Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 15) Regulations 2005
- Act Code: SFA2001-S297-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) (“SFA”)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 11 May 2005
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory Authority: Monetary Authority of Singapore (MAS)
- Regulation Number: SL 297/2005
- Status: Current version as at 27 Mar 2026 (per provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 15) Regulations 2005 is a targeted regulatory instrument made under the Securities and Futures Act. In substance, it creates a narrow exemption from certain market conduct restrictions for “stabilising action” taken in relation to a specific issuance of notes.
In plain language, when new debt securities are issued and begin trading, there may be concerns about volatility and disorderly price movements. “Stabilising action” is a regulated practice whereby a market participant may buy (or offer to buy) securities to help maintain or stabilise the market price for a limited period. However, stabilisation can also resemble conduct that the market conduct regime seeks to prevent—such as manipulation or misleading trading activity. This is why the SFA generally restricts such behaviour, subject to carefully defined exceptions.
This particular set of Regulations is not a general stabilisation framework. Instead, it is an exemption tailored to a particular note issuance: “8-year fixed rate guaranteed senior notes due May 2013” issued by Mandra Forestry Finance Limited, guaranteed by Mandra Forestry Holdings Limited and Mandra Forestry Anhui Limited. The exemption applies only to stabilising action taken within a defined timeframe (30 days from the date of issue) and only in favour of specified categories of persons (or investors) under the SFA.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal citation and states that the Regulations came into operation on 11 May 2005. This matters for practitioners because exemptions and compliance obligations typically turn on the effective date—particularly where market conduct rules are time-sensitive around an issuance and its early trading period.
Section 2 (Definitions) is central because it fixes the scope of what counts as “Notes” and what counts as “stabilising action.” The Regulations define:
- “Notes” as the specific “8-year fixed rate guaranteed senior notes due May 2013” issued by Mandra Forestry Finance Limited for up to US$235 million, guaranteed by two specified guarantors.
- “stabilising action” as an action taken in Singapore or elsewhere by Morgan Stanley & Co. International Limited (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 drafting perspective, these definitions are deliberately restrictive. They identify (i) the exact instrument, (ii) the exact stabilising actor (Morgan Stanley & Co. International Limited and related corporations), and (iii) the permitted conduct (buying or offering/agreeing to buy) for the stabilisation purpose. This reduces ambiguity and helps MAS and market participants determine whether the exemption is available.
Section 3 (Exemption) 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, provided the stabilising action is taken with either:
- (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.
Although the extract does not reproduce Sections 197 and 198, the structure indicates that those provisions impose market conduct constraints that would otherwise capture stabilisation activity. The exemption therefore functions as a carve-out: stabilising action that meets the defined conditions is treated as outside the prohibitions (or restrictions) contained in those sections.
Practitioner takeaway: the exemption is conditional on both (i) time (within 30 days from issue) and (ii) counterparty/investor category (a person under section 274 or a sophisticated investor under section 275(2)). Even if stabilisation is performed by the defined stabilising entity and in relation to the defined notes, the exemption may fail if the stabilising trades are not conducted with the required categories of persons.
Finally, the Regulations are “Made” on 10 May 2005 by the Acting Managing Director of MAS, which confirms the formal exercise of MAS’s legislative power under section 337(1) of the SFA.
How Is This Legislation Structured?
This subsidiary legislation is extremely short and structured around three provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of the exemption (what the “Notes” are and what “stabilising action” means).
- Section 3 contains the exemption from specified SFA provisions, including the 30-day limit and the permitted counterparties (section 274 persons or sophisticated investors).
There are no schedules or detailed procedural requirements in the extract. In practice, however, stabilisation programmes are often subject to broader market conduct and disclosure expectations under the SFA and related regulatory guidance. The Regulations should therefore be read as a targeted exemption overlaying the general market conduct regime.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in respect of the defined Notes. The stabilising action must be taken by Morgan Stanley & Co. International Limited or its related corporations, and it must relate to the specified issuance of notes. Accordingly, the primary regulated parties are the stabilising entity and those involved in executing stabilisation trades for that issuance.
However, the exemption also depends on the type of counterparty involved in the stabilising action. Section 3 limits the exemption to stabilising action taken with either (a) a person referred to in section 274 of the SFA or (b) a sophisticated investor under section 275(2). This means that even if the stabiliser is the correct entity and the notes are the correct instrument, trades must be structured so that the relevant counterparties fall within the permitted categories.
Why Is This Legislation Important?
For practitioners, the importance of these Regulations lies in how they operationalise a common market practice—price stabilisation—within Singapore’s market conduct framework. Stabilisation can be commercially valuable in the early trading period of a new debt issuance, but it carries legal risk if it is treated as prohibited market manipulation or otherwise falls within restrictive market conduct provisions.
This exemption provides legal certainty for a specific transaction by carving out stabilising action from Sections 197 and 198 of the SFA, but only within tightly defined boundaries. The Regulations therefore function as a compliance “permission slip” for a limited stabilisation window (30 days from issue) and for specified counterparties (section 274 persons or sophisticated investors). In deal documentation and execution planning, such exemptions are critical to ensure that the stabilisation strategy is not inadvertently non-compliant.
From an enforcement perspective, the conditional nature of the exemption means that MAS can scrutinise whether the stabiliser complied with the defined scope. If stabilising trades occur outside the 30-day period, involve the wrong notes, are executed by an entity outside the defined stabiliser group, or are conducted with counterparties not covered by section 274 or the sophisticated investor definition, the exemption would not apply. In that scenario, the stabilising conduct could revert to being assessed under the general market conduct prohibitions in the SFA.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Sections 197 and 198 (market conduct provisions from which exemption is granted)
- Section 274 (persons referred to for exemption purposes)
- Section 275(2) (definition of “sophisticated investor”)
- Section 337(1) (MAS’s power to make these Regulations)
- Futures Act (referenced in provided metadata)
- Stabilising Act (referenced in provided metadata)
- Timeline (legislation timeline reference in the provided extract)
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. 15) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.