Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 31) Regulations 2005
- Act Code: SFA2001-S485-2005
- Legislation Type: Subsidiary legislation (SL)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Commencement: 25 July 2005
- Regulation Number: SL 485/2005
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Definitions (notably “Notes” and “stabilising action”)
- Regulation 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 31) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. It creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (“SFA”) for stabilising transactions carried out in relation to a specific bond issuance.
In plain terms, the Regulations recognise that, in some debt capital market transactions, market participants may take actions intended to support or maintain the trading price of newly issued notes. Such “stabilising action” can be commercially important to facilitate orderly trading and reduce volatility immediately after issuance. However, stabilising conduct can also resemble prohibited market manipulation if not carefully bounded. This is why the SFA contains market conduct provisions restricting certain dealing and trading behaviours.
This subsidiary legislation resolves the tension by carving out a limited exemption. It allows stabilising action to be taken—within a defined time window and by specified persons—in respect of a defined set of notes. The exemption is not general; it is tied to a particular issuance and to stabilising activities carried out by ABN AMRO Bank N.V. (and its related corporations) in the manner described in the Regulations.
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 25 July 2005. For practitioners, this matters because the exemption only becomes available from the commencement date, and any stabilising activity outside the statutory timeframe may fall back into the general prohibitions under the SFA.
2. Definitions: “Notes” and “stabilising action” (Regulation 2)
Regulation 2 is crucial because it makes the exemption highly specific. Two definitions drive the scope:
(a) “Notes” are defined as the 5-year fixed rate notes due July 2010 issued by Korea Electric Power Corporation for a principal amount of up to EURO 250 million. This definition is issuance-specific: if the instrument is not those notes (for example, a different maturity, issuer, or tranche), the exemption does not apply.
(b) “stabilising action” is defined as an action taken in Singapore or elsewhere by ABN AMRO Bank N.V. 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. This definition is also restrictive: it limits the actors (ABN AMRO and related corporations) and the conduct (buying or offering/agreement to buy) and ties the purpose to stabilisation/price maintenance.
3. The exemption from SFA sections 197 and 198 (Regulation 3)
The operative provision is Regulation 3. 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, with stabilising action carried out by 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 provided does not reproduce the text of SFA sections 197 and 198, the legal effect is clear: the exemption removes the application of those market conduct prohibitions to the specified stabilising activities. For practitioners, the key compliance takeaway is that the exemption is conditional. It applies only if all conditions are satisfied:
- Time condition: stabilising action must be taken within 30 days from the date of issue.
- Instrument condition: the action must be in respect of the defined Korea Electric Power Corporation notes (the 5-year fixed rate notes due July 2010, up to EURO 250 million).
- Actor/transaction condition: the stabilising action must be taken by a person within the categories in Regulation 3 (section 274 persons or sophisticated investors), and the action must fall within the definition of “stabilising action” (ABN AMRO and related corporations buying or offering/agreement to buy for stabilisation/price maintenance).
Practical implication: if stabilising activity occurs outside the 30-day window, or if it is conducted by a party not captured by the relevant categories, the exemption will not protect the conduct. In that case, the general SFA market conduct provisions (including sections 197 and 198) could apply, potentially exposing the participant to regulatory action or enforcement risk.
4. Formal making and signature
The Regulations were made on 18 July 2005 by Heng Swee Keat, Managing Director of MAS. This is relevant for legal certainty and administrative provenance, particularly when assessing whether the exemption was properly authorised and enacted.
How Is This Legislation Structured?
The Regulations are short and structured as a standard subsidiary legislative instrument with three substantive components:
Regulation 1 sets out the citation and commencement date.
Regulation 2 provides definitions that determine the scope of “Notes” and “stabilising action”.
Regulation 3 contains the exemption and specifies the SFA provisions excluded, the time period (30 days from issue), and the categories of persons eligible to take the stabilising action.
Notably, there are no additional parts or complex procedural requirements in the extract. The legislative design is therefore “precision by definition”: the exemption is achieved primarily through tightly drafted definitions and a narrow temporal condition.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action taken in respect of the defined notes, but the exemption is not available to everyone. It is directed at stabilising conduct that meets the definition of “stabilising action” and is carried out by persons within the categories referenced in Regulation 3.
In practice, this means the exemption is relevant to:
- ABN AMRO Bank N.V. and its related corporations (as the defined stabilising actor); and
- the extent the stabilising action is taken by a person referred to in section 274 of the SFA or by a sophisticated investor under section 275(2).
Because the exemption is issuance-specific, it is most likely to be relevant to the arranger/lead manager and related dealing parties involved in the Korea Electric Power Corporation notes offering and the immediate post-issuance period. However, the legal test is not merely commercial involvement; it is whether the dealing activity fits the statutory definition and conditions.
Why Is This Legislation Important?
This subsidiary legislation is important because it demonstrates how Singapore’s market conduct framework balances two competing policy goals: (1) preventing market manipulation and improper dealing, and (2) allowing legitimate stabilisation practices in capital markets under controlled circumstances.
For practitioners advising issuers, underwriters, dealers, or investors, the Regulations provide a clear compliance pathway: stabilising action may be conducted without triggering the prohibitions in SFA sections 197 and 198—but only within the strict boundaries set out in the Regulations. This is particularly significant in debt offerings where stabilisation is sometimes used to support orderly trading during the initial distribution and price discovery period.
From an enforcement and risk perspective, the narrowness of the exemption is the key. If a firm undertakes stabilising activity that is not captured by the definition of “Notes,” is outside the 30-day window, or is performed by a party not within the referenced categories, the exemption will not apply. In that scenario, the firm must rely on other legal bases (if any) or ensure that the conduct complies with the general SFA market conduct rules. Therefore, legal review of stabilisation programmes should focus on mapping each dealing activity to the statutory conditions.
Finally, the Regulations are a useful example of how MAS uses targeted exemptions rather than broad carve-outs. This approach reduces regulatory uncertainty for the market while preserving the integrity of trading markets.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the enabling power in section 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (legislation portal reference for version control)
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.