Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 26) Regulations 2005
- Act Code: SFA2001-S464-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Legislative citation: SL 464/2005
- Date of making: 13 July 2005
- Commencement: 15 July 2005
- Status: Current version as at 27 March 2026
- Key provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulatory focus: Exemption from market conduct prohibitions for stabilising actions in relation to specified notes
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 (Notes) Regulations”) is a targeted exemption regulation made under the Securities and Futures Act (SFA). In plain terms, it allows certain market participants to take “stabilising action” in relation to a specific issuance of notes without being caught by particular SFA prohibitions on market conduct.
Stabilising action is a practice commonly used in capital markets to help manage short-term price volatility after a new debt security is issued. The idea is that, for a limited period, a stabilising manager may buy (or offer to buy) the relevant notes to support the market price. However, because such conduct can resemble prohibited market manipulation, securities laws typically restrict it. This regulation creates a narrow carve-out so that stabilising conduct—if it fits the defined parameters—does not trigger the relevant prohibitions.
Importantly, the exemption is not general. It is tied to (i) a defined set of “Notes” (a particular 5-year fixed rate senior notes issuance by STATS ChipPAC Ltd.), (ii) a defined stabilising actor (Credit Suisse First Boston (Singapore) Limited and related corporations), and (iii) a limited time window (within 30 days from the date of issue). This makes the regulation highly practical for practitioners advising on a specific bond/notes transaction and the compliance steps needed to rely on the exemption.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal title and confirms that the Regulations came into operation on 15 July 2005. For practitioners, this matters when assessing whether stabilising activity occurred within the legal framework of the exemption.
Section 2 (Definitions) is the core interpretive section. It defines two terms that determine the scope of the exemption:
- “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.
These definitions are legally significant because they narrow the exemption to a particular instrument and a particular stabilising group. If an entity outside the defined stabilising actor undertakes similar activity, or if the instrument is not within the defined “Notes,” the exemption would not apply. Similarly, the purpose element—stabilising or maintaining market price—must align with the definition.
Section 3 (Exemption) is the operative provision. 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, provided the stabilising action is 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, Section 3 creates a conditional exemption from the SFA’s market conduct prohibitions for stabilising activity, but only when the stabilising trades are conducted with the specified categories of counterparties. This is a common regulatory design: stabilisation is permitted, but only in a controlled environment involving investors who are presumed to have the sophistication to understand the nature and risks of such transactions.
For a practitioner, the key compliance questions are therefore:
- Timing: Was the stabilising action taken within 30 days from the date of issue of the Notes?
- Instrument: Are the securities exactly the defined “Notes” (5-year fixed rate senior notes due July 2010; issuer STATS ChipPAC Ltd.; principal amount up to US$150 million)?
- Actor: Was the stabilising action taken by Credit Suisse First Boston (Singapore) Limited or its related corporations?
- Counterparty category: Were the trades/offers/agreements to buy made with a person under section 274 or with a sophisticated investor under section 275(2)?
Because the exemption is expressly tied to Sections 197 and 198 of the SFA, counsel should also confirm what those sections prohibit (typically, market manipulation or improper dealing conduct). The exemption’s effect is to remove the statutory prohibition risk for stabilising action that meets the conditions, rather than to authorise stabilisation in a vacuum.
How Is This Legislation Structured?
The Regulations are short and structured as a three-section instrument:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of “Notes” and “stabilising action.”
- Section 3 contains the exemption from specified SFA provisions, including the 30-day limit and the counterparty categories.
There are no additional parts or schedules in the extract provided. The legislative technique is to rely on cross-references to the SFA (Sections 197, 198, 274, and 275(2)) and to define the transaction-specific elements directly in the Regulations.
Who Does This Legislation Apply To?
Although the exemption is framed as an exemption from the application of SFA provisions, it effectively applies to stabilising action taken by the defined stabilising actor—Credit Suisse First Boston (Singapore) Limited and its related corporations—in relation to the defined STATS ChipPAC Ltd. notes issuance.
In addition, the exemption is conditional on the stabilising action being taken with counterparties who fall within section 274 of the SFA or who are sophisticated investors under section 275(2). Therefore, the practical applicability extends to the stabilising manager and the transaction counterparties: if counterparties do not meet the statutory categories, the exemption would not protect the stabilising conduct from Sections 197 and 198.
Why Is This Legislation Important?
This regulation is important because it addresses a recurring tension in securities regulation: stabilisation can be commercially beneficial and market-practice aligned, but it may also be perceived as interfering with price formation. By carving out stabilising action from specific prohibitions, the law enables legitimate stabilisation while maintaining the integrity of market conduct rules.
For practitioners, the value of this instrument lies in its transaction-specific precision. It is not a generic stabilisation regime; it is a targeted exemption for a particular notes issuance. That means legal advice must be anchored to the exact definitions and conditions. In deal documentation and compliance checklists, counsel should map the stabilisation plan to the statutory elements: the identity of the notes, the stabilising manager, the timing window, and the investor category of counterparties.
From an enforcement perspective, the exemption reduces regulatory risk for stabilising activity that stays within the statutory boundaries. Conversely, it highlights potential exposure if stabilisation is conducted outside those boundaries—such as exceeding the 30-day period, trading with non-qualifying counterparties, or involving a stabilising actor not within the definition. In disputes or regulatory inquiries, the existence of a narrow exemption can be decisive: the question becomes whether the conduct fits the exemption precisely.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Sections 197 and 198 (market conduct prohibitions from which the exemption applies)
- Section 274 (counterparty category referenced in the exemption)
- Section 275(2) (definition of “sophisticated investor” referenced in the exemption)
- Section 337(1) (the enabling provision for making exemption regulations)
- Futures Act (referenced in the statute metadata as part of the broader legislative environment)
- Stabilising Act (referenced in the statute metadata as part of the broader legislative environment)
- Timeline (legislative versioning context)
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.