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
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (specifically section 337(1))
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 23 June 2005
- Regulatory Instrument Number: SL 407/2005
- Status: Current version as at 27 March 2026 (timeline indicates original making on 23 June 2005)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (“Notes”, “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the SFA 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. 20) Regulations 2005 is a narrow, transaction-specific regulatory instrument. In plain terms, it creates a legal “carve-out” from certain market conduct prohibitions in the Securities and Futures Act (SFA) for a particular type of activity—namely, stabilising purchases—carried out in relation to a defined set of debt securities (“Notes”).
Stabilisation is a common market practice in securities issuance. When new notes are issued, market liquidity and price discovery may be volatile. Stabilising actions are intended to support orderly trading and reduce excessive price fluctuations during the early period after issuance. However, stabilisation can overlap with conduct that, absent an exemption, might be treated as improper market behaviour under the SFA’s market conduct rules.
This Regulations addresses that tension by exempting specified stabilising action from the application of SFA provisions that otherwise restrict or regulate certain dealing activities. The exemption is limited by time (within 30 days from the date of issue), by the identity of the persons who may be involved (a specified category under section 274 of the SFA, or a “sophisticated investor” under section 275(2)), and by the scope of the “Notes” and the stabilising actor (J.P. Morgan Securities Ltd., or its related corporations).
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and confirms that the Regulations came into operation on 23 June 2005. For practitioners, this matters because the exemption only becomes available from the commencement date, and the stabilisation window in section 3 is calculated from the date of issue of the Notes, not from the Regulations’ commencement.
Section 2 (Definitions) is the heart of the instrument’s precision. It defines two critical terms:
- “Notes” means the 7-year fixed rate guaranteed notes due June 2012 issued by Indosat International Finance Company B.V. for up to US$250 million, irrevocably and unconditionally guaranteed by PT Indosat Tbk.
- “stabilising action” 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.
These definitions are legally significant because they confine the exemption to a specific issuance and a specific stabilisation participant. If a different dealer were to stabilise, or if the instruments were not the defined “Notes”, the exemption would not apply. Similarly, if the dealing were not undertaken for the purpose of stabilising or maintaining market price, the definition would not be satisfied.
Section 3 (Exemption) provides the operative relief. It states that sections 197 and 198 of the 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 dealings involving either:
- (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 the text of sections 197 and 198, the structure indicates that those provisions are the market conduct rules that would otherwise constrain the relevant dealing activities. The exemption is therefore best understood as a targeted permission: stabilising purchases (and offers or agreements to buy) by the defined stabiliser, within the defined time window, and in dealings with the defined counterparties, are carved out from the prohibitions or restrictions in those sections.
Practical compliance point: the exemption is not “blanket”. It is conditional on (i) the stabilising action being within 30 days of the Notes’ issue date; (ii) the action being taken by the defined stabiliser (J.P. Morgan Securities Ltd. or related corporations); (iii) the Notes being the defined Notes; and (iv) the counterparty falling within section 274 or being a sophisticated investor under section 275(2). A lawyer advising on stabilisation documentation should therefore ensure that dealing records, counterparties, and timing evidence align with these conditions.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three sections:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that determine the scope of the exemption.
- Section 3 creates the exemption from specified SFA provisions (sections 197 and 198) for stabilising action in respect of the defined Notes, subject to timing and counterparty conditions.
There are no additional parts, schedules, or procedural requirements in the extract. The legal effect is therefore concentrated in section 3, with section 2 acting as the gatekeeper for scope.
Who Does This Legislation Apply To?
In terms of persons, the exemption is directed at stabilising action taken by J.P. Morgan Securities Ltd. or its related corporations. That does not necessarily mean only those entities may participate in the broader issuance process; rather, it means that the exemption from sections 197 and 198 is available only for stabilising actions performed by the defined stabiliser (or its related corporations) as described in the definition.
In terms of counterparties, section 3 restricts the exemption to stabilising actions “with” either (a) persons referred to in section 274 of the SFA or (b) sophisticated investors under section 275(2). This indicates that the exemption is not intended to facilitate stabilisation dealings with the general investing public. For practitioners, this is a key risk-control point: counterparties must be properly classified, and dealing arrangements should be structured so that the exemption conditions are met.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing regulatory goals: (1) maintaining fair and orderly markets by restricting potentially manipulative dealing practices, and (2) allowing legitimate market stabilisation in connection with securities issuance. By carving out stabilising action from sections 197 and 198 (within strict parameters), MAS provides legal certainty for market participants engaged in stabilisation.
From an enforcement and compliance perspective, the exemption’s narrow drafting reduces ambiguity. The defined “Notes” are specific to a particular issuer and guarantee structure; the stabiliser is identified by name; the stabilisation purpose is specified; and the exemption is time-limited to 30 days from issue. These constraints help regulators and market participants distinguish stabilisation from conduct that could be characterised as improper price support or market manipulation.
For lawyers advising issuers, arrangers, dealers, or compliance teams, the practical impact is that stabilisation strategies must be documented and executed within the exemption’s boundaries. Advisers should ensure that: (i) the stabilisation dealer is within the definition; (ii) the instruments are the defined Notes; (iii) the stabilisation period is tracked from the correct “date of issue”; (iv) counterparties are within section 274 or qualify as sophisticated investors; and (v) dealing conduct is consistent with the stabilisation purpose described in section 2.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular, sections 197, 198, 274, 275(2), and the enabling provision 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (legislation timeline tool for version verification)
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.