Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 27) Regulations 2005
- Act Code: SFA2001-S466-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Enacting body: Monetary Authority of Singapore (MAS)
- Commencement: 15 July 2005
- Legislative status: Current version as at 27 Mar 2026 (per the provided extract)
- Key provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulation number: SL 466/2005
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 27) Regulations 2005 is a narrow, transaction-specific set of exemptions issued by MAS under the Securities and Futures Act (SFA). In plain terms, it allows certain “stabilising actions” to be taken in relation to a particular issuance of notes without triggering specific market conduct prohibitions that would otherwise apply.
In securities markets, stabilisation is a practice commonly used during the initial trading period after an issuance. A stabilising party may buy (or offer to buy) the relevant instruments in order to support or maintain their market price. While stabilisation can be legitimate, it can also resemble conduct that market conduct rules seek to prevent—such as manipulative or misleading trading. The SFA therefore generally restricts certain dealing activities, but it also provides a framework for exemptions where stabilisation is conducted in a controlled and limited manner.
This particular Regulations set out an exemption for stabilising action in respect of “Notes” issued by KT Corporation in July 2005 under a medium term note programme. The exemption is time-limited (within 30 days from the date of issue) and limited to stabilising action carried out by specified persons (including UBS Limited and its related corporations, as defined). It also restricts who may be involved, by reference to categories in the SFA (section 274) and by reference to “sophisticated investors” (section 275(2)).
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal citation and states that the Regulations come into operation on 15 July 2005. For practitioners, this matters because the exemption only applies to stabilising action taken after the Regulations are in force (and, in any event, within the 30-day window specified in section 3).
Section 2 (Definitions) is critical because it defines both the instrument and the conduct being exempted.
“Notes” are defined as the US$ fixed rate notes issued in July 2005 by KT Corporation for a principal amount of up to US$400 million, issued pursuant to the US$2,000,000,000 Medium Term Note Programme. This definition is highly specific: it ties the exemption to a particular issuer, currency, timing, and programme. As a result, the exemption is not a general stabilisation relief for all notes; it is confined to these defined notes.
“Stabilising action” is defined as an action taken in Singapore or elsewhere by UBS 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 does two important things:
- It identifies the stabilising party: UBS Limited or its related corporations.
- It captures not only actual purchases, but also offers or agreements to buy, which is relevant to how stabilisation strategies are documented and executed.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Act shall not apply to any stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with the stabilising action being 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.
From a practitioner’s perspective, the exemption is best understood as a conditional “carve-out” from two SFA market conduct provisions. Although the extract does not reproduce sections 197 and 198, the structure indicates that those sections contain prohibitions that would otherwise apply to certain dealing activities. Section 3 relieves liability for stabilising action, but only if the stabilising action is conducted:
- In respect of the defined Notes (KT Corporation July 2005 notes under the specified programme);
- Within the specified period (30 days from the date of issue);
- By the defined stabilising actor (UBS Limited or its related corporations, as captured in the definition of “stabilising action”); and
- With counterparties that fall within the SFA’s specified categories (section 274 persons) or with sophisticated investors.
The counterparty condition is particularly important for compliance. Even if the stabilising activity is otherwise consistent with the definition, the exemption may not apply if the stabilising action is undertaken with the wrong type of counterparty. In practice, counsel should ensure that dealing records, trade confirmations, and account opening documentation support that counterparties meet the relevant SFA categories.
How Is This Legislation Structured?
This Regulations is structured in a straightforward manner, reflecting its limited scope:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that narrow the exemption to specific instruments (“Notes”) and specific conduct (“stabilising action”).
- Section 3 contains the exemption from specified SFA provisions (sections 197 and 198) subject to time and counterparty conditions.
There are no additional parts or complex schedules in the provided extract. The Regulations therefore functions as a targeted relief instrument rather than a comprehensive market conduct regime.
Who Does This Legislation Apply To?
The exemption is directed at parties that conduct stabilising action in relation to the defined KT Corporation notes. While the Regulations does not list a broad class of regulated persons in the way some market conduct instruments do, its definitions effectively limit the relevant actors. “Stabilising action” is defined as action taken by UBS Limited or its related corporations, which means that the exemption is primarily relevant to the UBS stabilisation group and any entities acting on its behalf within the scope of “related corporations”.
In addition, the exemption is conditional on the stabilising action being taken with either (i) a person referred to in section 274 of the SFA or (ii) a sophisticated investor under section 275(2). This means that the exemption’s practical availability depends not only on the stabiliser’s identity, but also on the counterparty profile of the trades or arrangements used to implement stabilisation.
Why Is This Legislation Important?
Although the Regulations is short, it is significant because it illustrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing manipulative or improper trading practices, and (2) allowing legitimate market practices such as stabilisation during an issuance period. Stabilisation can improve liquidity and reduce volatility immediately after issuance, but it must be tightly controlled to avoid undermining market integrity.
By carving out stabilising action from sections 197 and 198 of the SFA, MAS provides legal certainty to the stabilising party, enabling it to conduct stabilisation within a defined window and with defined counterparties. For practitioners, this reduces the risk of enforcement exposure for trades that are part of a bona fide stabilisation programme, provided the conditions are met.
From a compliance and documentation standpoint, the Regulations creates clear “checkpoints” for counsel and compliance teams:
- Instrument scope: confirm the notes fall within the definition (issuer, programme, currency, timing, and principal amount).
- Time scope: ensure stabilisation occurs within 30 days from the date of issue.
- Actor scope: confirm the stabilising activity is undertaken by UBS Limited or its related corporations.
- Counterparty scope: ensure counterparties are within section 274 categories or are sophisticated investors under section 275(2).
In addition, because “stabilising action” includes offers or agreements to buy, legal teams should ensure that any pre-trade arrangements, conditional orders, or contractual commitments are captured within the compliance framework and can be evidenced as part of stabilisation rather than speculative dealing.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1)
- Futures Act (referenced in the provided metadata)
- Stabilising Act (referenced in the provided metadata)
- Timeline (legislation timeline reference in the provided metadata)
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. 27) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.