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) (notably section 337(1))
- Legislative Status: Current version as at 27 Mar 2026 (timeline indicates original making)
- Commencement: 5 July 2004
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Regulation Number: SL 409/2004
- Notes (defined instrument): 5-year fixed rate notes due July 2009 issued by Export-Import Bank of India (up to US$300 million)
- Stabilising party (defined): Deutsche Bank AG London and related corporations
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, instrument-specific regulatory exemption. In plain terms, it allows certain market participants to take “stabilising action” in relation to a particular issuance of notes without being caught by specified market conduct prohibitions in the Securities and Futures Act (SFA).
Market conduct rules in the SFA are designed to prevent manipulation and unfair practices that could distort the price or trading of securities. However, stabilisation is a recognised market practice in some jurisdictions: under controlled conditions, a stabilising manager may buy or offer to buy securities shortly after issuance to help maintain orderly trading and reduce excessive short-term volatility.
This subsidiary legislation carves out an exemption for stabilising activity connected to a defined set of “Notes” (the Export-Import Bank of India 5-year fixed rate notes due July 2009) and carried out by a defined stabilising party (Deutsche Bank AG London and its related corporations). The exemption is time-limited and is subject to the identity of the counterparty (either a person specified in the SFA or a “sophisticated investor”).
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 5 July 2004. For practitioners, this matters for compliance timing: stabilising conduct would need to fall within the relevant regulatory window and be assessed against the law in force at the time the stabilising action is taken.
Section 2 (Definitions) is central because the exemption is only available if the activity fits precisely within the defined terms. Two definitions drive the scope:
- “Notes” are defined as 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.
Practically, this definition is both instrument-specific and conduct-specific. If the notes are different, the exemption does not apply. If the stabilising manager is not Deutsche Bank AG London or its related corporations, the exemption does not apply. If the purpose is not stabilisation/market price maintenance, the exemption may not be available—even if the conduct looks similar on its face.
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the Act shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with stabilising action being permitted when it is 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.
In plain language, Section 3 provides a limited “safe harbour” from two SFA market conduct provisions for stabilising trades and related offers/agreements to buy—but only if: (i) the trades relate to the defined Notes; (ii) they occur within the first 30 days after issue; and (iii) the counterparty is within the permitted categories (section 274 persons or sophisticated investors).
For a lawyer advising a stabilising manager or its counsel, the key compliance tasks typically include: confirming the exact instrument (CUSIP/ISIN and issue documentation), confirming the stabilising entity and its corporate relationships, tracking the “date of issue” and ensuring the 30-day limit is respected, and documenting that counterparties fall within section 274 or meet the statutory definition of “sophisticated investor”.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with a conventional layout for subsidiary legislation:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that narrow the scope of the exemption to specific notes and a specific stabilising actor.
- Section 3 contains the exemption from specified SFA provisions, including the time limit (30 days from issue) and counterparty limitations (section 274 persons or sophisticated investors).
There are no additional parts or complex schedules in the extract provided. The Regulations therefore operate as a targeted carve-out rather than a comprehensive code.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and refer to SFA provisions, their practical application is directed at the parties conducting stabilising action. The exemption is available only for stabilising action taken by Deutsche Bank AG London or its related corporations (as defined in the Regulations’ definition of “stabilising action”). This means the exemption is not a general permission for any market participant; it is tied to a particular stabilising manager for a particular issuance.
In addition, the exemption is conditional on the stabilising action being taken with counterparties that fall within section 274 of the SFA or are sophisticated investors under section 275(2). Therefore, the Regulations indirectly impose compliance obligations on the stabilising manager to ensure that counterparties are correctly classified and that the trades/offers/agreements to buy are executed within the permitted framework.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct regime balances two competing objectives: (1) preventing manipulation and unfair trading practices, and (2) allowing legitimate stabilisation activity in connection with securities offerings. By exempting stabilising action from Sections 197 and 198 of the SFA, the Regulations reduce legal uncertainty for stabilising managers while still constraining the practice through strict boundaries.
From an enforcement and risk perspective, the exemption’s narrow drafting is significant. The Regulations do not provide a broad stabilisation licence. Instead, they require precise alignment with defined terms (the specific notes and the specific stabilising party), a strict 30-day post-issue window, and permitted counterparty categories. This structure limits the potential for abuse and helps regulators distinguish stabilisation from prohibited conduct.
For practitioners, the most practical impact is on transaction structuring and compliance documentation. Counsel should ensure that offering and stabilisation arrangements are drafted to reflect the exemption’s conditions: the stabilising entity should be correctly identified; the “date of issue” should be evidenced; the stabilisation period should be monitored; and counterparty eligibility should be verified and recorded. Where stabilisation is performed in multiple jurisdictions (“in Singapore or elsewhere”), the definition of stabilising action expressly covers actions taken outside Singapore as well, so cross-border execution planning must still satisfy the Singapore exemption conditions.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — particularly Sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1)
- Stabilising Act (as referenced in the metadata)
- Futures Act (as referenced in the 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. 30) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.