Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 14) Regulations 2005
- Act Code: SFA2001-S143-2005
- 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 143/2005
- Commencement: 23 March 2005
- Status: Current version as at 27 March 2026 (per the provided extract)
- Key provisions: 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. 14) Regulations 2005 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption from certain market conduct rules under the Securities and Futures Act (the “SFA”) for a specific type of stabilising activity. In plain terms, it permits certain market participants to take stabilising steps in relation to a particular issuance of notes shortly after the notes are issued, without triggering the prohibitions that would otherwise apply.
The legislation is narrowly drafted. It does not provide a general “stabilisation” regime for all securities or all issuers. Instead, it is tied to a defined instrument—“Notes” issued by Sino Gold Limited—and to stabilising actions taken by Barclays Bank PLC (and related corporations). The exemption is also time-limited: it applies only to stabilising action taken within 30 days from the date of issue of the notes.
Practically, the Regulations address a common feature of capital markets transactions: during the initial trading period after issuance, issuers and underwriters may seek to support or stabilise the market price to reduce volatility and facilitate orderly trading. Without an exemption, stabilising purchases or offers to buy could be characterised as conduct prohibited under the SFA’s market conduct framework. This subsidiary legislation provides a lawful pathway for such stabilisation in the defined circumstances.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and confirms that the Regulations came into operation on 23 March 2005. For practitioners, this matters when assessing whether stabilising conduct occurred within the legal window and whether the exemption was available at the time of the relevant trades or offers.
2. Definitions (Regulation 2)
Regulation 2 is central because it defines both the instrument and the conduct that the exemption covers.
“Notes” are defined as the 7-year 5.75% fixed rate convertible subordinated notes due March 2012 issued by Sino Gold Limited, with a principal amount of up to US$35 million. The notes are convertible into ordinary shares in Sino Gold Limited. This definition is highly specific: stabilising action must relate to these particular notes, not to other debt instruments, other tranches, or other issuers.
“Stabilising action” is defined as an action taken in Singapore or elsewhere by Barclays Bank PLC (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 inclusion of “offer or agree to buy” is important: it covers not only actual purchases but also certain forward-looking commitments that could otherwise be treated as potentially problematic market conduct.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
Regulation 3 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 respect to stabilising action taken by 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.
In effect, the exemption is conditional on both time and who is acting. Even if the stabilising activity is otherwise within the definition of “stabilising action,” it will only be exempt if it is taken within the 30-day post-issue period and by a permitted category of person (as defined by the SFA).
Why sections 197 and 198 matter
Although the extract does not reproduce the text of sections 197 and 198, the structure indicates that these sections are part of the SFA’s market conduct prohibitions. The Regulations carve out stabilising conduct from those prohibitions. For a lawyer, the key task is to read sections 197 and 198 in the SFA to understand the exact conduct that would otherwise be unlawful, and then confirm that the stabilising conduct fits squarely within the exemption’s defined parameters.
4. Administrative and formal elements
The Regulations include the making date and signature by the Managing Director of the Monetary Authority of Singapore (MAS). While not substantive, these elements are relevant for formal validity and for confirming the instrument’s status as MAS subsidiary legislation made under the SFA’s enabling power.
How Is This Legislation Structured?
The Regulations are extremely short and consist of a standard legislative structure:
- Regulation 1 (Citation and commencement): establishes the short title and commencement date.
- Regulation 2 (Definitions): defines “Notes” and “stabilising action,” which are the two essential factual anchors for the exemption.
- Regulation 3 (Exemption): provides the legal carve-out from specified SFA provisions (sections 197 and 198) for stabilising action in relation to the defined Notes, within a defined time period, and by specified categories of persons.
There are no additional parts, schedules, or procedural requirements in the extract provided. The practical compliance focus therefore lies in confirming (i) the identity of the notes, (ii) the identity of the actor, (iii) the nature of the conduct (buying/offer to buy to stabilise price), and (iv) the timing (within 30 days from issue).
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined Sino Gold Limited convertible subordinated notes. The conduct must be taken by Barclays Bank PLC or its related corporations (as part of the definition of “stabilising action”), and it must be taken within 30 days from the date of issue.
Additionally, Regulation 3 restricts the exemption to stabilising action taken by either a person referred to in section 274 of the SFA or a sophisticated investor as defined in section 275(2). This means that even where the stabilising activity is conceptually within the definition, the exemption may not be available if the actor does not fall within the permitted categories under the SFA. For practitioners, this is a critical gating issue: it requires cross-referencing the SFA’s definitions and categories to determine whether the relevant entity qualifies.
Why Is This Legislation Important?
This subsidiary legislation is important because it provides legal certainty for stabilisation activities in a specific transaction context. In capital markets practice, stabilising purchases or offers to buy can be sensitive because they may be perceived as influencing market price. The SFA’s market conduct rules aim to protect market integrity and prevent manipulative or misleading conduct. However, stabilisation in the context of a new issuance can be legitimate and beneficial when properly constrained.
By carving out stabilising action from sections 197 and 198, the Regulations enable market participants to undertake stabilisation within a controlled framework—limited to a particular instrument, a particular stabiliser (Barclays and related corporations), and a short post-issuance period. This reduces the risk of regulatory breach and supports orderly trading during the initial market formation phase.
From an enforcement and compliance perspective, the time limit (30 days from issue) and the narrow definition of “Notes” are likely the most litigated or scrutinised elements in practice. If stabilising activity occurs outside the 30-day window, or if it relates to different securities, the exemption would not apply and the underlying prohibitions in sections 197 and 198 could become relevant. Similarly, if the stabilising activity is undertaken by an entity that does not fall within the permitted categories under section 274 or the “sophisticated investor” definition, the exemption may fail even if the actor is otherwise connected to the stabilisation process.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 274, 275(2), and the enabling provision 337(1).
- Futures Act (referenced in the provided metadata as related legislation).
- Stabilising Act (referenced in the provided metadata as related legislation).
- Timeline (MAS legislation timeline reference, relevant for confirming the correct version as at a given date).
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. 14) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.