Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 21) Regulations 2004
- Act Code: SFA2001-S314-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 1 June 2004
- Regulation No.: SL 314/2004
- Status: Current version as at 27 Mar 2026 (per provided extract)
- 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. 21) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a targeted set of subsidiary rules made under the Securities and Futures Act (“SFA”). In plain terms, it creates a narrow exemption from certain market conduct restrictions when specified parties take “stabilising action” in relation to a particular tranche of debt securities (“Notes”).
The regulations are not a general framework for all securities stabilisation. Instead, they are designed for a specific issuance: 3-year floating rate notes due June 2007 issued by Oversea-Chinese Banking Corporation Limited (“OCBC”) under a defined debt issuance programme. The exemption is time-limited and applies only within a short window after issuance.
From a practitioner’s perspective, the key legal function is to clarify that, for the specified Notes and within the specified period, the stabilising activities described in the regulations will not trigger the prohibitions contained in sections 197 and 198 of the SFA. Those sections typically regulate market conduct and dealings that could otherwise be characterised as improper trading or manipulation. This regulation therefore enables legitimate stabilisation practices—commonly used in capital markets—to support orderly trading and price formation during the early days after issuance.
What Are the Key Provisions?
Section 1: Citation and commencement. The regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 21) Regulations 2004” and come into operation on 1 June 2004. This matters for compliance planning: any stabilising action intended to rely on the exemption must fall within the regulatory framework effective from that commencement date.
Section 2: Definitions—“Notes” and “stabilising action”. The definitions are crucial because they tightly circumscribe the exemption.
“Notes” are defined as the 3-year floating rate notes due June 2007 issued by OCBC for a principal amount of up to US$750 million, pursuant to the S$2 billion Programme for Issuance of Debt Instruments established in September 2003. This definition is highly specific: it ties the exemption to a particular instrument and issuance programme, limiting the ability to extend the exemption to other debt securities.
“Stabilising action” is defined as an action taken in Singapore or elsewhere by Deutsche Bank AG, Singapore Branch 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 identifies both:
- the permitted actor (Deutsche Bank AG, Singapore Branch, and related corporations); and
- the permitted conduct (buying, offering, or agreeing to buy); and
- the purpose (stabilise or maintain market price).
For counsel, the defined scope is a compliance checklist: the stabilising party must be within the defined group, and the activity must be directed to stabilisation/price maintenance, not to other commercial objectives.
Section 3: Exemption from sections 197 and 198 of the SFA. This is the operative provision. 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 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.
Although the extract does not reproduce sections 197, 198, 274, and 275, the structure indicates a two-part condition:
- Temporal condition: stabilising action must occur within 30 days from the date of issue of the Notes.
- Counterparty/participant condition: the stabilising action must be taken by a person within the categories in section 274, or by a sophisticated investor under section 275(2).
Practically, this means that even if the stabilising activity is otherwise consistent with the definition of “stabilising action”, the exemption will fail if the action is outside the 30-day window or if the relevant participant does not fall within the specified categories. For transaction documentation and internal controls, this is a critical gating issue.
Interplay between “stabilising action” and the exemption conditions. The regulations define stabilising action as being taken by Deutsche Bank AG, Singapore Branch (or related corporations). Section 3 then adds that the exemption applies to stabilising action taken within 30 days, with the stabilising action being taken by a person referred to in section 274 or a sophisticated investor. A lawyer should treat this as a layered test: the actor and conduct must satisfy the definition, and the exemption must also be satisfied by the participant category and time limit.
How Is This Legislation Structured?
The regulations are short and structured as a conventional subsidiary legislative instrument with a brief enacting formula and three substantive provisions:
- Section 1 (Citation and commencement): provides the name and effective date.
- Section 2 (Definitions): defines the two central terms—“Notes” and “stabilising action”—which determine the scope of the exemption.
- Section 3 (Exemption): sets out the legal consequence: sections 197 and 198 of the SFA do not apply to specified stabilising action in relation to the Notes, subject to the 30-day limit and the specified participant categories.
Because there are only three sections, the legal analysis is largely driven by the definitions and the conditions in section 3. There are no additional schedules, reporting requirements, or procedural steps in the extract provided. In practice, however, market conduct regimes often require documentation, disclosure, or compliance controls elsewhere in the SFA or related MAS notices; counsel should therefore read this exemption together with the broader market conduct framework.
Who Does This Legislation Apply To?
Primary beneficiaries and actors. The exemption is designed to facilitate stabilisation activities in relation to OCBC’s specified Notes. The definition of “stabilising action” points to Deutsche Bank AG, Singapore Branch and its related corporations as the relevant stabilising actors. Therefore, the regulation is most directly relevant to those entities planning or executing stabilisation trades.
Other relevant participants. Section 3 further limits the exemption to stabilising action taken with a person referred to in section 274 of the SFA or a sophisticated investor under section 275(2). This means that the exemption’s availability may depend on who is on the other side of the stabilising transactions, who is authorised to act, or how the stabilisation is structured under the SFA’s definitions. Practitioners should therefore map the transaction counterparties and roles to the categories in sections 274 and 275 to confirm eligibility.
Geographic scope. The definition of stabilising action expressly includes actions taken in Singapore or elsewhere. This is important for cross-border dealing: stabilisation may occur in multiple markets, and the exemption is drafted to cover that reality.
Why Is This Legislation Important?
This regulation is important because it addresses a practical tension in securities markets: stabilisation can be necessary to support orderly trading after issuance, but market conduct laws often prohibit conduct that could be interpreted as manipulation. By carving out a specific exemption, the regulations enable stabilisation within defined boundaries—instrument-specific, actor-specific, and time-limited.
For legal practitioners, the value lies in certainty and compliance design. The exemption provides a clear basis to structure stabilising activities without triggering the prohibitions in sections 197 and 198 of the SFA, provided the conditions are met. This reduces regulatory risk for arrangers, dealers, and issuers involved in the Notes offering.
From an enforcement and risk-management standpoint, the 30-day limitation is likely the most operationally sensitive element. Stabilisation strategies often evolve as trading develops; counsel should ensure that trading logs, trade dates, and settlement timelines are aligned with the “within 30 days from the date of issue” requirement. Similarly, the participant categories (section 274 persons and sophisticated investors) should be verified at the outset, because a misclassification could undermine reliance on the exemption.
Finally, because the “Notes” definition is highly specific, the regulation underscores that stabilisation exemptions in Singapore can be highly tailored. Practitioners should not assume that an exemption for one issuance automatically extends to other issuances, even if they are similar in nature or issued under the same programme.
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 (listed in provided metadata as related legislation).
- Stabilising Act (listed in provided metadata as related legislation).
- Timeline (listed in provided metadata as related documentation).
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. 21) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.