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 Power: Made under section 337(1) of the Securities and Futures Act
- Citation: SL 422/2004
- Commencement: 12 July 2004
- Status (as provided): Current version as at 27 Mar 2026
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
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. In plain terms, it creates a limited exemption from certain “market conduct” rules in the Securities and Futures Act for stabilising activities carried out in relation to a specific issuance of notes by a particular issuer.
Stabilising action is a common feature of securities offerings. After a new issue, market prices can fluctuate sharply. Under regulated frameworks, stabilisation may be permitted so that the market price of the newly issued securities does not fall too abruptly, which can help ensure orderly trading and reduce volatility. However, stabilisation can also raise concerns about market manipulation. Singapore’s market conduct regime therefore generally restricts stabilising conduct, unless a statutory exemption applies.
This Regulations’ purpose is to carve out an exemption for stabilising action connected to US$ fixed rate notes to be issued by Korea Southern Power Co., Ltd. in July 2004 (up to US$150 million). The exemption is time-limited (within 30 days from the date of issue) and is further limited to stabilising action undertaken with certain counterparties—namely persons specified in the Securities and Futures Act and “sophisticated investors” as defined in that Act.
What Are the Key Provisions?
Section 1: Citation and commencement provides the formal name of the Regulations and states that they come into operation on 12 July 2004. This matters for practitioners because the exemption can only apply to stabilising action within the scope and timing contemplated by the Regulations and the underlying Act.
Section 2: Definitions sets the boundaries of what the Regulations cover. Two definitions are central:
- “Notes” are defined narrowly as the US$ 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 is not a general stabilisation exemption for any notes; it is an issuer- and issue-specific carve-out.
- “Stabilising action” is defined as 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. The definition is therefore both conduct-specific (buying or agreeing to buy) and purpose-specific (stabilising or maintaining price).
Section 3: Exemption is the operative provision. It states that Sections 197 and 198 of the Securities and Futures Act shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, 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.
For a practitioner, the most important aspects of Section 3 are the three layers of limitation:
- Subject matter limitation: the exemption applies only to stabilising action “in respect of” the defined Notes (the specific Korea Southern Power notes).
- Time limitation: stabilising action must be taken within 30 days from the date of issue. This requires careful compliance tracking—firms must know the issue date and ensure any stabilisation activity falls within the permitted window.
- Counterparty limitation: the exemption applies only when stabilising action is taken with a person in the category in section 274 of the Act or with a sophisticated investor under section 275(2). This means that stabilisation cannot be conducted indiscriminately; the identity and classification of the counterparty is critical.
Although the text provided does not reproduce Sections 197 and 198 of the Securities and Futures Act, the structure indicates that those sections impose prohibitions or restrictions on certain market conduct activities. The Regulations therefore function as a statutory “safe harbour” for stabilisation conduct, but only within the defined parameters. In practice, counsel should treat this as a narrow exemption that must be strictly construed and documented.
Practical compliance note: because the exemption is tied to specific actors (Barclays Bank PLC and related corporations) and specific conduct (buying or agreeing to buy), firms should ensure that any stabilisation programme is implemented by the correct entity within the Barclays group and that the trading arrangements reflect the defined stabilising purpose. If stabilisation is carried out through another entity or involves different conduct (for example, selling rather than buying, or conduct not aimed at price stabilisation), the exemption may not apply.
How Is This Legislation Structured?
This Regulations is structured in a short, functional format typical of targeted exemptions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that define the scope of “Notes” and “stabilising action”.
- Section 3 contains the exemption from specified provisions of the Securities and Futures Act, including the 30-day limit and the counterparty categories.
There are no additional parts or complex schedules in the extract provided. The legislative design is therefore straightforward: define the relevant securities and conduct, then exempt specified Act provisions within specified time and counterparty constraints.
Who Does This Legislation Apply To?
The Regulations applies to stabilising action taken in relation to the defined Notes by Barclays Bank PLC or its related corporations. In other words, the exemption is not available to every market participant; it is tied to the stabilising actor described in the definition of “stabilising action”.
It also applies only when stabilising action is undertaken with counterparties falling within the categories in section 274 of the Securities and Futures Act or with sophisticated investors under section 275(2). Accordingly, the practical applicability depends on both (i) who is conducting the stabilisation and (ii) who is on the other side of the stabilising trades or arrangements.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing policy goals: enabling orderly market functioning through stabilisation, while preventing conduct that could be characterised as market manipulation. By exempting stabilising action from specific statutory prohibitions, the Regulations provides legal certainty for a particular offering and stabilisation programme.
For practitioners—particularly those advising issuers, lead managers, or trading desks—the value lies in the precision of the exemption. It is not a blanket permission to stabilise; it is a narrowly tailored safe harbour. This means that legal advice must focus on confirming that all elements are satisfied: the exact security (the defined Notes), the exact actor (Barclays Bank PLC or related corporations), the exact conduct (buying or agreeing to buy), the exact timing (within 30 days from issue), and the exact counterparty categories (section 274 persons or sophisticated investors).
From an enforcement and risk perspective, the exemption’s narrowness increases the compliance burden. Firms should maintain contemporaneous records of the issue date, the stabilisation period, the identity and classification of counterparties, and the rationale and mechanics of stabilising trades. Where any element falls outside the defined scope, the general prohibitions in the Securities and Futures Act may apply, potentially exposing the firm and individuals to regulatory action.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, the provisions referenced in the Regulations: sections 197, 198, 274, and 275(2), and the authorising 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 (for version control and amendment history, as indicated in 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. 32) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.