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 (SFA) (specifically, section 337(1))
- Commencement: 1 June 2004
- Enacting instrument: Made on 28 May 2004 by the Monetary Authority of Singapore (MAS)
- Legislative status (as provided): Current version as at 27 Mar 2026
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory focus: Exemption from market conduct prohibitions for stabilising transactions in specified notes
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 is a targeted regulatory instrument. In plain terms, it allows certain market participants to take “stabilising action” in relation to a specific issuance of debt securities—without triggering particular market conduct prohibitions in the Securities and Futures Act (SFA).
Stabilisation is a familiar concept in capital markets. When new securities are issued, their price can fluctuate sharply due to initial supply and demand dynamics. Stabilising transactions are intended to help maintain an orderly market and reduce extreme short-term volatility. However, stabilisation can also resemble conduct that market conduct rules generally prohibit—such as manipulative trading or improper support of prices. This is why the SFA contains prohibitions, and why exemptions are sometimes issued to permit stabilisation under controlled conditions.
This particular set of Regulations is narrow in scope. It does not create a general stabilisation regime for all debt instruments. Instead, it defines a specific set of “Notes” (a particular 3-year floating rate notes issuance by Oversea-Chinese Banking Corporation Limited) and specifies who may conduct stabilising action (Deutsche Bank AG, Singapore Branch, or its related corporations). It also limits the time window for the exemption (within 30 days from the date of issue).
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal title and states that the Regulations come into operation on 1 June 2004. This matters for practitioners because stabilising action must be assessed against the law in force at the relevant time. Here, the instrument is effective from 1 June 2004.
Section 2 (Definitions) is central because it determines the boundaries of the exemption.
“Notes” are defined as the 3-year floating rate notes due June 2007 issued by Oversea-Chinese Banking Corporation Limited 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: stabilising action is exempt only if it relates to these Notes (as defined), not to other instruments under the programme or other issuances.
“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 is also important because it focuses on buying-related conduct (including offers or agreements to buy) and ties it to the purpose of stabilisation/price maintenance.
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 respect to stabilising action taken:
- (a) by a person referred to in section 274 of the Act; or
- (b) by a sophisticated investor as defined in section 275(2) of the Act.
In practical terms, Section 3 creates a conditional “carve-out” from the SFA’s market conduct prohibitions. The exemption is not automatic for all stabilisation activity; it is limited by (i) the instrument (the defined Notes), (ii) the actor (Deutsche Bank AG, Singapore Branch, or related corporations, as captured by the definition of stabilising action), (iii) the time period (within 30 days from issue), and (iv) the counterparty/participant category (persons in section 274 or sophisticated investors under section 275(2)).
Although the extract does not reproduce sections 197, 198, 274, and 275, a practitioner would understand that these provisions typically relate to prohibitions against market manipulation and improper trading, and to the categories of persons permitted to participate in certain regulated activities. The exemption therefore functions as a legal permission to engage in otherwise prohibited conduct, but only within a tightly defined stabilisation framework.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with a conventional layout:
- Part/Section 1: Citation and commencement (when the Regulations take effect).
- Section 2: Definitions (defining “Notes” and “stabilising action” to determine the scope of the exemption).
- Section 3: Exemption (the operative carve-out from sections 197 and 198 of the SFA, subject to time and participant conditions).
There are no additional Parts or complex schedules in the extract provided. The legislative technique is to define the relevant securities and conduct precisely, then to exempt that conduct from specified statutory prohibitions.
Who Does This Legislation Apply To?
This legislation applies to stabilising action in relation to the defined Notes. The exemption is designed for the entities involved in the Notes’ issuance and market support activities—particularly Deutsche Bank AG, Singapore Branch and its related corporations, as captured by the definition of “stabilising action”.
However, Section 3 adds an additional layer: the exemption applies only where the stabilising action is taken within the 30-day period and involves a person falling within section 274 of the SFA or a sophisticated investor under section 275(2). Accordingly, the exemption is not merely about who conducts the trades; it is also about the regulatory status of the relevant counterparties/participants as contemplated by the SFA framework.
Why Is This Legislation Important?
For practitioners, the importance of these Regulations lies in their role as a legal permission within a market conduct compliance environment. In many jurisdictions, stabilisation activities can be scrutinised as potentially manipulative. By carving out stabilising action from specific SFA prohibitions, the Regulations reduce legal uncertainty for stabilisation participants—provided they stay within the defined scope.
From a compliance perspective, the Regulations highlight that stabilisation is time-bound and instrument-specific. The exemption applies only within 30 days from the date of issue. This means that any stabilising trades outside that window could fall back into the general prohibitions in sections 197 and 198 of the SFA. Similarly, stabilising action must relate to the specific Notes defined in Section 2; trading in other instruments would not be covered by the exemption.
Operationally, lawyers advising issuers, arrangers, dealers, or trading desks should treat this as a compliance checklist item: confirm the exact security identification, confirm the stabilisation purpose and conduct (buying/offer/agree to buy to maintain price), confirm the permitted actor(s), and confirm the 30-day timeline. Additionally, counsel should verify that the relevant counterparties/participants meet the categories referenced in sections 274 and 275(2), because the exemption is expressly conditioned on those categories.
Finally, the Regulations demonstrate MAS’s approach to market conduct regulation: rather than allowing broad discretion, MAS uses narrow exemptions tied to defined transactions and controlled circumstances. This is particularly relevant when advising on documentation (e.g., offering materials, stabilisation disclosures, internal trading policies) and on how to structure stabilisation programmes to remain within the exemption.
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 provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (legislation timeline reference as provided in the metadata)
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.