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
- Legislative Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 23 March 2005
- Citation: SL 142/2005
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
- Status (as provided): Current version as at 27 March 2026
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 regulatory instrument made under the Securities and Futures Act (SFA). In essence, it creates a narrow exemption from certain market conduct rules that would otherwise restrict or regulate “stabilising action” in connection with a specific debt instrument: 5-year fixed rate notes issued by Indian Railway Finance Corporation Limited.
In plain language, the Regulations recognise that, in some bond issuance contexts, market participants may undertake stabilisation activities—such as buying (or offering to buy) the relevant notes—to help maintain orderly trading and reduce volatility immediately after issuance. Such activities can be legitimate and beneficial for market functioning, but they can also raise concerns about manipulation or unfair market practices. The SFA therefore contains baseline prohibitions or restrictions. These Regulations carve out an exemption, but only for stabilising action that meets strict conditions.
Importantly, this is not a general stabilisation regime for all securities. It is an exemption tailored to a defined set of notes and a defined stabiliser. The Regulations specify the notes, define stabilising action in relation to a particular bank and its related corporations, and limit the exemption to a short time window after issuance. The exemption also applies only when the stabilising counterparties fall within specified categories (including persons under the SFA and “sophisticated investors”).
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal identity of the instrument and its effective date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 13) Regulations 2005” and came into operation on 23 March 2005. For practitioners, this matters because the exemption is time-bound and must be assessed against the issuance date and the 30-day period referenced in Section 3.
Section 2 (Definitions) is central because it constrains the scope of the exemption. Two defined terms do the work:
- “Notes” are defined very specifically as 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” is defined as an action taken in Singapore or elsewhere by ABN AMRO Bank N.V. (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.
This drafting approach is typical of market conduct exemptions: it prevents the exemption from being used as a “blanket” permission. Only the specified notes and only stabilising conduct by the specified stabiliser (ABN AMRO Bank N.V. and related corporations) can benefit.
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of any of the Notes. The exemption is subject to a combination of conditions:
- Time limit: the stabilising action must be taken within 30 days from the date of issue of the Notes.
- Counterparty categories: the stabilising action must be taken with a person referred to in section 274 of the SFA, or with a sophisticated investor as defined in section 275(2) of the SFA.
From a practitioner’s perspective, the exemption is therefore conditional not only on what is being done (stabilising action as defined) and by whom (ABN AMRO Bank N.V. and related corporations), but also on when it is done and who it is done with. If stabilising purchases occur outside the 30-day window, or if the stabilising counterparties do not fall within the specified SFA categories, the exemption will not apply and the underlying SFA provisions (Sections 197 and 198) may be engaged.
Although the extract does not reproduce Sections 197 and 198 themselves, the structure indicates that those sections impose market conduct constraints that MAS has determined should be relaxed for this particular issuance and stabilisation arrangement. The exemption’s narrowness suggests MAS’s intent to balance market integrity with practical issuance mechanics.
How Is This Legislation Structured?
The Regulations are concise and consist of a short set of provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that delimit the scope of “Notes” and “stabilising action”.
- Section 3 contains the exemption from specified SFA provisions, including the 30-day limitation and the counterparty eligibility requirements.
There are no additional parts or schedules in the extract. The drafting is therefore “single-issue”: it is designed to address one stabilisation scenario rather than to establish a broad framework.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising the defined Notes, but the exemption is only available for stabilising action taken by ABN AMRO Bank N.V. or its related corporations (as defined within the stabilising action definition). This means that other market participants cannot rely on this exemption unless their conduct falls within the definition of stabilising action ascribed to ABN AMRO and related corporations.
Additionally, the exemption is conditional on the stabilising action being conducted within 30 days from the Notes’ date of issue and being undertaken with counterparties that are either (a) persons referred to in section 274 of the SFA or (b) sophisticated investors under section 275(2). Accordingly, the Regulations have a direct impact on how stabilisation trades are structured and documented, including trade counterparties and timing.
Why Is This Legislation Important?
This Regulations matters because stabilisation activity sits at the intersection of market liquidity support and market integrity. Without an exemption, stabilisation conduct could be treated as falling within prohibitions or restrictions under the SFA’s market conduct provisions. By granting a targeted exemption, MAS provides legal certainty for a specific issuance and stabilisation programme—reducing the risk that legitimate stabilisation trades are later characterised as unlawful market manipulation.
For lawyers advising issuers, arrangers, dealers, or stabilising agents, the key practical value is the precision of the conditions. The exemption is not merely “for stabilisation”; it is for stabilisation of specific notes, by specific entities, within a specific post-issuance period, and with specific counterparty categories. This means compliance work must focus on:
- Instrument identification: confirming the stabilised securities match the defined “Notes” (issuer, maturity, coupon type, and principal amount range).
- Actor identification: ensuring the stabilising activity is carried out by ABN AMRO Bank N.V. or its related corporations.
- Timing controls: tracking the date of issue and ensuring stabilising action occurs within the 30-day window.
- Counterparty eligibility: verifying that counterparties are within section 274 persons or are sophisticated investors under section 275(2).
From an enforcement perspective, the narrow scope suggests MAS expects strict adherence. If stabilisation is attempted outside the exemption’s boundaries, the stabiliser may face regulatory risk under the underlying SFA provisions (Sections 197 and 198) that the exemption otherwise disapplies. Therefore, the Regulations should be treated as a compliance “gate”: once the gate conditions are met, the exemption operates; if not, the baseline market conduct rules apply.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly Sections 197, 198, 274, and 275(2) (as referenced in the Regulations)
- Futures Act (listed in the provided metadata as related legislation)
- Stabilising Act (listed in the provided metadata as related legislation)
- Timeline (listed in the provided metadata as related legislation)
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.