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 (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 21 June 2005
- Legislative status: Current version as at 27 March 2026 (per the legislation portal)
- Regulation number: SL 401/2005
- Key provisions: Regulation 1 (citation and commencement); Regulation 2 (definitions); Regulation 3 (exemption)
- Primary legal effect: Exempts specified “stabilising action” in relation to specified Notes from the operation of sections 197 and 198 of the Securities and Futures Act
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 Exemption Regulations”) is a targeted regulatory instrument. In plain terms, it creates a narrow exemption allowing certain market participants to take stabilising steps in connection with a particular issuance of debt securities—without breaching the general market conduct rules that would otherwise apply.
The Regulations are not a broad framework for stabilisation across all securities. Instead, they are tied to a specific set of “Notes” issued in June 2005 by Public Bank Berhad, and to stabilising activity carried out by Citigroup Global Markets Limited (and its related corporations). The exemption applies only during a limited time window: within 30 days from the date of issue of the Notes.
At the core, the Regulations respond to a practical market reality: underwriters and dealers sometimes intervene to support the trading price or maintain orderly market conditions after an issuance. Singapore’s Securities and Futures Act contains provisions designed to prevent improper market manipulation and misleading conduct. This subsidiary legislation carves out a controlled exception for stabilising actions, but only where the action and the counterparties fall within defined boundaries.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) provides the formal name and the effective date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 19) Regulations 2005” and come into operation on 21 June 2005. For practitioners, this matters because the exemption’s availability depends on timing—particularly the “within 30 days from the date of issue” requirement in Regulation 3.
Regulation 2 (Definitions) sets the scope by defining two critical terms: “Notes” and “stabilising action”. The definition of “Notes” is highly specific. It refers to US$ Fixed Rate Non-Call 7 Subordinated Callable Notes issued in June 2005 by Public Bank Berhad, with a principal amount of up to US$400 million. This specificity is a hallmark of exemption regulations: the exemption is not meant to be general-purpose; it is meant to apply to a particular issuance.
“Stabilising action” is also defined narrowly. It 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. This definition is important because it captures not only actual purchases but also offers or agreements to purchase—conduct that could otherwise be scrutinised under market conduct rules.
Regulation 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Securities and Futures Act shall not apply to any stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with stabilising action carried out 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 provided does not reproduce sections 197, 198, 274, or 275(2), the structure indicates the legislative design: the exemption is conditional both on what is being done (stabilising action in respect of the defined Notes) and who the stabilising activity is conducted with (either a specified category of persons under section 274 or sophisticated investors under section 275(2)).
For a practitioner, the conditional nature of Regulation 3 is the key compliance point. Even if stabilising activity is undertaken by the defined stabiliser (Citigroup Global Markets Limited or its related corporations), the exemption will only be available if the stabilising action is taken within the 30-day post-issue period and the counterparty fits within the statutory categories. This means that documentation, trade counterparties, and timing controls become central to legal risk management.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with a conventional layout:
- Part/Regulation 1: Citation and commencement (when the Regulations take effect).
- Regulation 2: Definitions (defining “Notes” and “stabilising action” to lock in the scope).
- Regulation 3: Exemption (the operative legal effect, specifying which Securities and Futures Act provisions are disapplied, the time window, and the permitted counterparty categories).
Notably, the Regulations contain no additional schedules or procedural requirements in the extract. In practice, however, compliance teams should still verify whether the parent Act or other subsidiary instruments impose reporting, record-keeping, or conduct constraints relevant to stabilisation activities.
Who Does This Legislation Apply To?
The exemption is directed at stabilising actions in relation to the defined Notes. While the Regulations do not explicitly list “regulated persons” in the way some market conduct rules do, the definition of “stabilising action” effectively identifies the stabiliser: Citigroup Global Markets Limited and its related corporations. Therefore, the exemption is practically relevant to the dealer/underwriter group conducting stabilisation.
In addition, Regulation 3 conditions the exemption on the identity of the counterparty. Stabilising actions must be taken “with” either a person referred to in section 274 of the Act or a sophisticated investor as defined in section 275(2). This means that even within the stabiliser’s trading activity, counterparties must be screened to ensure they fall within the permitted categories. If stabilising trades are executed with persons outside those categories, the exemption may not apply, and sections 197 and 198 could potentially be engaged.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct regime balances two competing objectives: (1) preventing manipulative or improper trading practices, and (2) allowing legitimate market stabilisation that supports orderly trading after a securities issuance. By disapplying sections 197 and 198 for a limited period and in a defined context, the law provides legal certainty to market participants who engage in stabilising activity.
For practitioners advising issuers, dealers, and trading desks, the exemption is a compliance “gatekeeper” instrument. It is not enough to know that stabilisation is generally permitted; counsel must confirm that the stabilisation falls within the exact statutory definitions. Here, that means confirming the Notes’ identity (issuer, instrument type, and size), the stabiliser’s identity (Citigroup Global Markets Limited and related corporations), the geographic scope (action taken in Singapore or elsewhere), and the timing (within 30 days from issue).
Equally, the counterparty limitation in Regulation 3 is a frequent source of operational risk. Stabilisation strategies may involve multiple counterparties across different trading venues. If trades are executed with counterparties that do not qualify under section 274 or do not meet the sophisticated investor definition in section 275(2), the exemption may not protect the conduct. In practice, this requires robust onboarding and classification processes, trade-level record keeping, and legal review of stabilisation programmes.
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; relevant for broader market conduct context, though not directly evidenced in the provided extract).
- Stabilising Act (as referenced in the platform metadata; relevant for the concept of stabilisation, though the operative legal text here is in the SFA subsidiary regulations).
- Timeline (legislation portal feature used to confirm the correct version as at 27 March 2026).
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.