Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 3) Regulations 2006
- Act Code: SFA2001-S28-2006
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Citation: SL 28/2006
- Commencement: 18 January 2006
- Status: Current version as at 27 March 2026 (per legislation timeline)
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 3) Regulations 2006 is a targeted regulatory instrument made under the Securities and Futures Act (“SFA”). In plain terms, it creates a limited exemption from certain market conduct rules when stabilising activity is carried out in relation to a specific set of debt securities—namely, particular “Notes” issued by JGSH Philippines, Limited and guaranteed by JG Summit Holdings, Inc.
Stabilising action is a familiar concept in securities markets. During or shortly after an issuance, market participants may take steps to support or maintain the trading price of newly issued securities. While such conduct can be legitimate and intended to reduce volatility, it can also raise concerns about market manipulation. The SFA therefore contains provisions restricting or regulating stabilisation and related dealings.
This 2006 Regulations instrument narrows the regulatory impact by exempting stabilising actions taken in respect of the specified Notes, but only if the stabilising activity occurs within a defined time window and is undertaken by specified categories of persons (including certain institutional investors and high-value principal purchasers). The exemption is therefore not a general permission to stabilise; it is a carefully bounded carve-out for a particular transaction and set of participants.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and states that the Regulations come into operation on 18 January 2006. For practitioners, this matters because the exemption is time-bound and tied to the issuance date of the Notes. The commencement date confirms the regulatory framework applicable at the relevant time.
2. Definitions (Regulation 2)
Regulation 2 is crucial because the exemption depends entirely on the defined scope of “Notes” and “stabilising action.” The Regulations define:
- “Notes” as the 7-year fixed rate guaranteed notes due January 2013 issued by JGSH Philippines, Limited up to US$300 million, unconditionally and irrevocably guaranteed by JG Summit Holdings, Inc.
- “securities” by reference to the SFA definition in section 239(1).
- “stabilising action” as an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) 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 practice points follow from these definitions. First, the exemption is transaction-specific: it applies only to the defined Notes. Second, the stabilising actor is person-specific: it is limited to Credit Suisse First Boston (Europe) Limited and its related corporations. This means that stabilising activity by other entities would not fall within the definition of “stabilising action” for the purposes of the exemption.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
The heart of the Regulations is Regulation 3. It provides 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 of the Notes, provided the stabilising action is taken with one of the following categories of counterparties/participants:
- (a) an institutional investor
- (b) a “relevant person” as defined in section 275(2) of the SFA
- (c) a person who acquires the Notes as principal, where the consideration for the acquisition is not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
Time limitation: The exemption is expressly limited to stabilising action taken within 30 days from the date of issue. This is a strict compliance boundary. For issuers, arrangers, and trading desks, it means that any stabilising purchases or offers to buy outside the 30-day window would fall back into the general SFA regime (including the application of sections 197 and 198).
Counterparty limitation: The exemption is also limited by who the stabilising action is “with.” In other words, the exemption is not merely about the stabilising actor; it is also about the category of person involved in the relevant dealing. This is a common regulatory technique: it allows stabilisation only in controlled circumstances and with counterparties that are presumed to have the sophistication and risk profile appropriate for such activity.
High-value principal acquisition threshold: For principal purchasers, the Regulations impose a minimum consideration threshold of $200,000 per transaction (or equivalent). The threshold is flexible as to payment form: it may be paid in cash or by exchange of securities or other assets. Practically, this requires careful transaction documentation to show that the consideration meets the minimum and is attributable to “each transaction.”
Interaction with the SFA: While the extract does not reproduce sections 197 and 198, the exemption’s drafting indicates that those provisions contain prohibitions or restrictions that would otherwise apply to stabilising action. The Regulations therefore operate as a statutory carve-out: where the conditions are met, the stabilising action is treated as not subject to the specified SFA provisions.
How Is This Legislation Structured?
The Regulations are structured in a short, functional format typical of targeted exemptions:
- Regulation 1 (Citation and commencement): establishes the name and effective date.
- Regulation 2 (Definitions): defines the key terms that determine the scope of the exemption—especially “Notes” and “stabilising action.”
- Regulation 3 (Exemption): sets out the operative exemption, including the time limit (30 days from issue) and the permitted categories of persons involved in the stabilising dealings.
There are no additional parts or complex schedules in the extract provided. The entire legal effect is concentrated in Regulation 3, supported by the definitional precision in Regulation 2.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and are therefore part of the broader Singapore market conduct framework, their practical application is narrower. The exemption is relevant primarily to:
- Credit Suisse First Boston (Europe) Limited and its related corporations, because they are the only entities captured by the definition of “stabilising action.”
- Counterparties to stabilising dealings, because Regulation 3 limits the exemption to stabilising actions taken with institutional investors, “relevant persons,” or principal acquirers meeting the $200,000 threshold.
- Market participants involved in the issuance and post-issuance period (such as arrangers, dealers, and compliance teams), because they must ensure that any stabilising activity aligns with the defined scope and timing.
In addition, the exemption is tied to a specific instrument: the defined Notes issued by JGSH Philippines, Limited. Therefore, the Regulations do not provide a general stabilisation exemption for other issuances, other note terms, or other guarantors.
Why Is This Legislation Important?
This Regulations instrument is important because it demonstrates how Singapore’s market conduct regime balances two competing policy objectives: (1) allowing legitimate price-stabilisation practices that can support orderly markets during issuance, and (2) preventing or limiting conduct that could be characterised as manipulation or improper market support.
For practitioners, the key significance lies in the conditional nature of the exemption. The exemption is not automatic. It depends on meeting all of the following: (i) the stabilising activity must relate to the defined Notes; (ii) the stabilising action must be taken by the defined stabilising actor (Credit Suisse First Boston (Europe) Limited or related corporations); (iii) the action must occur within 30 days from the date of issue; and (iv) the dealing must be with one of the permitted categories of persons, including principal acquirers meeting the $200,000 per transaction threshold.
From an enforcement and compliance perspective, these conditions create clear audit trails. Dealers and compliance officers should ensure that trade records, counterparty classifications, and consideration amounts are capable of demonstrating eligibility for the exemption. Where any condition is not satisfied—such as stabilising activity outside the 30-day period or dealings with counterparties outside the permitted categories—the exemption would not apply, and the underlying SFA provisions (sections 197 and 198) would likely govern the conduct.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 239(1), 275(2), and the enabling provision in section 337(1).
- Stabilising Act — referenced in the statute metadata (for contextual understanding of stabilisation concepts, if applicable in the broader legislative framework).
- Futures Act — referenced in the statute metadata (for contextual understanding of market conduct regulation across instruments).
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. 3) Regulations 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.