Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 26) Regulations 2005
- Legislation Type: Subsidiary legislation (SL)
- Act Code: SFA2001-S464-2005
- Legislative Instrument Number: SL 464/2005
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 15 July 2005
- Key Provisions (from extract):
- 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
- Status: Current version as at 27 March 2026 (per provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 26) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument made by MAS under the Securities and Futures Act (SFA). In plain terms, it creates a narrow exemption that permits certain market participants to take “stabilising action” in relation to a specific issuance of notes, without being caught by the SFA’s market conduct prohibitions.
The legislation is best understood against the background of Singapore’s market integrity framework. The SFA contains provisions designed to prevent manipulative or misleading conduct in securities markets, including restrictions on certain dealings that could artificially influence price or trading conditions. However, stabilisation practices are sometimes used in capital markets to reduce volatility immediately after issuance. The Regulations therefore carve out a controlled exception for stabilisation activity, but only for a defined set of notes, a defined stabiliser, and a limited time window.
Notably, this is not a general stabilisation regime for all securities. The Regulations are issuance-specific: they define “Notes” as the 5-year fixed rate senior notes due July 2010 issued by STATS ChipPAC Ltd. for up to US$150 million, and they define “stabilising action” as actions taken by Credit Suisse First Boston (Singapore) Limited (and related corporations) to buy or offer to buy those notes to stabilise or maintain their market price in Singapore or elsewhere.
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the short title and states that the Regulations come into operation on 15 July 2005. For practitioners, the commencement date matters because the exemption in Section 3 is time-bound (it applies only to stabilising action within 30 days from the date of issue of the notes). While Section 1 does not itself define the stabilisation period, it establishes when the exemption framework is effective.
2. Definitions: “Notes” and “stabilising action” (Section 2)
Section 2 is the core scoping mechanism. It defines two critical terms:
- “Notes” means the 5-year fixed rate senior notes due July 2010 issued by STATS ChipPAC Ltd. for a principal amount of up to US$150 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Credit Suisse First Boston (Singapore) 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.
Two practical points flow from these definitions. First, the exemption is limited to stabilisation in relation to a specific instrument (the STATS ChipPAC notes). Second, the stabiliser is limited to a specific entity and its related corporations. This means that other dealers, arrangers, or market makers cannot rely on this exemption unless they fall within the defined stabiliser group.
3. The exemption from SFA sections 197 and 198 (Section 3)
Section 3 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 of the Notes, with respect to stabilising action taken for 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, Section 3 provides that the SFA’s prohibitions in sections 197 and 198—whatever their exact wording—are suspended for the specified stabilising conduct, but only when the stabilising action is directed to transactions involving the specified categories of investors. The Regulations therefore do not create a blanket exemption for all market participants and all counterparties; they instead tie the exemption to the investor categories recognised in the SFA.
4. Time limitation and geographic reach
The exemption is limited to stabilising action within 30 days from the date of issue of the Notes. This is a common feature of stabilisation regimes: the market is most vulnerable to post-issuance volatility, and regulators typically permit stabilisation only during a short initial period. Additionally, the definition of stabilising action expressly covers actions taken in Singapore or elsewhere, and stabilisation is described as maintaining the market price in Singapore or elsewhere. This indicates that the exemption is intended to accommodate cross-border trading and execution arrangements.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Section 1 (Citation and commencement) sets the legal identity of the instrument and its effective date.
- Section 2 (Definitions) establishes the boundaries of the exemption by defining the specific “Notes” and the specific “stabilising action” conduct and actors covered.
- Section 3 (Exemption) applies the exemption by disapplying SFA sections 197 and 198 to the defined stabilising action, but only within a defined time period and only in relation to transactions involving persons in section 274 or sophisticated investors under section 275(2).
From a practitioner’s perspective, the structure is deliberately minimal: it is a bespoke exemption instrument rather than a comprehensive market conduct code. Most of the substantive market conduct framework is located in the SFA itself; these Regulations operate as a targeted “switch-off” for particular prohibitions in particular circumstances.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action taken by Credit Suisse First Boston (Singapore) Limited and its related corporations in respect of the defined STATS ChipPAC notes. Accordingly, the primary beneficiaries are the stabilising dealer(s) and their corporate group entities that may engage in stabilisation activities.
However, the exemption is not only about the stabiliser; it also depends on the counterparty category for the stabilising action. Section 3 limits the exemption to stabilising action taken within 30 days from issue where the stabilising action is taken with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). Therefore, even if the stabiliser is within the defined group, the exemption may not be available if the stabilising dealings involve other investor categories not captured by those SFA provisions.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct rules can accommodate legitimate market practices while maintaining integrity. Stabilisation can help reduce disorderly trading and price volatility immediately after issuance. Without an exemption, stabilisation activities that involve buying or offering to buy securities could be misconstrued as prohibited market manipulation or improper conduct under the SFA.
For legal practitioners advising issuers, arrangers, or dealers, the key value of the Regulations lies in its precision. It is not enough to know that stabilisation is generally permitted; counsel must confirm that:
- the instrument is the exact “Notes” defined in Section 2;
- the stabiliser is the exact entity (Credit Suisse First Boston (Singapore) Limited) or its related corporations;
- the stabilisation occurs within the 30-day post-issue window; and
- the stabilising dealings are with the relevant investor categories (section 274 persons or sophisticated investors under section 275(2)).
From an enforcement and compliance standpoint, the exemption’s narrow drafting reduces regulatory ambiguity but increases the need for careful documentation. Market participants should ensure that their stabilisation programme, trade records, and investor eligibility checks align with the statutory definitions and conditions. Where stabilisation is executed through multiple desks or entities, the “related corporations” concept may require corporate structure analysis to confirm eligibility.
Related Legislation
- Securities and Futures Act (Cap. 289) (including sections 197, 198, 274, and 275(2))
- Futures Act (listed in provided metadata as related legislation)
- Stabilising Act (listed in provided metadata as related legislation)
- Legislation Timeline / MAS legislation timeline (for version control and amendments tracking)
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. 26) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.