Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 22) Regulations 2005
- Act Code: SFA2001-S412-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Regulation Number: SL 412/2005
- Commencement: 24 June 2005
- Status: Current version as at 27 Mar 2026 (per provided extract)
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Relevant Market Conduct Provisions Exempted: Sections 197 and 198 of the Securities and Futures Act
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 22) Regulations 2005 is a targeted regulatory instrument. In plain terms, it creates a narrow exemption from certain “market conduct” restrictions in the Securities and Futures Act (SFA) for a specific type of trading activity—namely, stabilising action—carried out in relation to a particular issuance of notes.
Stabilising action is a common feature of securities markets. When new debt securities are issued, market makers or arrangers may undertake limited buying (or related arrangements to buy) to help prevent excessive volatility and to support orderly trading. However, stabilisation can overlap with rules designed to prevent manipulation or misleading market conduct. This set of Regulations resolves that tension by carving out stabilisation from the general prohibitions, but only if strict conditions are met.
Importantly, the exemption is not general. It is tied to (i) a defined set of “Notes” (US$ fixed rate notes issued by a named issuer in June 2005), (ii) a defined stabilising actor (Citigroup Global Markets Limited and related corporations), and (iii) a limited time window (within 30 days from the date of issue). The Regulations therefore function as a bespoke permission for a particular transaction and market practice.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and states that they come into operation on 24 June 2005. This matters for practitioners because the exemption’s availability depends on the timing of stabilising action relative to the commencement and the 30-day post-issue period.
Section 2 (Definitions) is central because it tightly constrains the scope of the exemption. Two defined terms are used in the operative provision:
(a) “Notes” means the US$ fixed rate notes issued by Thai Olefins Public Company Limited in June 2005 for a principal amount of up to US$300 million. This definition is transaction-specific: it identifies the issuer, the currency and interest structure (US$ fixed rate), the issuance month/year (June 2005), and the maximum principal amount (up to US$300 million). As a result, stabilising action in relation to other issuances, other note types, or different amounts would not fall within the exemption.
(b) “stabilising action” means 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. This definition is also actor-specific and purpose-specific. It covers not only actual purchases but also offers or agreements to buy, provided the purpose is stabilisation/price maintenance.
Section 3 (Exemption) is the operative clause. 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 two alternative counterpart conditions:
(a) the stabilising action is taken with a person referred to in section 274 of the Act; or
(b) the stabilising action is taken with a sophisticated investor as defined in section 275(2) of the Act.
While the extract does not reproduce Sections 197, 198, 274, or 275(2), the structure indicates that the SFA contains prohibitions (Sections 197 and 198) that would otherwise restrict certain trading or market conduct. The Regulations suspend those prohibitions for stabilising action, but only when the stabilising trades are conducted with the specified categories of counterparties. This is a common legislative technique: even where stabilisation is permitted, it is often permitted only in controlled circumstances to reduce the risk of manipulation and to ensure counterparties are within a regulated or higher-information group.
From a practitioner’s perspective, the key compliance tasks arising from Section 3 are:
- Timing: stabilising action must occur within 30 days from the date of issue of the Notes.
- Instrument identity: the action must relate to the defined “Notes” (issuer, June 2005 issuance, US$ fixed rate, up to US$300 million).
- Actor identity: the stabilising action must be taken by Citigroup Global Markets Limited or its related corporations.
- Purpose: the action must be to stabilise or maintain market price.
- Counterparty category: trades must be with a person under section 274 or with a sophisticated investor under section 275(2).
How Is This Legislation Structured?
These Regulations are structured in a straightforward, short format typical of transaction-specific exemptions. The document contains:
- Section 1: Citation and commencement (when the Regulations take effect).
- Section 2: Definitions (defining “Notes” and “stabilising action” to confine the exemption’s scope).
- Section 3: Exemption (the operative provision exempting stabilising action from specified SFA market conduct sections, subject to time and counterparty conditions).
There are no additional parts or complex schedules in the extract provided. The legislative design is therefore “definition-driven”: once the defined terms are satisfied, the exemption in Section 3 becomes available, but only within the narrow parameters set out.
Who Does This Legislation Apply To?
The Regulations apply to parties involved in stabilising action in relation to the defined Notes. In practical terms, the exemption is directed at Citigroup Global Markets Limited and its related corporations (as defined in Section 2). If those entities undertake stabilising purchases or purchase arrangements, they may rely on the exemption.
However, the exemption also depends on the counterparty to the stabilising transactions. Section 3 limits the exemption to stabilising action taken with either (i) persons referred to in section 274 of the SFA or (ii) sophisticated investors under section 275(2). Accordingly, even where the stabiliser is the correct actor and the Notes are the correct instrument, the exemption may not apply if the stabilising trades are executed with counterparties outside those categories.
Why Is This Legislation Important?
This Regulations is important because it provides legal certainty for a specific market practice—stabilisation—while preserving the integrity of Singapore’s market conduct framework. Without such an exemption, stabilising activity could potentially fall within prohibitions in the SFA that are designed to prevent market manipulation or improper conduct. By expressly exempting stabilising action from Sections 197 and 198 within a defined window, the Regulations enables arrangers and market participants to perform stabilisation in a manner consistent with regulatory expectations.
For practitioners, the value lies in the precision of the exemption. The Regulations does not merely permit stabilisation generally; it requires careful alignment with defined terms and conditions. In transaction documentation and compliance planning, lawyers typically need to confirm: (i) the exact instrument description matches the definition of “Notes”; (ii) the stabiliser is the defined entity; (iii) stabilisation occurs within the 30-day post-issue period; and (iv) counterparties are within the permitted categories. These are not “best efforts” requirements; they are legal conditions that determine whether the exemption is available.
Enforcement risk is also a practical consideration. If stabilising action is carried out outside the exemption parameters—such as after the 30-day period, in relation to notes outside the defined issuance, or with counterparties not covered by section 274 or the sophisticated investor definition—then the stabiliser may lose the protection of the exemption and could face regulatory consequences under the underlying SFA provisions (Sections 197 and 198). Therefore, the Regulations is not only permissive but also a compliance benchmark.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular:
- Sections 197 and 198 (market conduct provisions exempted by Section 3)
- Section 274 (counterparty category referenced in Section 3(a))
- Section 275(2) (definition of “sophisticated investor” referenced in Section 3(b))
- Section 337(1) (authorising power for making these Regulations)
- Futures Act (referenced in the provided metadata as related legislation)
- Stabilising Act (referenced in the provided metadata as related legislation)
- Timeline (legislation timeline reference in the provided 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. 22) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.