27 February 2006
- Status: Current version as at 27 March 2026 (per the legislation timeline)
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Relevant SFA Provisions Exempted: Sections 197 and 198 of the Securities and Futures Act
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 11) Regulations 2006 is a targeted regulatory instrument. In plain terms, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (SFA) for “stabilising action” taken in relation to a specific type of debt security: particular notes issued by the Kingdom of Thailand.
Stabilisation is a common market practice in securities issuance. When new notes are issued, their price can fluctuate sharply as trading begins. Under stabilisation arrangements, a financial institution may buy (or offer to buy) the relevant notes for a limited period to help maintain orderly trading and reduce extreme price volatility. However, stabilisation can resemble prohibited conduct if not properly controlled—hence the need for a statutory exemption.
This set of Regulations does not create a general permission to stabilise. Instead, it carves out an exemption for stabilising action taken by a defined set of actors, within a defined time window, and subject to defined monetary thresholds for certain categories of purchasers. The exemption is therefore best understood as a compliance “safe harbour” for a particular issuance scenario.
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 27 February 2006. For practitioners, this matters because exemptions from statutory prohibitions typically apply only from the commencement date (unless otherwise stated). Here, the exemption is effective from the date the Regulations specify.
2. Definitions (Regulation 2)
Regulation 2 is crucial because it tightly defines the scope of the exemption. Three key terms are defined:
- “Notes” means the 3-year floating rate notes due February 2009 issued by the Kingdom of Thailand, for a principal amount of up to US$200 million.
- “securities” has the same meaning as in section 239(1) of the SFA. This cross-reference ensures that the exemption operates within the SFA’s definitional framework.
- “stabilising action” means an action taken in Singapore or elsewhere by Standard Chartered Bank (or any of its related corporations) to buy, or 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 legal risk perspective, the definition is narrow in two ways: (i) it is limited to a specific instrument (the Thailand notes) and (ii) it is limited to stabilising conduct by a specific stabilising entity (Standard Chartered Bank and its related corporations). This reduces ambiguity and helps market participants understand exactly what conduct is covered.
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 SFA shall not apply to stabilising action taken in respect of the Notes, within 30 days from the date of issue, with specified categories of counterparties.
Although the extract does not reproduce the text of sections 197 and 198, the structure indicates that those sections contain market conduct prohibitions or restrictions that would otherwise apply to dealings in securities. Regulation 3 provides that stabilising action is exempt from those prohibitions if the stabilisation is conducted within the permitted timeframe and involves permitted types of purchasers.
Regulation 3 then specifies three categories of persons, any of whom may be involved in the 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 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.
Practical implications of the exemption conditions
The exemption is conditional on both time and counterparty type (and, for principal acquisitions, a minimum consideration threshold). The 30-day limit from the date of issue is particularly important: stabilisation outside that window would fall outside the exemption and could expose the stabilising entity to the underlying prohibitions in sections 197 and 198.
Similarly, the exemption does not cover stabilising action involving any counterparty indiscriminately. It is limited to institutional investors, “relevant persons” (as defined in the SFA), and principal acquirers meeting the minimum consideration threshold. For transactions involving principal acquirers, the $200,000 threshold is a compliance checkpoint: practitioners should ensure deal documentation, trade confirmations, and settlement records can evidence the consideration amount (including where consideration is non-cash, such as by exchange of securities or other assets).
4. Making and sign-off (Enacting formula / “Made this”)
The Regulations were made on 22 February 2006 by the Monetary Authority of Singapore (MAS), signed by Heng Swee Keat, Managing Director. While this is not a substantive compliance rule, it is relevant for formal validity and for confirming the regulator responsible for the exemption.
How Is This Legislation Structured?
This subsidiary legislation is short and structured around three provisions:
- Regulation 1 (Citation and commencement): establishes the title and the effective date.
- Regulation 2 (Definitions): defines “Notes,” “securities,” and “stabilising action,” thereby setting the boundaries of what conduct and what instruments are covered.
- Regulation 3 (Exemption): provides the exemption from the SFA’s market conduct provisions (sections 197 and 198) for stabilising action in respect of the defined Notes, within a specified period, and involving specified categories of counterparties.
Because the Regulations are narrowly drafted, there are no additional parts or complex procedural requirements in the text provided. The compliance analysis therefore largely turns on the definitions and the conditions in Regulation 3.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to the defined Notes. In practice, it will be relevant primarily to the stabilising institution—here, Standard Chartered Bank and its related corporations—because the definition of “stabilising action” is limited to actions taken by that entity (or its related corporations).
However, the exemption also depends on the identity and status of the counterparty in the stabilising transactions. Regulation 3 contemplates stabilising action involving: (i) institutional investors; (ii) “relevant persons” under the SFA; and (iii) principal acquirers meeting the minimum consideration threshold. Accordingly, while the stabiliser is the likely party performing the trades, issuers, arrangers, and compliance teams should also understand the counterparty categories to ensure that stabilisation arrangements are structured within the exemption.
Why Is This Legislation Important?
This Regulations matters because it enables a controlled form of market support during the early trading period of a specific bond issuance. Without an exemption, stabilisation activities could be treated as prohibited market conduct under the SFA. The Regulations therefore supports market functioning while preserving the integrity of the market conduct regime.
For practitioners, the key value is the precision of the safe harbour. The exemption is not generic; it is tied to (1) a specific instrument (Thailand’s 3-year floating rate notes due February 2009, up to US$200 million), (2) a specific stabiliser (Standard Chartered Bank and related corporations), and (3) a limited stabilisation period (within 30 days from the issue date). These features reduce uncertainty but also create clear boundaries that must be monitored.
From an enforcement and compliance standpoint, the most common risk in stabilisation regimes is inadvertent breach of the exemption conditions—particularly the timeframe and the counterparty thresholds. Legal teams should therefore ensure that stabilisation policies, trade monitoring systems, and documentation practices are aligned with the Regulation 3 conditions. Where principal acquirers are involved, the $200,000 minimum consideration threshold (including non-cash consideration) should be verified and evidenced.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289): particularly sections 197 and 198 (market conduct provisions exempted) and section 337(1) (making power); section 239(1) (definition of “securities”); and section 275(2) (definition of “relevant person”).
- Futures Act (listed in the provided metadata as related legislation).
- Stabilising Act (listed in the provided metadata as related legislation).
- Timeline / Legislation timeline (for version control and amendment history, as referenced in the legislation interface).
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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.