Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 13) Regulations 2005
- Act Code: SFA2001-S142-2005
- 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 March 2005
- Regulatory status: Current version as at 27 March 2026 (per the legislation portal)
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory maker: Monetary Authority of Singapore (MAS)
- Regulation number: SL 142/2005
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 13) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted exemption instrument made under the Securities and Futures Act (the “SFA”). In plain terms, it allows certain market participants to take “stabilising action” in relation to a specific bond issuance—without being caught by the general market conduct prohibitions that would otherwise apply.
Stabilisation is a practice used in securities markets to help manage short-term price volatility around the time of issuance. The idea is that, during a limited window after a new issue, an authorised party may buy (or offer to buy) the relevant securities to support the market price. However, because stabilisation can resemble prohibited trading or market manipulation, the SFA contains restrictions. This subsidiary legislation creates a narrow carve-out for stabilising action in respect of a particular set of notes.
Importantly, the exemption is not general. It is tied to a defined product (“Notes”) and a defined stabilising actor (“ABN AMRO Bank N.V., or any of its related corporations”), and it is limited by both time (within 30 days from the date of issue) and by the type of counterparty (either a person specified in the SFA or a “sophisticated investor” as defined in the SFA). This makes the Regulations highly relevant for practitioners advising on issuance documentation, trading permissions, compliance controls, and MAS regulatory risk.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and states that they come into operation on 23 March 2005. For practitioners, this matters because stabilising activity must be assessed against the legal framework in force at the relevant time. Where stabilisation occurs around issuance, the commencement date can be critical for determining whether the exemption is available.
Section 2 (Definitions) is the heart of the instrument because it defines the scope of the exemption. Two terms are defined:
- “Notes” means the 5-year fixed rate notes due March 2010 issued by Indian Railway Finance Corporation Limited for a principal amount of up to ¥15,000,000,000.
- “stabilising action” means an action taken in Singapore or elsewhere by ABN AMRO Bank N.V. (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 compliance perspective, these definitions do several things at once. First, they lock the exemption to a specific bond issue (product specificity). Second, they lock the exemption to a specific stabilising party and its related corporations (actor specificity). Third, they cover both actual purchases and conditional commitments (“offer or agree to buy”), which is relevant for how trading desks record orders, indications of interest, and contractual commitments. Finally, the definition is geographically broad: stabilising action may occur in Singapore or elsewhere, but the purpose is to stabilise or maintain price in Singapore or elsewhere.
Section 3 (Exemption) provides the operative relief. It states that Sections 197 and 198 of the SFA 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 stabilising action taken with certain counterparties.
While the extract does not reproduce Sections 197 and 198, the structure indicates that those provisions are the general market conduct rules that would otherwise restrict or prohibit the relevant conduct. The exemption therefore functions as a “permission” to carry out stabilising trades that would otherwise be unlawful or non-compliant.
Section 3 then specifies the counterparties for which the exemption applies. Stabilising action must be taken “with” 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.
Practically, this means the exemption is not a blanket authorisation to trade with any market participant. It is constrained to counterparties that meet the SFA’s specified categories—typically reflecting a policy choice that sophisticated or otherwise eligible counterparties can be dealt with under controlled conditions, while retail-facing conduct remains more tightly regulated.
Finally, the time limitation—within 30 days from the date of issue—is a critical compliance checkpoint. Stabilising trades outside the window would not benefit from this exemption, even if they otherwise resemble stabilisation. For issuance counsel and trading compliance teams, this requires careful tracking of the issue date, the start and end of the stabilisation period, and the mapping of each trade to the exemption conditions.
How Is This Legislation Structured?
The Regulations are short and structured as a standard subsidiary legislative instrument with three provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of the exemption (the specific Notes and the meaning of stabilising action).
- Section 3 contains the exemption from the relevant SFA market conduct provisions, including the 30-day time limit and the counterparty eligibility requirements.
There are no additional parts or schedules in the extract, reflecting the Regulations’ narrow purpose: to grant a specific exemption for a specific issuance and stabilising actor.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and therefore sit within Singapore’s broader market conduct regime, the exemption is functionally directed at the party (and its related corporations) that performs the stabilising action. The definition of “stabilising action” expressly names ABN AMRO Bank N.V. and its related corporations. Accordingly, the exemption is most relevant to ABN AMRO’s dealing activities and those of its related entities when they trade in the defined Notes for stabilisation purposes.
However, the exemption also depends on who the stabilising trades are made with. Section 3 requires that stabilising action be taken “with” either a person referred to in section 274 of the SFA or a sophisticated investor under section 275(2). Therefore, the Regulations indirectly affect other market participants as well: if counterparties do not fall within those categories, the stabilising trades may not be protected by the exemption and could expose the stabilising party to breach of the underlying SFA provisions.
Why Is This Legislation Important?
This instrument is important because it illustrates how Singapore law balances two competing policy objectives: (1) allowing legitimate market practices that support orderly price formation around issuance, and (2) preventing conduct that could be characterised as market manipulation or unlawful dealing. By carving out stabilising action from general market conduct prohibitions, the Regulations provide legal certainty for stabilisation activities—so long as strict conditions are met.
For practitioners, the key value of the Regulations lies in their precision. The exemption is not “market practice” in the abstract; it is a legally defined permission tied to a particular bond issue, a particular stabilising institution, a particular trading purpose (price stabilisation), a particular time window (30 days from issue), and particular counterparty categories. This means that compliance teams must treat the exemption as a checklist-driven authorisation rather than a general industry allowance.
In practice, advising on a stabilisation programme would typically involve: confirming the identity of the Notes and their issue date; confirming that the stabilising party is ABN AMRO Bank N.V. or a related corporation; ensuring that the trades are within the 30-day period; documenting that the purpose is stabilisation/price maintenance; and verifying that counterparties fall within the SFA’s eligible categories (section 274 persons or sophisticated investors). Failure on any element could mean the exemption does not apply, and the stabilising trades could be subject to enforcement under the underlying SFA provisions.
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 platform’s metadata)
- Stabilising Act (as referenced in the platform’s metadata)
- Timeline / Legislation timeline (for version control and amendment history)
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. 13) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.