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 (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 5 July 2004
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory status: Current version as at 27 Mar 2026 (per legislation timeline)
- Legislative instrument number: SL 409/2004
- Made date: 18 June 2004
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 targeted regulatory instrument. In plain terms, it creates a specific exemption from certain “market conduct” restrictions under the Securities and Futures Act (the “SFA”) for a limited type of activity—namely, stabilising actions taken in connection with a particular issuance of notes.
Stabilisation is a common feature of securities markets. When new securities are issued, market participants may take steps to support or maintain the trading price in the immediate aftermath of issuance. However, stabilisation can overlap with conduct that securities laws seek to regulate—such as improper trading, misleading price formation, or other forms of market manipulation. This regulation addresses that tension by carving out a narrow exemption, but only for a defined set of notes, a defined stabiliser, and a defined time window.
Importantly, the exemption is not general. It is tied to a specific instrument: 5-year fixed rate notes due July 2009 issued by the Export-Import Bank of India, up to a principal amount of US$300 million. It is also tied to stabilising actions taken by Deutsche Bank AG London (or its related corporations). The exemption applies only within 30 days from the date of issue of the notes, and only in relation to dealings with certain categories of investors.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides 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 come into operation on 5 July 2004. For practitioners, this matters because the exemption’s availability depends on the timing of the stabilising action relative to the regulatory framework and the issuance timeline.
2. Definitions (Regulation 2)
Regulation 2 defines two critical terms that control the scope of the exemption:
- “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.
These definitions are highly consequential. They limit the exemption to (i) a specific bond/notes issuance and (ii) a specific stabilising actor (Deutsche Bank AG London and its related corporations). They also specify the nature of the stabilising conduct: buying (or offering/agreement to buy) to stabilise or maintain market price. Other forms of market support—such as selling to influence price, or engaging in conduct not involving purchase commitments—would not clearly fall within the definition as written.
3. The exemption from Sections 197 and 198 of the SFA (Regulation 3)
Regulation 3 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 of the Notes, with respect to dealings involving:
- (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, this means that the stabilising activity—buying or agreeing to buy the Notes for stabilisation purposes—can occur without triggering the prohibitions or restrictions contained in Sections 197 and 198, but only if all conditions are satisfied:
- the activity is a “stabilising action” as defined (by the specified stabiliser, for the specified purpose);
- it is taken in respect of the specified “Notes”;
- it occurs within the 30-day post-issue window from the date of issue; and
- the dealings are with the relevant investor categories (persons under section 274 or sophisticated investors under section 275(2)).
4. Investor-category limitation and compliance implications
The investor-category limitation is a key compliance feature. Even if Deutsche Bank (or a related corporation) undertakes stabilising purchases within the correct time window, the exemption is only available for dealings with the specified categories of persons. For counsel advising on market conduct compliance, this creates a need to verify counterparties and ensure that stabilising trades are executed within the permitted investor framework.
Because the exemption is drafted by reference to sections 274 and 275(2) of the SFA, practitioners should treat those provisions as integral to the analysis. The exemption’s practical operation depends on how those sections define the relevant persons and what documentation or due diligence is required to establish that a counterparty qualifies as a “sophisticated investor” (or falls within section 274).
How Is This Legislation Structured?
This instrument is concise and consists of an enacting formula and three substantive regulations:
- Regulation 1 (Citation and commencement): sets the name of the Regulations and the date they come into operation (5 July 2004).
- Regulation 2 (Definitions): defines “Notes” and “stabilising action,” which are the two core scope-limiting concepts.
- Regulation 3 (Exemption): provides the exemption from Sections 197 and 198 of the SFA, subject to the time limit (30 days from issue), the stabiliser/notes definitions, and the investor-category conditions.
There are no additional parts or schedules in the extract provided. The structure reflects the regulation’s purpose: to grant a narrow, transaction-specific exemption rather than to establish a broad regulatory regime.
Who Does This Legislation Apply To?
Although the exemption is framed as applying to “stabilising action” in respect of the Notes, it effectively targets a particular market participant and transaction. The stabilising actions must be taken in Singapore or elsewhere by Deutsche Bank AG London or its related corporations. Therefore, the primary practical beneficiaries are the stabilising entity(ies) involved in the issuance and any related corporate entities that conduct the stabilising purchases.
However, the exemption also operates through the counterparties involved in the dealings. It applies only where the stabilising action is taken within the 30-day window and the dealings are with persons falling within section 274 of the SFA or with sophisticated investors under section 275(2). Accordingly, the regulation has implications for compliance teams and trading desks: they must ensure that stabilising trades are executed with eligible counterparties and that the exemption conditions are documented and defensible.
Why Is This Legislation Important?
This regulation is important because it illustrates how Singapore’s market conduct framework accommodates legitimate market practices such as stabilisation, while still preserving the integrity of price formation. Without an exemption, stabilising purchases could potentially fall within the ambit of prohibitions in the SFA relating to market manipulation or improper trading practices (as reflected by the cross-reference to Sections 197 and 198). The exemption provides legal certainty for stabilisation activity that is structured to support orderly markets during the immediate post-issuance period.
For practitioners, the value lies in the regulation’s precision. It is not a blanket permission to stabilise; it is a conditional exemption. The defined scope—specific notes, specific stabiliser, specific conduct (buying or agreeing to buy), specific geography (Singapore or elsewhere), and a specific time limit (30 days from issue)—means that compliance failures are likely to be fact-specific. Lawyers advising on such transactions should therefore focus on evidence and process: confirming the identity of the stabilising entity, the nature of the trades, the timing relative to the issue date, and the eligibility of counterparties.
Additionally, the investor-category limitation underscores that stabilisation is treated differently depending on who is being dealt with. This may affect how trading counterparties are selected, how investor status is verified, and how records are maintained. In disputes or regulatory inquiries, the availability of the exemption may turn on whether the exemption conditions were satisfied at the time of the trades.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Sections 197 and 198 (the provisions from which exemption is granted)
- Sections 274 and 275(2) (investor categories referenced in the exemption)
- Section 337(1) (authorising power for making the Regulations)
- 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.