Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 20) Regulations 2005
- Act Code: SFA2001-S407-2005
- Type: Subsidiary Legislation (sl)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Power Used: Section 337(1) of the Securities and Futures Act
- Citation: SL 407/2005
- Commencement: 23 June 2005
- Status: Current version as at 27 Mar 2026 (per the legislation timeline)
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 20) Regulations 2005 is a targeted regulatory instrument that creates a limited exemption from certain “market conduct” rules under the Securities and Futures Act (SFA). In practical terms, it permits stabilising activity in relation to a specific issuance of notes—without triggering the prohibitions that would otherwise apply.
Stabilising action is a common feature of capital markets transactions. During and shortly after a new issue, market participants may take certain steps to support or stabilise the trading price of the securities in order to reduce volatility and support orderly trading. However, stabilising conduct can also resemble prohibited trading practices if not carefully bounded. This regulation addresses that tension by carving out an exemption for stabilising actions in respect of a defined set of notes, taken by a defined stabiliser, within a defined time window, and for defined categories of counterparties.
Although the regulation is short, it is legally significant because it operates as a precise “permission” to conduct otherwise restricted conduct. For practitioners, the key is to understand the boundaries: what the notes are, who may stabilise, what actions qualify, when the exemption applies, and which investors or persons may be involved.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name and the commencement date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 20) Regulations 2005” and came into operation on 23 June 2005. This matters for compliance timing—stabilising actions must fall within the exemption’s temporal scope.
Section 2 (Definitions) is the heart of the regulation because it defines the objects and conduct that qualify for the exemption.
“Notes” are defined very specifically as the 7-year fixed rate guaranteed notes due June 2012 issued by Indosat International Finance Company B.V. for a principal amount of up to US$250 million, and irrevocably and unconditionally guaranteed by PT Indosat Tbk. This specificity is crucial: the exemption is not a general stabilisation regime for any notes. It is tied to a particular issuance.
“Stabilising action” is also narrowly defined. It means an action taken in Singapore or elsewhere by J.P. Morgan Securities Ltd. (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 definition therefore focuses on (i) the actor (J.P. Morgan Securities Ltd. and related corporations), (ii) the type of dealing (buying or offering/agreeing to buy), and (iii) the purpose (stabilising or maintaining market price).
Section 3 (Exemption) provides the operative legal effect. It states that Sections 197 and 198 of the Act shall not apply to stabilising actions taken in respect of any of the Notes, within 30 days from the date of issue of the Notes, with certain counterparties.
Two elements must be satisfied simultaneously:
- Time window: the stabilising action must be taken within 30 days from the date of issue of the Notes.
- Counterparty/investor category: the stabilising action must be with either:
- a person referred to in section 274 of the Act, or
- a sophisticated investor as defined in section 275(2) of the Act.
From a practitioner’s perspective, this is a compliance “gate.” Even if the stabiliser and the notes match the definitions, the exemption will not apply unless the stabilising dealings are conducted with the permitted categories of persons. The regulation thus links stabilisation permissions to the SFA’s investor classification framework.
Finally, the enacting formula indicates the Regulations were made on 22 June 2005 by the Managing Director of MAS, reflecting the formal legislative process and the regulatory intent to authorise a specific transaction-related exemption.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three substantive provisions:
- Section 1: Citation and commencement (sets the legal identity and start date).
- Section 2: Definitions (defines “Notes” and “stabilising action” with transaction-specific precision).
- Section 3: Exemption (disapplies SFA sections 197 and 198 for qualifying stabilising actions within a defined period and with defined counterparties).
There are no additional parts or schedules in the extract provided; the entire legal mechanism is contained in the definitions and the exemption clause.
Who Does This Legislation Apply To?
This legislation applies to stabilising actions in relation to the defined Notes. In effect, it is relevant primarily to the stabilising dealer and its related corporations—because the definition of “stabilising action” is limited to actions taken by J.P. Morgan Securities Ltd. or its related corporations. Therefore, the exemption is not broadly available to any market participant; it is transaction- and actor-specific.
However, the exemption also depends on who the stabilising dealings are with. Section 3 requires that the stabilising action be taken with either (i) a person referred to in section 274 of the SFA, or (ii) a sophisticated investor under section 275(2) of the SFA. Accordingly, the exemption’s practical scope includes the counterparties involved in the stabilising trades, not merely the stabiliser’s identity.
Why Is This Legislation Important?
Although the Regulations are brief, they are important because they provide a legally controlled pathway for stabilisation activity in Singapore. Without such an exemption, stabilising conduct could fall within the prohibitions or restrictions contained in Sections 197 and 198 of the SFA. By disapplying those provisions for qualifying actions, the Regulations reduce legal uncertainty for transaction participants and enable market practice consistent with orderly trading objectives.
For practitioners advising issuers, dealers, or trading desks, the key value lies in the precision of the exemption. The Regulations do not create a general stabilisation regime; they create a narrow carve-out. This means that compliance teams must verify, as a matter of fact and documentation, that:
- the securities being dealt with are indeed the defined 7-year fixed rate guaranteed notes due June 2012 issued by the specified issuer and guaranteed by the specified guarantor;
- the stabilising activity is undertaken by J.P. Morgan Securities Ltd. or its related corporations;
- the dealing activity falls within the defined conduct (buying, or offering/agreeing to buy);
- the dealing occurs within 30 days from the date of issue; and
- the counterparties are within the permitted categories (section 274 persons or sophisticated investors).
From an enforcement and risk perspective, the exemption’s narrowness also means that any deviation—such as stabilising outside the 30-day period, dealing with an impermissible counterparty category, or dealing in notes other than the defined issuance—could expose the stabiliser to regulatory consequences under the underlying SFA provisions that are otherwise disapplied.
Finally, the Regulations illustrate how Singapore’s market conduct framework uses subsidiary legislation to tailor exemptions to specific transactions. This approach supports market efficiency while maintaining investor protection and market integrity.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the legislation metadata timeline context).
- Stabilising Act (as referenced in the legislation metadata timeline context).
- Timeline / Legislation timeline (for version control and amendments tracking).
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. 20) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.