Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 30) Regulations 2004
- Act Code: SFA2001-S409-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (specifically, section 337(1))
- Citation: SL 409/2004
- Commencement: 5 July 2004
- Enacting authority: Monetary Authority of Singapore (MAS)
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Status: Current version as at 27 Mar 2026 (per the legislation record)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 30) Regulations 2004 is a narrow, targeted regulatory instrument. In plain terms, it creates a specific exemption from certain market conduct rules in the Securities and Futures Act (SFA) for a particular kind of trading activity—namely, “stabilising action”—carried out in relation to a defined set of debt securities (“Notes”).
Stabilising action is a practice commonly used in securities offerings. After a new issue, a stabilising manager may buy (or offer to buy) the relevant securities to help maintain orderly market conditions and reduce excessive price volatility. However, stabilisation can overlap with conduct that market conduct legislation seeks to regulate—such as manipulation or misleading market behaviour. This Regulations therefore balances two policy goals: allowing legitimate stabilisation while preserving the integrity of the market.
What makes these Regulations distinctive is their specificity. They do not provide a general stabilisation regime for all securities. Instead, they define the Notes (a particular Export-Import Bank of India issuance) and define stabilising action as being taken by a particular stabilising party (Deutsche Bank AG London and related corporations). The exemption is also time-limited (within 30 days from the date of issue) and limited to counterparties falling within defined categories (persons under section 274 of the SFA, or “sophisticated investors” under section 275(2) of the SFA).
What Are the Key Provisions?
Section 1: Citation and commencement provides the legal identity and effective date of the Regulations. It states that the Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 30) Regulations 2004” and that they came into operation on 5 July 2004. For practitioners, this matters when assessing whether stabilising trades were conducted within the regulatory framework applicable at the time of the relevant offering.
Section 2: Definitions sets the boundaries of the exemption. Two defined terms are central:
- “Notes” means the 5-year fixed rate notes due July 2009 issued by Export-Import Bank of India for a principal amount of up to US$300 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Deutsche Bank AG London (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.
From a compliance perspective, these definitions are critical because they operate like “gates.” If the security is not the specified Notes, or if the stabilising activity is not carried out by the specified stabilising party (or its related corporations), the exemption does not apply. Likewise, if the activity is not undertaken for the stabilisation purpose described, the exemption may be unavailable.
Section 3: Exemption is the operative provision. It provides that Sections 197 and 198 of the SFA shall not apply to any 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 SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
Although the extract does not reproduce the text of SFA sections 197 and 198, the structure indicates that those sections contain market conduct prohibitions or restrictions that would otherwise capture stabilising trades. This Regulations effectively carves out an exception for stabilisation activity meeting the defined conditions.
Time limitation (30 days) is a key compliance constraint. Stabilising action outside the 30-day window would not benefit from the exemption. Practitioners should therefore ensure that trade logs, dealing records, and communications can demonstrate the timing of stabilising activity relative to the “date of issue” of the Notes.
Counterparty limitation is equally important. The exemption is not open-ended; it only applies where the stabilising action is taken with persons within the SFA’s specified categories. In practice, this requires careful review of who the counterparty was (and whether that counterparty qualifies under the relevant SFA provisions). If stabilising trades were executed with a counterparty that does not fall within section 274 or the sophisticated investor definition, the exemption may not apply, potentially exposing the stabilising party to liability under the SFA provisions that were otherwise disapplied.
How Is This Legislation Structured?
This Regulations is structured as a short instrument with a conventional layout for subsidiary legislation:
- Section 1 (Citation and commencement): identifies the Regulations and sets the commencement date.
- Section 2 (Definitions): defines “Notes” and “stabilising action” to precisely identify the scope of the exemption.
- Section 3 (Exemption): states the legal effect—disapplication of SFA sections 197 and 198—subject to timing and counterparty conditions.
There are no additional Parts or complex schedules in the extract. The entire regulatory effect is therefore concentrated in the definitions and the single exemption clause.
Who Does This Legislation Apply To?
In terms of persons, the exemption is designed to benefit the stabilising party described in the definition of “stabilising action”—Deutsche Bank AG London and its related corporations. However, the exemption’s practical effect also depends on the counterparties with whom stabilising action is taken. Section 3 restricts the exemption to stabilising transactions conducted with persons referred to in section 274 of the SFA or with sophisticated investors under section 275(2).
In terms of transactions, the exemption applies only to stabilising action in respect of the specific Export-Import Bank of India notes described in the definition. It is not a general stabilisation authorisation for any debt issuance. Accordingly, lawyers advising issuers, dealers, or trading desks must treat this as a transaction-specific regulatory permission.
Why Is This Legislation Important?
Although the Regulations are brief, they are significant for market participants because they clarify when stabilisation activity can occur without triggering certain SFA market conduct provisions. In capital markets practice, stabilisation is often essential to the orderly distribution of new issues, particularly where liquidity is initially thin or where price discovery is still developing. Without an exemption, stabilising trades could be characterised as prohibited conduct, creating legal uncertainty and potentially discouraging legitimate market-making behaviour.
From an enforcement and risk perspective, the Regulations also demonstrate MAS’s approach: rather than permitting stabilisation broadly, it uses precision drafting—defining the exact instrument, the stabilising entity, the stabilisation purpose, the time window, and the eligible counterparties. This reduces ambiguity and supports compliance monitoring. For practitioners, this means the legal analysis is highly fact-specific: the exemption turns on whether the activity fits within each defined element.
Practically, lawyers should use these Regulations as a checklist when reviewing stabilisation programmes for the relevant Notes. Key diligence points include: (1) confirming the Notes match the defined issuance; (2) confirming the stabilising party is Deutsche Bank AG London or a related corporation; (3) confirming the trades were undertaken for stabilisation/price maintenance; (4) confirming the trades were executed within 30 days from the date of issue; and (5) confirming the counterparties qualify under section 274 or are sophisticated investors under section 275(2).
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 (as referenced in the legislation metadata context).
- Stabilising Act (as referenced in the legislation metadata context).
- Timeline (legislation versioning reference for confirming the correct version as at the relevant date).
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. 30) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.