Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 31) Regulations 2004
- Act Code: SFA2001-S415-2004
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (specifically, powers under section 337(1))
- Commencement: 8 July 2004
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legislative Instrument Number: SL 415/2004
- Status (as provided): Current version as at 27 Mar 2026
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (“Notes”, “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the SFA for specified stabilising action
- Section 4: Revocation of an earlier exemption regulation (No. 24)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 31) Regulations 2004 is a targeted regulatory instrument made under the Securities and Futures Act (SFA). In plain terms, it creates a narrow exemption that allows certain market participants to take “stabilising action” in relation to a specific set of debt securities (the “Notes”) without breaching the general market conduct prohibitions found in the SFA.
Market conduct rules in the SFA are designed to protect investors and maintain fair, orderly, and transparent markets. However, stabilisation activities—when properly constrained—can be part of the mechanics of an issuance. For example, underwriters or dealers may seek to reduce volatility immediately after issuance by buying (or offering to buy) securities to support the market price. The law therefore balances two competing objectives: preventing manipulation and permitting limited stabilisation that is consistent with market integrity.
This particular set of Regulations is highly specific. It defines the Notes by reference to their issuer, currency, maturity, call features, and issue size; it defines stabilising action by reference to the authorised stabiliser (Citigroup Global Markets Limited and related corporations); and it limits the exemption to a short window—within 30 days from the date of issue. It also restricts the exemption to stabilising action involving either a person specified in section 274 of the SFA or a “sophisticated investor” as defined in section 275(2) of the SFA.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal title and states that the Regulations come into operation on 8 July 2004. For practitioners, this matters for determining whether stabilisation activities undertaken around the issuance period fall within the regulatory framework.
Section 2 (Definitions) is central because it determines the scope of the exemption. The Regulations define:
- “Notes” as the 10-year and 3-month US$ fixed rate subordinated notes due September 2014, callable with a step-up in 2009, issued by Public Bank Berhad, with a principal amount of up to US$350 million.
- “stabilising action” as an action taken in Singapore or elsewhere by Citigroup Global Markets Limited (or any of its related corporations) to buy or 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 narrow. If the instrument is not the specified Notes, or if the stabiliser is not Citigroup Global Markets Limited (or its related corporations), the exemption will not apply. Similarly, the definition is tied to price stabilisation or maintenance, rather than general trading or liquidity provision.
Section 3 (Exemption) is the operative provision. It states 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, provided the stabilising action is 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.
In practical terms, this means the stabiliser can engage in the specified stabilising conduct without triggering the prohibitions in sections 197 and 198—but only if all conditions are met: the action must be stabilising action as defined; it must relate to the specified Notes; it must occur within the 30-day post-issue period; and it must be directed at the permitted counterparties (section 274 persons or sophisticated investors).
Section 4 (Revocation) revokes the earlier exemption regulation: “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 24) Regulations 2004” (G.N. No. S 345/2004). Revocation is important for continuity and compliance. It indicates that the legal basis for any stabilisation exemption previously granted under No. 24 is replaced by this No. 31 instrument. For counsel, this requires checking whether any stabilisation activity relied on the earlier regulation and ensuring that the correct instrument was in force for the relevant dates.
How Is This Legislation Structured?
The Regulations are structured as a short, four-section instrument:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that delimit the scope of “Notes” and “stabilising action”.
- Section 3 creates the exemption from specified SFA provisions, subject to time, instrument, stabiliser, and counterparty conditions.
- Section 4 revokes a prior exemption regulation.
Because the Regulations are concise, the practitioner’s work typically involves cross-referencing the SFA provisions referenced in the exemption (sections 197, 198, 274, and 275(2)) and confirming that the stabilisation plan and documentation align with the defined terms.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and refer to “stabilising action” taken by a particular entity, the practical effect is to regulate the conduct of market participants who might otherwise fall within the prohibitions in sections 197 and 198 of the SFA. The exemption is available only for stabilising action taken by Citigroup Global Markets Limited or its related corporations. Therefore, the primary beneficiary is that stabiliser group, acting in relation to the specified Notes.
In addition, the exemption is conditional on the counterparty category. Stabilising action must be taken with either a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). This means that even if the stabiliser and Notes are correct, the exemption may not cover stabilisation trades with other types of counterparties. For compliance teams, this is a key gating issue: trade counterparties and investor classification must be verified.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct regime accommodates stabilisation while maintaining investor protection. The SFA’s market conduct prohibitions are broad, but the law recognises that certain stabilisation activities—if constrained—may be consistent with orderly markets. By carving out a limited exemption, MAS allows stabilisation to occur without undermining the prohibitions that guard against manipulation.
From a practitioner’s perspective, the value of this instrument lies in its precision. The exemption is not a general licence to stabilise; it is an exemption tied to: (i) a specific debt security; (ii) a specific stabiliser; (iii) a specific time period (30 days from issue); and (iv) specific counterparty categories. These constraints reduce ambiguity and help compliance officers and legal counsel assess whether particular trades are covered.
Finally, the revocation in section 4 signals that regulatory permissions may be updated or replaced. In transactional settings—especially around issuance—counsel should confirm which exemption regulation is currently applicable and whether any earlier exemption has been superseded. Failure to do so can create avoidable regulatory risk, including potential exposure to market conduct enforcement if stabilisation is conducted outside the exemption’s boundaries.
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 (mentioned in the provided metadata as related context)
- Stabilising Act (mentioned in the provided metadata as related context)
- Timeline / Legislation timeline (used to verify the correct version, per the provided 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. 31) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.