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
- Regulations: 3 sections (including definitions and exemption)
- Key provisions: Section 2 (definitions); Section 3 (exemption from sections 197 and 198 of the SFA)
- Regulatory status: Current version as at 27 March 2026 (per the legislation portal)
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 that creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (SFA). In plain terms, it allows specified market participants to take “stabilising action” in relation to a particular issuance of notes without breaching the general prohibitions that would otherwise apply.
The legislation is not a general framework for stabilisation. Instead, it is designed for a specific transaction: the issuance of US$ Fixed Rate Non-Call 7 Subordinated Callable Notes issued in June 2005 by Public Bank Berhad, up to a principal amount of US$400 million. The exemption is time-limited (within 30 days from the date of issue) and is limited to stabilising action taken by a defined set of persons, namely a person referred to in section 274 of the SFA or a “sophisticated investor” as defined in section 275(2) of the SFA.
At a high level, the Regulations reflect a policy balance. Regulators generally seek to prevent manipulative conduct and unfair market practices. However, stabilisation—when conducted in a controlled and transparent manner—can support orderly trading and reduce volatility around the launch of a new security. This instrument therefore permits stabilisation for a defined class of notes and within a defined window, while still leaving the broader market conduct regime intact for other dealings.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal identity of the Regulations and states that they come into operation on 21 June 2005. For practitioners, this matters because the exemption’s availability is tied to the issuance timeline and the 30-day period referenced in section 3. If stabilising action is undertaken outside the relevant timeframe, the exemption may not apply.
Section 2 (Definitions) is crucial because it tightly constrains what counts as “Notes” and what counts as “stabilising action.” The definition of “Notes” is transaction-specific: it refers to the US$ 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 means the exemption is not automatically available for other tranches, other issuers, or other note structures.
Section 2 also defines “stabilising action” as 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. Two practical implications follow. First, the exemption is linked to a particular stabilising entity (Citigroup Global Markets Limited and its related corporations). Second, the conduct covered includes not only actual purchases but also offers or agreements to buy—so contractual arrangements and conditional commitments may fall within the definition.
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 stabilising action being undertaken with one of two categories of counterparties/participants: (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.
Although the extract does not reproduce sections 197 and 198, the structure indicates that those sections contain general prohibitions or restrictions on market conduct (commonly, rules against market manipulation, misleading conduct, or improper trading practices). The exemption operates as a carve-out: it removes the application of those prohibitions to the specified stabilising action, but only when the action is within the defined scope and timeframe.
For legal and compliance teams, the key compliance task is to map the stabilising activity against the exemption conditions: (i) the instrument must be the defined “Notes”; (ii) the stabilising action must be taken by Citigroup Global Markets Limited or its related corporations; (iii) the action must occur within 30 days from the date of issue; and (iv) the relevant dealings must be with a person in section 274 or with a sophisticated investor under section 275(2). If any element is missing, the exemption may not protect the conduct.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, minimalist format:
Section 1 sets out the citation and commencement date.
Section 2 provides definitions that narrow the scope of the exemption—particularly the definitions of “Notes” and “stabilising action.”
Section 3 contains the exemption itself, specifying which provisions of the SFA are disapplied, the timeframe (30 days from issue), and the qualifying categories of persons (section 274 persons or sophisticated investors).
There are no additional parts or schedules in the extract, reflecting the Regulations’ function as a transaction-specific exemption rather than a comprehensive regulatory regime.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising dealings in the defined notes. The exemption is framed around stabilising action taken by Citigroup Global Markets Limited (or its related corporations). Therefore, the primary regulated entity is the stabilising actor and its corporate group.
However, the exemption also depends on the category of persons with whom the stabilising action is conducted. Section 3 requires that the stabilising action be taken “with” either (a) a person referred to in section 274 of the SFA or (b) a sophisticated investor under section 275(2). Accordingly, the exemption’s practical reach extends to counterparties that fall within those statutory categories. If stabilising trades are executed with retail investors or other persons outside those categories, the exemption may not apply to those trades.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework can accommodate stabilisation while preserving the integrity of the market. Without an exemption, stabilising purchases or related arrangements could trigger prohibitions in the SFA that are designed to prevent manipulation or improper price support. By disapplying sections 197 and 198 for a limited period and limited instruments, the Regulations provide legal certainty to market participants engaged in stabilisation around a new issuance.
From a practitioner’s perspective, the value lies in the precision of the exemption. The Regulations are not open-ended. They are anchored to a specific note issuance (Public Bank Berhad’s June 2005 subordinated callable notes up to US$400 million), a specific stabilising actor (Citigroup Global Markets Limited and related corporations), and a specific timeframe (30 days from issue). This kind of drafting is typical of transaction-specific exemptions and is designed to prevent “regulatory arbitrage” where stabilisation could otherwise be justified by generic arguments.
In enforcement and compliance terms, the exemption also creates clear audit points. Market conduct compliance teams should document: the issuance date; the dates of stabilising trades; the identity of the trading entity and its corporate relationship to Citigroup Global Markets Limited; the instrument identifiers confirming the notes fall within the defined “Notes”; and the counterparty classification confirming that trades are with section 274 persons or sophisticated investors. Where these elements cannot be evidenced, the exemption may be unavailable, exposing the stabilising activity to the general prohibitions in sections 197 and 198.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, sections 197, 198, 274, 275(2), and the authorising provision 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. 19) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.