Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 32) Regulations 2004
- Act Code: SFA2001-S422-2004
- Legislative Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 12 July 2004
- Key Provisions: Section 1 (Citation and commencement), Section 2 (Definitions), Section 3 (Exemption)
- Regulatory Status (per provided extract): Current version as at 27 Mar 2026
- Instrument Reference: SL 422/2004
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 32) Regulations 2004 is a targeted regulatory instrument. Its central purpose is to carve out a specific exemption from certain market conduct restrictions in the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to a particular issuance of notes.
In plain terms, the Regulations recognise that, in some debt capital market transactions, market participants may undertake “stabilising action” to help maintain orderly trading and reduce volatility immediately after issuance. Without an exemption, such conduct could potentially fall within statutory prohibitions or requirements designed to prevent market manipulation. This instrument therefore permits stabilising action in a narrowly defined context—both by reference to the specific notes and by reference to the persons who may participate.
Although the Regulations are short, they are legally significant because they operate as a statutory override. They expressly disapply sections 197 and 198 of the SFA for stabilising action taken within a defined time window after issue, and only for stabilising action involving specified categories of counterparties (including persons under section 274 of the SFA and “sophisticated investors” under section 275(2) of the SFA).
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal identity of the Regulations and states that they come into operation on 12 July 2004. For practitioners, this matters because the exemption is time-bound and transaction-specific; the effective date confirms that the exemption is intended to apply to the relevant issuance period in July 2004.
Section 2 (Definitions) is the backbone of the Regulations. It defines two critical terms: “Notes” and “stabilising action”. The “Notes” are defined very specifically as US$ fixed rate notes to be issued by Korea Southern Power Co., Ltd. in July 2004 for a principal amount of up to US$150 million. This specificity is important: the exemption is not general-purpose. It is tied to a particular issuer, currency, instrument type, and issuance timing/size.
The definition of “stabilising action” is also tightly framed. It refers to an action taken in Singapore or elsewhere by Barclays Bank PLC (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 matters for two reasons. First, it identifies the authorised stabilising actor (Barclays Bank PLC and its related corporations). Second, it clarifies the permitted conduct (buying, offering, or agreeing to buy) and the objective (stabilisation/price maintenance).
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of the Notes within 30 days from the date of issue, with stabilising action conducted with either:
- a person referred to in section 274 of the Act; or
- a sophisticated investor as defined in section 275(2) of the Act.
Practically, Section 3 does two things simultaneously. It (1) removes the risk that stabilising behaviour will be treated as prohibited conduct under the referenced SFA provisions, and (2) limits the exemption to stabilising action that is undertaken within a 30-day post-issue window and with eligible counterparties. The counterparty limitation is particularly important for compliance: even if the stabilising actor and the notes match the definitions, the exemption will not be available if the stabilising transactions are not with the specified categories of persons.
For a lawyer advising on transaction structuring or compliance, the key interpretive tasks are therefore: (i) confirming the notes fall within the defined “Notes”; (ii) confirming the stabilising action is taken by Barclays Bank PLC or its related corporations and fits the defined “stabilising action”; (iii) confirming the timing is within 30 days from the date of issue; and (iv) confirming the counterparties are within section 274 or are “sophisticated investors” under section 275(2) of the SFA.
How Is This Legislation Structured?
The Regulations are structured in a conventional, short form typical of targeted exemptions. They contain:
Section 1 (Citation and commencement) sets the legal identity and effective date.
Section 2 (Definitions) provides the interpretive framework by defining “Notes” and “stabilising action”. These definitions are essential because the exemption in Section 3 is only triggered if the relevant facts match the defined terms.
Section 3 (Exemption) is the only substantive operative section. It disapplies specified SFA provisions (sections 197 and 198) for stabilising action meeting the defined criteria (notes, actor, purpose, timing, and eligible counterparties).
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and therefore sit within a broader regulatory framework, their practical application is narrow. The exemption is directed at stabilising action in relation to a specific issuance of notes by Korea Southern Power Co., Ltd. in July 2004, and it is limited to stabilising action taken by Barclays Bank PLC or its related corporations.
In addition, the exemption is conditional on the stabilising action being taken with either (a) persons referred to in section 274 of the SFA or (b) sophisticated investors as defined in section 275(2) of the SFA. Accordingly, the Regulations do not create a blanket permission for stabilisation with any market participant. They require that the transaction counterparties fall within the SFA’s specified investor categories.
Why Is This Legislation Important?
This instrument is important because it demonstrates how Singapore’s market conduct regime balances two competing objectives: preventing market manipulation and facilitating legitimate market practices that support orderly trading. Stabilisation activities can be commercially valuable in the immediate aftermath of issuance, particularly for less liquid instruments. However, stabilisation can also resemble conduct that market conduct rules seek to deter. The Regulations resolve this tension by providing a controlled exemption.
From an enforcement and compliance perspective, the exemption is also a risk-management tool. Without it, stabilising action could potentially be scrutinised under the SFA provisions that are disapplied (sections 197 and 198). By expressly disapplying those sections, the Regulations reduce legal uncertainty for the authorised stabilising actor and the transaction participants—provided all conditions are met.
For practitioners, the most practical impact is that the exemption creates a compliance checklist. Counsel should ensure that internal documentation and transaction records can evidence: the identity and characteristics of the notes; the stabilising actor’s role (Barclays Bank PLC or related corporations); the nature of the trades (buying, offering, or agreeing to buy for stabilisation/price maintenance); the timing (within 30 days from issue); and the counterparty classification (section 274 persons or sophisticated investors under section 275(2)). Where any element is missing, the exemption may not apply, and the stabilising conduct could fall back into the general SFA market conduct regime.
Related Legislation
- Securities and Futures Act (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 provided metadata context)
- Stabilising Act (as referenced in the provided metadata context)
- Timeline (legislation timeline 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. 32) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.