Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 29) Regulations 2005
- Act Code: SFA2001-S474-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Legislative Citation: SL 474/2005
- Commencement: 20 July 2005
- Status: Current version as at 27 March 2026
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory Authority: Monetary Authority of Singapore (MAS)
- Enacting Formula (summary): Made by MAS under powers in section 337(1) of the Securities and Futures Act
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 29) Regulations 2005 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption from certain market conduct rules under the Securities and Futures Act (SFA). In plain terms, it allows a specific type of “market stabilisation” trading activity to occur in relation to a particular issuance of notes, without triggering the prohibitions that would otherwise apply.
Market stabilisation is a common feature of certain debt and securities offerings. During the initial period after issuance, stabilising participants may buy (or offer to buy) securities to help maintain orderly trading conditions and reduce excessive price volatility. However, stabilisation can also raise concerns about market manipulation. Singapore’s market conduct framework therefore generally restricts stabilising conduct unless it falls within a permitted exemption.
This legislation is narrow in scope. It does not create a general stabilisation regime for all securities. Instead, it grants an exemption for stabilising action taken in respect of a defined set of “Notes” (a specific US$ fixed rate notes issuance by PCCW-HKT Capital No. 3 Limited, guaranteed by PCCW-HKT Telephone Limited) within a defined time window (30 days from the date of issue). It also limits the stabilising participant to The Hongkong and Shanghai Banking Corporation Limited (and its related corporations) as defined in the Regulations’ definition of “stabilising action”.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal title and states that the Regulations come into operation on 20 July 2005. For practitioners, this matters when assessing whether stabilising trades were conducted within the legal framework applicable at the relevant time.
Section 2 (Definitions) is central because the exemption turns entirely on whether the relevant instrument and conduct fall within the defined terms. The Regulations define:
- “Notes”: the 10-year US$ fixed rate notes due July 2015 issued by PCCW-HKT Capital No. 3 Limited for a principal amount of up to US$1 billion, irrevocably and unconditionally guaranteed by PCCW-HKT Telephone Limited.
- “stabilising action”: an action taken in Singapore or elsewhere by The Hongkong and Shanghai Banking Corporation 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 precise. If the instrument is not the specified PCCW-HKT notes, or if the stabilising participant is not the specified bank (or its related corporations), the exemption will not apply. Similarly, “stabilising action” is defined by purpose (stabilise or maintain market price), not merely by the act of buying.
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 respect to stabilising action taken by:
- (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 carves out a time-limited permission for stabilising trades in the specified notes. The exemption is conditional on both (i) the timing (within 30 days from issue) and (ii) the category of counterparty/participant (persons in section 274 or sophisticated investors under section 275(2)).
Although the extract does not reproduce Sections 197 and 198 of the SFA, the structure indicates that those provisions are the general prohibitions that would otherwise restrict or penalise certain market conduct behaviour. The Regulations therefore operate as a narrow “safe harbour” for stabilisation conduct, reducing compliance uncertainty for the relevant issuance and stabilisation programme.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three sections:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions of “Notes” and “stabilising action”. These definitions effectively determine the scope of the exemption.
- Section 3 contains the exemption from specified SFA provisions (Sections 197 and 198), subject to the 30-day period and the relevant participant categories.
Notably, the Regulations do not include detailed procedural requirements (such as reporting, disclosure, or limits on quantities) within the text provided. In practice, however, stabilisation programmes typically require compliance with broader market conduct rules, offering documents, and any applicable MAS guidance or conditions attached to the stabilisation arrangement. Lawyers should therefore read the exemption together with the underlying SFA provisions and any related regulatory framework governing market conduct and exemptions.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to a specific issuance of notes. The stabilising conduct must be taken by The Hongkong and Shanghai Banking Corporation Limited or its related corporations (as captured in the definition of “stabilising action”), and it must relate to the defined “Notes”.
In addition, Section 3 limits the exemption’s application by reference to persons under section 274 of the SFA and sophisticated investors under section 275(2). This means that even where stabilising trades are made in the correct notes and within the correct 30-day window, the exemption may still fail if the stabilising action does not involve the relevant categories of persons contemplated by the SFA.
For practitioners, this creates a compliance checklist: confirm (1) the instrument is the specified PCCW-HKT notes; (2) the stabilising participant is the specified bank or its related corporation; (3) the trades occur within 30 days from the date of issue; and (4) the relevant counterparty/participant status aligns with section 274 or sophisticated investor status under section 275(2).
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct regime balances two competing objectives: (i) allowing legitimate stabilisation to support orderly markets during issuance, and (ii) preventing stabilisation from becoming a vehicle for manipulation or misleading price formation. By granting a targeted exemption, MAS permits stabilising activity while still keeping the general prohibitions in place for conduct outside the exemption’s narrow boundaries.
For legal practitioners advising issuers, underwriters, and trading desks, the value lies in certainty. Without an exemption, stabilising trades could be treated as prohibited market conduct under the SFA, exposing parties to regulatory action and potential civil or administrative consequences. The Regulations therefore function as a legal “permission slip” for a particular transaction and stabilisation period.
From a transaction documentation perspective, the exemption also affects how counsel should structure stabilisation arrangements. Lawyers should ensure that the stabilisation programme is aligned with the defined “Notes” and that trading activity is monitored to remain within the 30-day window. They should also verify the participant categories under the SFA (section 274 persons and sophisticated investors) and ensure that internal compliance controls track these requirements.
Finally, the Regulations’ narrow scope underscores a broader lesson: exemptions in Singapore market conduct law are often transaction-specific and tightly drafted. Counsel should not assume that a stabilisation exemption for one issuance automatically extends to other issuances, other note terms, or other stabilising participants.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — notably Sections 197, 198, 274, 275(2), and the exemption-making power in section 337(1).
- Stabilising Act (as referenced in the provided metadata)
- Futures Act (as referenced in the provided metadata)
- Timeline (legislation timeline reference in the platform interface)
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. 29) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.