Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 32) Regulations 2005
- Act Code: SFA2001-S525-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Commencement: 3 August 2005
- Enacting date: Made on 28 July 2005
- Key provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
- Regulatory focus: Exemption from market conduct restrictions for stabilising actions in relation to specified notes
- Current status (as provided): Current version as at 27 March 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 32) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted piece of subsidiary legislation 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 connection with the issuance and early trading of specified debt securities (“Notes”), without being caught by particular market conduct provisions in the SFA.
Market conduct rules in the SFA are designed to protect investors and maintain fair and orderly markets. They generally restrict manipulative or misleading conduct and impose controls around dealings that could distort price formation. However, stabilisation is a recognised market practice in some debt offerings: under controlled conditions, an issuer or its agents may buy (or offer to buy) securities to help maintain an orderly market price after issuance. The Regulations therefore carve out a limited safe harbour for stabilisation, but only for a defined set of Notes and only within a defined time window.
Importantly, the exemption is not general. It is tied to specific Notes issued by Chartered Semiconductor Manufacturing Ltd, and it is limited to stabilising actions taken by Goldman Sachs (Singapore) Pte. (or its related corporations). It also restricts the counterparties to certain categories of persons under the SFA, including “sophisticated investors” and persons referenced in section 274 of the Act.
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the short title and states that the Regulations come into operation on 3 August 2005. For practitioners, this matters when assessing whether stabilising conduct occurred within the regulatory framework and whether the exemption was available at the relevant time.
2. Definitions: “Notes” and “stabilising action” (Section 2)
Section 2 is central because it defines the scope of the exemption. The term “Notes” is limited to two specific tranches issued by Chartered Semiconductor Manufacturing Ltd:
- Senior notes due August 2010 with a principal amount of up to US$750 million; and
- Senior notes due August 2015 with a principal amount of up to US$750 million.
This means the exemption cannot be relied upon for other securities, other issuers, or different maturities or amounts. Even if the securities are economically similar, the legal trigger is the defined “Notes” description.
Section 2 also defines “stabilising action” as an action taken in Singapore or elsewhere by Goldman Sachs (Singapore) Pte. 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. Two practical implications follow:
- Actor limitation: Only Goldman Sachs (Singapore) Pte. and its related corporations can benefit from the exemption. Other dealers or arrangers would need to rely on different exemptions or comply with the general SFA provisions.
- Purpose limitation: The conduct must be for the purpose of stabilising or maintaining market price. A purchase for investment, hedging without stabilisation intent, or other commercial reasons may not qualify if the stabilisation purpose is not met.
3. The exemption from SFA sections 197 and 198 (Section 3)
Section 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, with respect to dealings involving either:
- a person referred to in section 274 of the Act; or
- a sophisticated investor as defined in section 275(2) of the Act.
In effect, the Regulations provide a time-limited safe harbour: stabilisation is permitted (at least as far as the specified SFA provisions are concerned) for up to 30 days after issuance, but only when the stabilising action is conducted with eligible counterparties.
For legal practitioners, the phrase “shall not apply” is significant. It indicates that the relevant prohibitions/restrictions in sections 197 and 198 are displaced for the specified stabilising actions, rather than merely modified. However, the exemption is still bounded by the defined “Notes,” the defined “stabilising action,” the defined time period, and the defined counterparty categories.
4. Counterparty eligibility: section 274 persons and sophisticated investors
While the extract does not reproduce sections 274 and 275(2), the structure signals that the SFA distinguishes between different classes of market participants. The Regulations require that stabilising action be taken with persons falling within those categories. This is consistent with the policy that sophisticated or otherwise eligible counterparties are better able to understand market conduct risks and the nature of stabilisation activity.
How Is This Legislation Structured?
The Regulations are concise and consist of a short set of provisions:
- Section 1 (Citation and commencement): establishes the title and the date the Regulations take effect.
- Section 2 (Definitions): defines the key terms that determine the scope of the exemption—specifically, “Notes” and “stabilising action.”
- Section 3 (Exemption): sets out the exemption from the SFA’s market conduct provisions (sections 197 and 198), including the 30-day time limit and the eligible counterparty categories.
There are no additional parts or complex procedural requirements in the extract provided. The legislative design is therefore “precision drafting”: it identifies a particular issuance and a particular stabilisation activity by a particular dealer, and then provides a narrow exemption.
Who Does This Legislation Apply To?
The Regulations apply to stabilising actions in relation to the defined Notes issued by Chartered Semiconductor Manufacturing Ltd. In practical terms, the exemption is relevant primarily to the dealer(s) conducting stabilisation and any related corporate entities acting in that capacity.
Because “stabilising action” is defined as action taken by Goldman Sachs (Singapore) Pte. or its related corporations, the exemption’s beneficiary is effectively limited to that group. Additionally, the exemption only applies where the stabilising action is taken within 30 days from the date of issue and involves counterparties who are either (i) persons referenced in section 274 of the SFA or (ii) sophisticated investors under section 275(2). Therefore, even if the stabilisation is performed by the correct actor and within the correct time window, it must still satisfy the counterparty eligibility requirement.
Why Is This Legislation Important?
This Regulations matters because it illustrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing unfair or manipulative market practices, and (2) allowing legitimate market-making/stabilisation practices that support orderly trading after a debt issuance. Stabilisation can reduce volatility and support price discovery in the immediate post-issuance period, but it also carries the risk of misleading the market if not properly constrained.
By exempting stabilising actions from specific SFA provisions (sections 197 and 198), the Regulations provide legal certainty to the stabilising dealer and the issuer’s transaction team. Without such an exemption, stabilisation activity could be argued to fall within prohibited conduct, creating compliance risk and potentially undermining the feasibility of the offering strategy.
From a practitioner’s standpoint, the key compliance takeaways are:
- Scope control: confirm the securities are exactly the defined “Notes” (issuer, maturity, and principal amount thresholds).
- Actor control: ensure the stabilisation is conducted by Goldman Sachs (Singapore) Pte. or its related corporations.
- Time control: track the “date of issue” and ensure stabilisation occurs within the 30-day window.
- Counterparty control: verify that counterparties meet the SFA-defined categories (section 274 persons or sophisticated investors under section 275(2)).
Failure on any of these elements may mean the exemption does not apply, leaving the stabilising conduct subject to the general market conduct rules in the SFA.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, and 275(2)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Legislation Timeline / Timeline (as referenced 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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.