Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 19) Regulations 2005
- Act Code: SFA2001-S401-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Commencement: 21 June 2005
- Enacting date: Made on 3 June 2005
- Regulatory status: Current version as at 27 March 2026
- Key provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “Notes” and “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. 19) Regulations 2005 (“Stabilising Action (Notes) Regulations”) is a targeted exemption instrument. In plain language, it allows certain market participants to take “stabilising action” in relation to a specific issuance of notes without breaching particular market conduct prohibitions in the Securities and Futures Act (SFA).
In securities markets, stabilisation is a practice used around the time of issuance to support or maintain the market price of newly issued instruments. However, stabilisation can overlap with rules designed to prevent manipulation, misleading conduct, or improper trading. This Regulations addresses that tension by carving out a narrow exemption—so long as the stabilising activity fits within the defined scope and timing.
Importantly, the exemption is not general. It is limited to a particular class of notes (“Notes”) and a particular stabilising actor (Citigroup Global Markets Limited and its related corporations), and it applies only within a defined window after issuance (30 days from the date of issue). This makes the Regulations highly relevant for practitioners advising issuers, dealers, and trading desks involved in structured issuance and post-issuance market support.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal legal identity of the Regulations and confirms that they came into operation on 21 June 2005. For legal practice, commencement matters because exemptions must be in force at the time the stabilising action is undertaken. Where stabilisation occurs around issuance dates, counsel should align trading timelines with the effective date and the “within 30 days from the date of issue” requirement in section 3.
Section 2 (Definitions) is the core interpretive section. It defines two key terms:
- “Notes” means the US$ Fixed Rate Non-Call 7 Subordinated Callable Notes issued in June 2005 by Public Bank Berhad for a principal amount of up to US$400 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Citigroup Global Markets 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.
These definitions are legally significant because the exemption in section 3 is triggered only when the conduct falls within the defined meaning. For example, the definition expressly covers buying and offers/agreements to buy, and it ties the purpose to stabilising or maintaining market price. It also specifies the stabilising actor: Citigroup Global Markets Limited and its related corporations. If a different entity performs the trades, or if the trades are not aimed at stabilisation, the exemption may not apply.
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, with respect to stabilising action taken by:
- (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.
Practically, section 3 does two things. First, it identifies the prohibited provisions from which the exemption is granted (sections 197 and 198 of the SFA). Second, it limits the exemption by time (30 days from issue) and by counterparty/participant category (persons under section 274 or sophisticated investors under section 275(2)).
For practitioners, the “within 30 days” limitation is often the most operationally challenging element. Stabilisation programmes typically involve pre-issue positioning, post-issue trading, and ongoing market support. Counsel should ensure that the trades intended to be covered by the exemption are executed within the statutory window and that documentation and compliance controls can demonstrate that the trades were stabilising action as defined.
Equally important is the category requirement. Even if the trading is undertaken by Citigroup Global Markets Limited (or related corporations), the exemption is expressed to apply where the stabilising action is taken “with” a person referred to in section 274 or a sophisticated investor. This means advisers should verify the legal status of the relevant counterparties and confirm that the transaction counterparties fall within the specified categories.
How Is This Legislation Structured?
The Regulations are structured as a short, three-section instrument:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions, which are essential to determine the scope of “Notes” and “stabilising action”.
- Section 3 contains the exemption and specifies the conditions under which sections 197 and 198 of the SFA do not apply.
Because the Regulations are concise, the practitioner’s task is largely interpretive and compliance-oriented: mapping the trading activity to the defined “Notes” and “stabilising action”, and then ensuring the timing and participant categories satisfy section 3.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the specific June 2005 issuance of Public Bank Berhad’s US$ Fixed Rate Non-Call 7 Subordinated Callable Notes (up to US$400 million). The stabilising action is defined as actions taken by Citigroup Global Markets Limited or its related corporations, in Singapore or elsewhere, to buy (or offer/agree to buy) the Notes for the purpose of stabilising or maintaining market price.
However, the exemption’s practical reach also depends on the identity of the counterparty or participant category referenced in section 3. The exemption is framed to apply where the stabilising action is taken within 30 days from issue with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). Accordingly, the Regulations are most relevant to market makers, dealers, and trading entities involved in stabilisation programmes, and to legal teams advising on whether particular trades are exempt from the SFA’s market conduct prohibitions.
Why Is This Legislation Important?
This Regulations is important because it provides a legally sanctioned pathway for stabilisation in a regulated market environment. Without an exemption, stabilising trades could be scrutinised under market conduct prohibitions—potentially exposing firms and individuals to regulatory action or enforcement risk. By carving out an exemption, the Regulations supports market functioning around issuance while preserving the integrity of the market by limiting the exemption to a narrow set of conditions.
From a compliance perspective, the Regulations are a reminder that exemptions are not “blanket permissions”. They are typically conditional and fact-specific. Practitioners should treat the defined terms and the statutory conditions (notably the 30-day window and the specified participant categories) as compliance requirements that must be evidenced. In practice, this means maintaining trade records, stabilisation rationales, and counterparty documentation that align with the definitions and the exemption conditions.
Finally, the Regulations illustrate how Singapore’s market conduct framework balances investor protection with practical market mechanisms. Stabilisation can benefit price discovery and reduce volatility immediately after issuance, but it must be carefully bounded to avoid manipulation. This targeted exemption reflects that policy approach: allowing stabilisation for defined instruments and defined actors, within a limited time period.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular, sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1)
- Futures Act — referenced in the legislative metadata context (for broader market conduct framework)
- Stabilising Act — referenced in the legislative metadata context (for stabilisation-related regulatory concepts)
- Timeline — for version control and confirming the applicable instrument as at the relevant 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. 19) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.