Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 19) Regulations 2004
- Act Code: SFA2001-S285-2004
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Commencement: 17 May 2004
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Regulation No. / Citation: SL 285/2004
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Definitions (including “Notes” and “stabilising action”)
- Regulation 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action
- Status: Current version as at 27 Mar 2026 (per the provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 19) Regulations 2004 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct restrictions under the Securities and Futures Act (SFA). In plain terms, it allows a specified financial institution to take “stabilising action” in relation to a particular issuance of notes, without those actions automatically breaching the SFA provisions that would otherwise apply.
Stabilisation is a common feature of securities markets. When new securities are issued, there can be volatility in the initial trading period. Market participants may conduct stabilising purchases (or related offers to buy) to help maintain an orderly market price. However, stabilisation can also resemble conduct that market conduct rules seek to prevent—such as manipulation or misleading market activity. This legislation addresses that tension by carving out a controlled exemption, but only for a defined set of circumstances.
Importantly, this is not a general stabilisation regime for all notes. It is an exemption tailored to a specific instrument: “the 10-year guaranteed fixed rate notes due May 2014” issued by Jardine Matheson Finance Company Limited (up to US$300 million) and guaranteed by Jardine Matheson Holdings Limited. The exemption is also limited to stabilising action taken by UBS Limited (and its related corporations) and is time-bound to a 30-calendar-day period after issuance.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is straightforward. It provides the short title and confirms that the Regulations came into operation on 17 May 2004. For practitioners, this matters mainly for determining whether the exemption could apply to stabilising activities conducted after that date.
Regulation 2 (Definitions) is the heart of the instrument because it precisely defines the scope of the exemption. Two definitions are critical:
- “Notes” are defined as the specific 10-year guaranteed fixed rate notes due May 2014 issued by Jardine Matheson Finance Company Limited for a principal amount of up to US$300 million, guaranteed by Jardine Matheson Holdings Limited. This definition is highly specific—meaning the exemption does not extend to other note issuances, other maturities, or other issuers.
- “Stabilising action” is defined as an action taken in Singapore or elsewhere by UBS Limited (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 significant: it captures not only actual purchases but also certain pre-trade commitments that may be relevant to stabilisation strategies.
Regulation 3 (Exemption) provides the legal mechanism. It states that, subject to paragraph (2), sections 197 and 198 of the Act shall not apply to stabilising action carried out in respect of any of the Notes with respect to either of the following counterparties:
- a person referred to in section 274 of the SFA; or
- a sophisticated investor as defined in section 275(2) of the SFA.
While the extract does not reproduce sections 197, 198, 274, or 275, the structure indicates that the SFA contains market conduct rules that can restrict certain dealings or trading activities depending on the counterparty category. This exemption effectively removes the applicability of those restrictions for stabilising action, but only when the stabilising transactions involve the specified categories of persons (section 274 persons or sophisticated investors).
Regulation 3(2) (Time limit) is a further limiting condition. The exemption does not apply to stabilising action carried out at any time after the expiry of the period of 30 calendar days from the date of the issuance of the Notes. This is a critical compliance point: even if the stabilising activity is otherwise within the defined issuer, notes, and stabiliser (UBS and related corporations), it will fall outside the exemption if conducted beyond the 30-day window.
For a practitioner advising on stabilisation conduct, this time limit is often the most operationally challenging requirement—because stabilisation strategies, market conditions, and execution schedules may extend beyond what parties initially expect. The regulation’s wording is strict: “any time after the expiry” of the 30-calendar-day period. That suggests a bright-line compliance approach.
How Is This Legislation Structured?
The Regulations are structured as a short, three-regulation instrument:
- Regulation 1 sets out the citation and commencement date.
- Regulation 2 provides definitions that determine the scope of “Notes” and “stabilising action”.
- Regulation 3 creates the exemption, including (i) the categories of persons to which the exemption applies and (ii) the 30-calendar-day time limitation.
There are no additional parts or complex schedules in the provided extract. The legislative design is therefore “precision by definition”: the exemption is narrow because the definitions and conditions are narrow.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to stabilising activities undertaken by UBS Limited and its related corporations in relation to the defined Jardine Matheson notes. The exemption is not available to other dealers or arrangers unless they fall within the definition of “UBS Limited, or any of its related corporations.”
Additionally, the exemption is conditioned on the identity of the counterparty. Stabilising action must be carried out with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). This means that even where stabilisation is conducted by the permitted stabiliser, the exemption may not apply if the stabilising trades are executed with other categories of persons not covered by those provisions.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing manipulative or improper market activity, and (2) permitting legitimate market practices that support orderly trading during issuance. By exempting stabilising action from specified SFA provisions, the Regulations provides legal certainty to the stabilising agent and counterparties for a limited period and a specific transaction.
For practitioners, the key significance lies in the compliance boundaries. The exemption is not open-ended. It is constrained by:
- Instrument specificity (only the defined “Notes” are covered);
- Actor specificity (only UBS Limited and related corporations are covered);
- Counterparty categories (section 274 persons or sophisticated investors); and
- Temporal limitation (no stabilising action after 30 calendar days from issuance).
From an enforcement perspective, these constraints reduce ambiguity and help MAS assess whether stabilising conduct is genuinely intended to maintain market price in an orderly manner, rather than to distort the market. For deal counsel, the regulation also informs documentation and execution planning: stabilisation arrangements, trade reporting, and internal controls should be aligned with the defined scope and the 30-day cut-off.
Finally, this instrument is a reminder that exemptions under the SFA can be highly tailored. Even within a broader regulatory theme (market conduct and stabilisation), exemptions may be issued for specific transactions and may not automatically generalise to other offerings. Lawyers should therefore treat each stabilisation exemption as a discrete legal permission with its own conditions.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the exemption-making power under section 337(1).
- Futures Act (as referenced in the provided metadata context)
- Stabilising Act (as referenced in the provided metadata context)
- Legislation Timeline (MAS legislation timeline reference, per 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. 19) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.