Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 25) Regulations 2005
- Act Code: SFA2001-S461-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA), specifically section 337(1)
- Commencement: 14 July 2005
- Legislation Status: Current version as at 27 March 2026 (per provided extract)
- Regulation Number: SL 461/2005
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Definitions (including “Notes” and “stabilising action”)
- Regulation 3: Exemption from sections 197 and 198 of the SFA for specified stabilising action
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Maker: HENG SWEE KEAT, Managing Director, MAS
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 25) Regulations 2005 (“Stabilising Action (Notes) Regulations”) is a targeted regulatory instrument. In plain terms, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (SFA) for a specific kind of activity—“stabilising action”—carried out in relation to a particular issuance of notes.
Stabilising action is a common feature of securities markets, particularly around the time of issuance. Market participants may take steps to support or maintain the trading price of newly issued instruments to reduce volatility and facilitate orderly trading. However, stabilisation can overlap with conduct that market conduct legislation typically seeks to regulate—such as improper trading or misleading market practices. The SFA therefore contains provisions that restrict certain behaviours, and this subsidiary legislation carves out a controlled exception.
Importantly, this exemption is not general. It is limited by (i) the identity of the notes, (ii) the identity of the stabilising actor, and (iii) the time window during which stabilisation may occur. The Regulations thus reflect a policy balance: allowing stabilisation where it is structured and limited, while preserving the integrity of the market by ensuring the exemption is not open-ended.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations come into operation on 14 July 2005. For practitioners, this matters for determining whether any stabilising activity falls within the legal framework at the relevant time.
Regulation 2 (Definitions) is the heart of the instrument because it defines the scope of what is being exempted. Two defined terms are crucial:
(a) “Notes” are defined very specifically as the 10-year fixed rate notes due July 2015 issued by PT Bank Niaga Tbk for a principal amount of up to US$150 million. This definition means the exemption is tied to a particular issuance and not to other notes, even if they are similar in nature.
(b) “stabilising action” is defined as 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 equally restrictive: it identifies the stabilising entity and the permitted conduct (buying or offering/agreeing to buy), and it links the purpose of the action to stabilisation/price maintenance.
Regulation 3 (Exemption) provides the operative legal effect. It states that sections 197 and 198 of the SFA 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 with either:
- (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.
In practical terms, Regulation 3 creates a time-limited and counterparty-limited exemption. The stabilising activity must occur within the first 30 days from the notes’ issue date, and it must be conducted with specified categories of persons—either those captured by section 274 or sophisticated investors under section 275(2). This is a key compliance point: stabilisation outside the 30-day window, or stabilisation involving counterparties outside the defined categories, would likely fall outside the exemption and therefore remain subject to sections 197 and 198.
Although the extract does not reproduce sections 197 and 198 themselves, the structure indicates that those sections impose market conduct restrictions that would otherwise apply to the relevant trading or dealing activities. The exemption therefore functions as a legal “permission” to engage in stabilising dealing without breaching the otherwise applicable prohibitions, provided the conditions are met.
How Is This Legislation Structured?
The Regulations are concise and consist of an enacting formula and three substantive regulations:
- Regulation 1: Citation and commencement (procedural/temporal entry into force).
- Regulation 2: Definitions (substantive scope-setting, defining the “Notes” and “stabilising action”).
- Regulation 3: Exemption (the operative clause removing the application of specified SFA provisions to specified stabilising action within a defined time and with defined counterparties).
From a practitioner’s perspective, the Regulations are best read as a “scope and conditions” instrument. Regulation 2 tells you what transactions and actors are covered; Regulation 3 tells you when and with whom the exemption applies, and which SFA provisions are disapplied.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action taken by Citigroup Global Markets Limited or its related corporations. Therefore, the primary regulated party is the stabilising dealer/market participant conducting the stabilisation. However, the exemption is also relevant to other parties involved in the issuance and trading of the defined notes—particularly those advising on compliance, documentation, and execution strategy—because the exemption conditions affect how stabilisation may be structured.
In addition, Regulation 3 limits the exemption by reference to counterparties: stabilising action must be taken with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). This means that even if the stabilising dealer and the notes match the definitions, the exemption may not apply if the stabilising dealing is conducted with an ineligible counterparty category.
Why Is This Legislation Important?
This Regulations matters because it provides legal certainty for a specific stabilisation programme. Without an exemption, stabilising trading could be scrutinised under market conduct provisions that aim to prevent manipulation or improper influence on market prices. By disapplying sections 197 and 198 for the defined stabilising action, the Regulations reduce regulatory risk for the stabilising dealer and facilitate orderly market functioning during the early trading period after issuance.
For practitioners, the most significant value lies in its precision. The exemption is not a blanket permission for any stabilisation in any notes. Instead, it is tightly bounded by: (i) the exact notes (issuer, maturity, and size), (ii) the exact stabilising actor (Citigroup Global Markets Limited and related corporations), (iii) the conduct (buying or offering/agreeing to buy), (iv) the time limit (within 30 days from issue), and (v) the counterparty categories (section 274 persons or sophisticated investors).
From an enforcement and compliance standpoint, these boundaries create clear “go/no-go” criteria. A compliance officer or legal counsel should therefore treat the Regulations as a checklist for stabilisation activities: confirm the notes match the definition; confirm the stabilising entity is within the defined group; confirm the trades occur within the 30-day window; and confirm counterparties fall within the permitted categories. Any deviation could mean the exemption does not apply, exposing the stabilising activity to the full force of sections 197 and 198 of the SFA.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular:
- Section 337(1) (authorising power for MAS to make these Regulations)
- Sections 197 and 198 (market conduct provisions disapplied by Regulation 3)
- Section 274 (counterparty category referenced in Regulation 3)
- Section 275(2) (definition of “sophisticated investor” referenced in Regulation 3)
- Futures Act (referenced in the provided metadata as related legislation)
- Stabilising Act (referenced in the provided metadata as related legislation)
- Timeline (referenced in the provided metadata as a legislative versioning resource)
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. 25) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.