Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 17) Regulations 2005
- Act Code: SFA2001-S354-2005
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (SFA), specifically section 337(1)
- Commencement: 9 June 2005
- Enacting date: Made on 8 June 2005
- Regulation No.: S 354/2005
- Status: Current version as at 27 March 2026 (per the provided extract)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (“Notes”, “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 17) Regulations 2005 is a narrowly tailored set of regulations that creates a specific exemption from certain market conduct rules under the Securities and Futures Act (SFA). In plain terms, it allows particular market participants to take “stabilising action” in relation to a defined issuance of notes without being treated as breaching the SFA provisions that would otherwise restrict or regulate such conduct.
The regulations are designed to address a common feature of securities markets: when a new issuance is launched, liquidity and pricing can be volatile. Stabilisation mechanisms—where permitted—are intended to help maintain orderly trading and reduce extreme price swings during the initial period after issuance. However, stabilisation can also resemble prohibited market manipulation if not carefully constrained. This is why the SFA generally regulates or prohibits certain conduct, while allowing exemptions in defined circumstances.
In this particular case, the exemption is tied to a specific issuer and issuance: fixed rate notes issued by Thai Oil Public Company Limited in June 2005, up to a principal amount of US$500 million. The stabilising activity is also defined and limited to actions taken by ABN AMRO Bank N.V. (or related corporations) to buy, or to offer or agree to buy, the notes in order to stabilise or maintain market price in Singapore or elsewhere.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal legal identity of the regulations and states when they take effect. The regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 17) Regulations 2005” and come into operation on 9 June 2005. For practitioners, this matters because exemptions must be in force at the time the relevant stabilising action is undertaken.
Section 2 (Definitions) is central because it determines the scope of the exemption. Two terms are defined:
- “Notes” means the fixed rate notes issued by Thai Oil Public Company Limited in June 2005 for a principal amount of up to US$500 million.
- “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.
These definitions are deliberately restrictive. The exemption does not apply to stabilisation in relation to other instruments, other issuers, or stabilising activities by other financial institutions. It also focuses on stabilisation through buying (including offers or agreements to buy), rather than other forms of market support.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Act shall not apply to any 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.
In practical terms, this means the exemption is time-bound and counterparty-bound. Even if a party is otherwise capable of stabilising the notes, the exemption only protects stabilising actions conducted within the specified 30-day window and only when the relevant dealings are with the permitted categories of persons under the SFA framework.
For lawyers advising issuers, arrangers, or stabilising agents, the key compliance questions typically include: (i) whether the instrument qualifies as “Notes” under the definition; (ii) whether the stabilising activity qualifies as “stabilising action” (including the identity of the stabiliser and the purpose of maintaining price); (iii) whether the stabilisation occurs within the 30-day period from the date of issue; and (iv) whether the counterparties fall within section 274 persons or are sophisticated investors under section 275(2). Failure on any of these points can mean the exemption does not apply, leaving the stabilising conduct potentially exposed to the prohibitions or restrictions in sections 197 and 198 of the SFA.
How Is This Legislation Structured?
This subsidiary legislation is structured in a simple, three-section format:
- Section 1 sets out the citation and commencement provisions.
- Section 2 provides definitions that delimit the scope of the exemption.
- Section 3 contains the exemption from specified SFA provisions (sections 197 and 198) for stabilising action, subject to time and counterparty conditions.
Notably, the regulations do not include extensive procedural requirements in the extract provided. Instead, they rely on the defined scope and the conditions embedded in the exemption clause. Practitioners should still verify whether the broader SFA regime or related MAS guidance imposes additional operational requirements (for example, disclosure, reporting, or conduct limitations) that may apply even where an exemption is granted.
Who Does This Legislation Apply To?
The regulations apply to stabilising action taken in respect of the defined notes. In terms of persons, the exemption is directed at actions taken by ABN AMRO Bank N.V. or its related corporations, because the definition of “stabilising action” is limited to those actors. Therefore, the exemption is not a general permission for any market participant; it is tied to the stabiliser identified in the definition.
In terms of counterparties, the exemption only applies when the stabilising action is taken with a person falling within section 274 of the SFA or with a sophisticated investor under section 275(2). This means that even within the stabiliser’s permitted activities, the stabiliser must ensure that the relevant dealings are conducted with the correct categories of counterparties. For legal advisers, this typically requires careful review of the transaction counterparties, account structures, and investor classification documentation.
Why Is This Legislation Important?
Although the regulations are short, they are significant because they operationalise a controlled exception to market conduct rules. Stabilisation is a sensitive area: it can support price formation and liquidity, but it can also be misused to create an artificial market. By exempting stabilising action only for a specific issuance, within a limited period, and with specified counterparties, the regulations reflect a balance between market functioning and investor protection.
From an enforcement and risk perspective, the exemption matters because it determines whether stabilising conduct is treated as falling within the prohibitions in sections 197 and 198 of the SFA. If the exemption applies, the stabiliser is shielded from those specific statutory provisions. If it does not apply, the conduct may be scrutinised as potentially unlawful market conduct. Lawyers advising on stabilisation programmes therefore need to treat the exemption conditions as “gating requirements” for legality.
Practically, this regulation would be relevant to: (i) the stabilising bank and its compliance teams; (ii) the issuer and its counsel in structuring the offering and stabilisation arrangements; (iii) underwriters or placement agents coordinating distribution and post-issuance market support; and (iv) investors and counterparties who need assurance that their trades are within permitted frameworks. Even though the issuance described is historically anchored to June 2005, the regulatory approach remains instructive for later stabilisation exemptions and for understanding how MAS structures exemptions under the SFA.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular:
- Section 337(1) (authorising power for MAS to make exemptions)
- Sections 197 and 198 (market conduct provisions from which exemption is granted)
- Sections 274 and 275(2) (counterparty categories: persons referred to in section 274 and “sophisticated investors”)
- Futures Act (referenced in the provided metadata context)
- Stabilising Act (referenced in the provided metadata context)
- Timeline (legislation timeline reference in the provided metadata)
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.