Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 23) Regulations 2004
- Act Code: SFA2001-S344-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (Cap. 289), specifically section 337(1)
- Commencement: 16 June 2004
- Legislative Status: Current version as at 27 March 2026 (original instrument dated 16 June 2004)
- Legislation Number: SL 344/2004
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions of “Notes” and “stabilising action”
- Section 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action
- Section 4: Revocation of an earlier related exemption regulation (No. 20)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 23) Regulations 2004 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct rules under the Securities and Futures Act (SFA). In plain terms, it allows a specific financial institution (and its related corporations) to take “stabilising action” in relation to a particular issuance of notes, without breaching the SFA provisions that would otherwise restrict or regulate such conduct.
Stabilisation is a common market practice in securities offerings. When new securities are issued, stabilisation activity may be used to support or maintain the market price during the early trading period. However, stabilisation can raise concerns about market manipulation or misleading price signals. Singapore’s market conduct framework therefore generally regulates conduct that could distort market prices. This set of Regulations carves out an exemption for stabilising activity, but only if strict conditions are met.
Crucially, the exemption is not general. It is tied to a defined set of notes (a specific US dollar subordinated notes issuance) and to a defined stabilising participant (ABN AMRO Bank N.V. and its related corporations). It also applies only within a limited time window after issuance—30 days from the date of issue. The Regulations therefore operate as a “permission slip” for a particular stabilisation scenario, rather than a broad relaxation of market conduct rules.
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 16 June 2004. For practitioners, this matters because the exemption can only be relied upon for stabilising action taken after the commencement date (and, in any event, within the 30-day post-issue period specified in section 3).
Section 2 (Definitions) is the backbone of the instrument. It defines two critical terms:
- “Notes” means the 10-year US dollar fixed rate subordinated notes due June 2014 to be issued by National Agricultural Cooperative Federation for a principal amount of up to US$350 million.
- “stabilising action” means an action taken in Singapore or elsewhere by ABN AMRO Bank N.V. (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 constrain the exemption to a particular product and a particular stabiliser. If a different issuer, different notes, or a different market participant is involved, the exemption would likely not apply. Similarly, the definition focuses on buying (or offers/agreements to buy) for stabilisation purposes, which implies that the conduct must be genuinely connected to stabilising or maintaining market price—not merely incidental trading.
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 by:
- a person referred to in section 274 of the Act; or
- a “sophisticated investor” as defined in section 275(2) of the Act.
In practical terms, section 3 creates an exemption from the SFA’s market conduct restrictions (in sections 197 and 198) for stabilising activity that meets the defined scope. The two most important constraints are:
- Time constraint: the stabilising action must occur within 30 days from the date of issue.
- Counterparty/participant constraint: the stabilising action must be taken with a person falling within the categories in section 274 of the SFA or with a sophisticated investor under section 275(2).
Although this Regulations extract does not reproduce sections 197, 198, 274, or 275, the structure indicates that the SFA provisions being exempted likely relate to prohibitions or restrictions on certain dealings that could be characterised as market manipulation or improper market conduct. The exemption is therefore designed to permit stabilisation while still preserving the broader integrity of the market conduct regime.
Section 4 (Revocation) revokes the earlier exemption regulation: the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 20) Regulations 2004 (G.N. No. S 286/2004). This suggests that the No. 23 Regulations supersede and replace the earlier instrument, likely to update the scope, definitions, or the legal basis for the exemption. For compliance and legal research, revocation is critical: practitioners must rely on the current instrument (No. 23) rather than the revoked No. 20.
How Is This Legislation Structured?
This Regulations is short and structured as a four-section instrument:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that determine the scope of “Notes” and “stabilising action”.
- Section 3 contains the substantive exemption from specified SFA provisions, subject to time and participant conditions.
- Section 4 revokes a prior related exemption regulation.
Because the Regulations are concise, much of the legal work for practitioners lies in mapping the exemption to the referenced SFA provisions (sections 197, 198, 274, and 275) and ensuring that the facts of the stabilisation program align with the defined terms.
Who Does This Legislation Apply To?
The exemption is directed at stabilising activity in relation to the defined notes. In substance, it applies to ABN AMRO Bank N.V. and its related corporations when they take stabilising actions as defined—buying (or offering/agreeing to buy) the specified notes to stabilise or maintain their market price.
However, section 3 adds an additional layer: the exemption applies only where the stabilising action is taken within 30 days from the date of issue and where the stabilising action involves counterparties that fall within section 274 of the SFA or are sophisticated investors under section 275(2). Accordingly, the practical applicability depends not only on who is performing the stabilisation, but also on the category of persons with whom the stabilising dealings occur.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore balances two competing regulatory objectives: (1) allowing legitimate market practices that support orderly trading during issuance, and (2) preventing conduct that could undermine market integrity. By exempting stabilising action from specific SFA provisions, the Regulations provides legal certainty to market participants engaged in underwriting and distribution activities.
For practitioners—particularly those advising issuers, arrangers, underwriters, or trading desks—the key value lies in the precision of the exemption. It is limited to a specific note issuance, a specific stabiliser, and a defined post-issuance period. This precision reduces ambiguity and helps compliance teams design stabilisation programs that remain within permitted boundaries.
From an enforcement and risk perspective, the exemption also implies that stabilising activity outside the defined parameters could expose participants to regulatory action under the SFA’s general market conduct rules. Therefore, counsel should treat the Regulations as a compliance checklist: confirm the identity of the notes, confirm the stabiliser, confirm the timing (within 30 days from issue), and confirm that the relevant counterparties fall within the SFA categories referenced in section 3.
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 statute metadata timeline context).
- Stabilising Act (as referenced in the statute metadata timeline context).
- Legislation Timeline (for version control and confirmation of the current instrument).
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. 23) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.