Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 17) Regulations 2004
- Act Code: SFA2001-S269-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) — powers under section 337(1)
- Commencement: 11 May 2004
- Legislation Number: SL 269/2004
- Status: Current version as at 27 Mar 2026 (per the legislation platform display)
- 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. 17) Regulations 2004 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory carve-out from certain market conduct rules in the Securities and Futures Act (the “SFA”). In plain language, it allows specified market participants to take “stabilising action” in relation to a particular bond issuance—without triggering the prohibitions that would otherwise apply.
Stabilising action is a common feature of securities issuance. When new notes are issued, market prices can fluctuate sharply due to initial supply and demand. Under certain conditions, issuers and their financial intermediaries may buy (or offer to buy) the securities to help stabilise or maintain the market price. However, market conduct regimes typically treat such conduct cautiously, because it can resemble improper market manipulation if not tightly controlled.
This set of Regulations is narrow and issuance-specific. It defines “Notes” as a particular tranche of 3-year floating rate notes issued by the Kingdom of Thailand, due May 2007, and it defines “stabilising action” as actions taken by Barclays Bank PLC (or related corporations) in Singapore or elsewhere to buy or offer to buy those notes for stabilisation purposes. The Regulations then exempt stabilising action from the application of sections 197 and 198 of the SFA, but only if the stabilising action is carried out within specified counterparties and within a limited time window.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal citation and states that the Regulations come into operation on 11 May 2004. For practitioners, this matters when assessing whether a stabilising activity occurred within the legal framework and whether any enforcement analysis would consider the exemption available at the relevant time.
Section 2 (Definitions) is crucial because the exemption is only available if the conduct fits precisely within the defined terms. The Regulations define:
- “Notes” as the 3-year floating rate notes due May 2007 issued by the Kingdom of Thailand, with a principal amount of up to US$1,000 million.
- “stabilising action” as an action taken in Singapore or elsewhere by Barclays Bank PLC or any of its related corporations, to buy or offer or agree to buy any of the Notes to stabilise or maintain the market price of the Notes in Singapore or elsewhere.
Two practical points flow from these definitions. First, the exemption is not generic: it is tied to a specific issuer and instrument. Second, the exemption is tied to a specific stabilising actor (Barclays Bank PLC and its related corporations). If stabilising purchases are made by a different entity, or if the notes are not the specified Thailand notes, the exemption may not apply.
Section 3 (Exemption) is the operative provision. It provides that, subject to paragraph (2), sections 197 and 198 of the SFA shall not apply to stabilising action carried out in respect of any of the Notes 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.
In effect, the Regulations permit stabilising action only when the counterparty falls within the permitted categories. While the excerpt does not reproduce the content of sections 274 and 275(2), the legal significance is clear: the exemption is designed to limit stabilising conduct to dealings with persons who are either (i) within a specified class under section 274, or (ii) sophisticated investors. This is consistent with a policy approach that seeks to ensure that stabilising activity does not expose retail or unsophisticated investors to potentially misleading price-support practices.
Section 3(2) (Time limitation) imposes a further and very important constraint: the exemption does not apply to stabilising action carried out at any time after the expiry of the 30 calendar days from the date of issuance of the Notes. This is a classic market conduct control—stabilisation is allowed only for a limited period after issuance, when price discovery is most sensitive and when the risk of improper market effects is greatest.
For practitioners, the time limitation raises operational questions: what is the “date of issuance” for the Notes in the relevant documentation, and how should the 30 calendar days be counted (including whether any later amendments or re-openings affect the calculation). A careful review of the offering documentation and the issuance timetable is therefore essential when advising on compliance.
How Is This Legislation Structured?
The Regulations are short and consist of three sections:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions of “Notes” and “stabilising action”.
- Section 3 contains the exemption from the application of sections 197 and 198 of the SFA, subject to (i) permitted counterparties and (ii) a strict 30-day limit.
Notably, the Regulations do not include detailed procedural requirements, reporting obligations, or conditions beyond the counterparty and time constraints. Instead, the compliance framework is achieved by tightly defining the scope of the exemption and by limiting when and with whom stabilising action may occur.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising the specified Thailand notes—particularly Barclays Bank PLC and its related corporations, because the definition of “stabilising action” is limited to actions by those entities. The exemption is also relevant to the counterparties with whom stabilising transactions are conducted, because the exemption is conditional on dealing with persons within the categories referenced in section 274 or with sophisticated investors under section 275(2).
Because the “Notes” are defined with specificity (issuer, tenor, interest structure, due date, and maximum principal amount), the exemption is effectively instrument-specific. It does not create a general stabilisation regime for all securities; it is a targeted permission for a particular issuance. Lawyers advising on other bond issues would need to identify whether there are other stabilisation exemptions or whether the general SFA market conduct rules can be complied with without relying on this Regulations.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct framework balances two competing policy goals: (1) allowing legitimate market practices that support orderly trading and price formation during issuance, and (2) preventing conduct that could amount to market manipulation or misleading price support.
By exempting stabilising action from sections 197 and 198 of the SFA, the Regulations provides legal certainty to stabilising participants—so long as they remain within the defined boundaries. The exemption reduces the risk that stabilising purchases or offers to buy could be treated as prohibited market conduct, provided that the transactions are conducted with permitted counterparties and within the permitted timeframe.
From an enforcement and compliance perspective, the two conditions in section 3(1) and (2) are likely to be the focal points in any regulatory review. If stabilising action occurs after the 30-day period, the exemption will not apply. Similarly, if stabilising action is conducted with counterparties outside the categories in section 274 or outside the definition of sophisticated investor, the exemption will not apply. In either case, the stabilising conduct could fall back into the general prohibitions in the SFA, exposing the relevant parties to regulatory action and potential liability.
For practitioners, the Regulations therefore function as a compliance “gate”: it is not enough that the conduct is described as stabilising. The conduct must match the defined actor, the defined instrument, the defined counterparty categories, and the defined time window.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1)
- Futures Act (as referenced in the platform metadata)
- Stabilising Act (as referenced in the platform metadata)
- 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. 17) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.