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 (Cap. 289)
- Power Used: Section 337(1) of the Securities and Futures Act
- Statutory Citation: SL 464/2005
- Commencement: 15 July 2005
- Status: Current version as at 27 March 2026 (per legislation database status)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (“Notes”, “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action
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. In essence, it creates a narrow exemption from certain market conduct prohibitions in the Securities and Futures Act for stabilising activity relating to a specific issuance of notes.
In plain terms, the Regulations recognise that, in some bond or note offerings, market participants may carry out limited buying (or offers to buy) shortly after issuance to help stabilise the trading price. Such activity can be controversial because it may resemble market manipulation. The Singapore framework therefore generally restricts conduct that could distort market prices. This instrument carves out an exception where stabilising action is conducted under defined conditions.
Notably, the exemption is not general. It is tied to a particular set of “Notes” (a defined 5-year fixed rate senior notes issuance by STATS ChipPAC Ltd.) and to stabilising action carried out by a specific dealer group (Credit Suisse First Boston (Singapore) Limited and its related corporations). It also limits the time window for the exemption to within 30 days from the date of issue.
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 15 July 2005. For practitioners, this matters because the exemption only becomes available from the commencement date and must be assessed against the timing of the relevant stabilising transactions.
Section 2 (Definitions) is central because it determines the scope of the exemption. The Regulations define two key 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.
These definitions are deliberately restrictive. If the instrument is not the specified STATS ChipPAC notes, or if the stabilising activity is not undertaken by the specified entity group, the exemption will not apply. Similarly, the conduct must be undertaken for the purpose of stabilising or maintaining market price—mere trading activity would not automatically qualify.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Securities and Futures 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 transactions involving 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.
Although the extract provided does not reproduce sections 197, 198, 274, or 275(2), the structure indicates the following practical effect: the general prohibitions in sections 197 and 198 are lifted for stabilising action, but only when the counterparty falls within the specified categories (persons under section 274 or sophisticated investors under section 275(2)). This is a common legislative technique—exempting conduct but still controlling the counterparties to reduce the risk of unfairness or market distortion.
For a practitioner, the key compliance tasks arising from Section 3 are:
- Identify the instrument: confirm the notes match the defined “Notes” (issuer, tenor, due date, and principal amount cap).
- Identify the actor: confirm the stabilising action is taken by Credit Suisse First Boston (Singapore) Limited or its related corporations.
- Confirm the purpose and nature of conduct: the action must be to stabilise or maintain market price, and must involve buying (or offers/agreements to buy).
- Confirm the timing: the stabilising action must occur within 30 days from the date of issue.
- Confirm the counterparty category: the exemption only covers stabilising action with persons in section 274 or sophisticated investors under section 275(2).
In effect, the exemption is a controlled “safe harbour” for a limited stabilisation period and limited counterparty types, rather than a blanket permission to engage in price-supporting trades.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that define the scope of the exemption (the specific “Notes” and the meaning of “stabilising action”).
- Section 3 establishes the exemption from specified Securities and Futures Act provisions (sections 197 and 198), subject to conditions on time, the nature of the stabilising action, and the relevant counterparty categories.
There are no additional parts or complex schedules in the extract. The legislative drafting is therefore “precision-based”: it relies on definitions and conditions rather than extensive procedural requirements.
Who Does This Legislation Apply To?
The Regulations apply to parties involved in stabilising action relating to the defined STATS ChipPAC notes, but the exemption is specifically framed around stabilising action taken by Credit Suisse First Boston (Singapore) Limited or its related corporations. Accordingly, the primary beneficiaries are the relevant dealer group and any entities acting within that group’s stabilisation programme.
However, the exemption’s effect is also conditioned by the counterparty category. Stabilising action must be taken within the 30-day post-issuance period and must involve either a person referred to in section 274 of the Securities and Futures Act or a sophisticated investor under section 275(2). This means that even where the stabilising actor and the notes match, the exemption may not apply if the stabilising trades are conducted with other types of counterparties.
Why Is This Legislation Important?
From a market conduct perspective, the Regulations illustrate how Singapore balances two competing policy objectives: (1) maintaining fair and orderly markets by restricting potentially manipulative trading, and (2) permitting limited stabilisation practices that can support orderly price formation in the immediate aftermath of a new issuance.
For practitioners advising issuers, arrangers, dealers, or compliance teams, the exemption is important because it provides a legally recognised basis to conduct stabilising trades without breaching the general prohibitions in sections 197 and 198—provided the strict conditions are met. In practice, stabilisation programmes are often time-sensitive and operationally complex; having a clear statutory exemption reduces legal uncertainty and supports structured compliance.
The narrowness of the exemption is equally significant. Because it is tied to a specific note issuance and a specific dealer group, counsel must be careful not to assume that stabilisation activity for other instruments or by other entities will be covered. Additionally, the counterparty limitation (section 274 persons or sophisticated investors) requires careful trade documentation and investor classification checks.
Finally, the 30-day limitation is a critical compliance boundary. Stabilising activity outside the permitted window could expose participants to regulatory risk if the general prohibitions apply. Therefore, transaction monitoring systems and internal controls should be aligned to the issuance date and the stabilisation programme timeline.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, the provisions referenced by the Regulations: sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act — referenced in the legislation metadata timeline (contextual, though not directly operative in the extract).
- Stabilising Act — referenced in the legislation metadata timeline (contextual).
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.