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 power: Section 337(1) of the Securities and Futures Act
- Commencement: 3 August 2005
- Regulation number: SL 525/2005
- Status: Current version as at 27 March 2026 (per provided extract)
- Key provisions: Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
- Relevant Act provisions referenced: Sections 197, 198, 274, 275(2) of the Securities and Futures Act
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 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct rules under the Securities and Futures Act (the “SFA”). In plain language, it allows specified persons to take “stabilising action” in relation to particular debt securities (“Notes”) during a defined window after issuance, without those actions being treated as prohibited conduct under the SFA.
Market conduct provisions in the SFA are designed to protect investors and maintain fair and orderly markets by restricting manipulative or misleading trading practices. However, in some capital market transactions—particularly bond and note issuances—stabilisation activities are sometimes used to support liquidity and reduce excessive volatility immediately after issuance. The Regulations therefore carve out an exemption so that stabilisation can occur lawfully, provided it meets the defined conditions.
Importantly, this is not a general stabilisation regime. It is transaction-specific: it defines the Notes by issuer and maturity/size, defines the stabilising action by reference to the stabilising party (Goldman Sachs (Singapore) Pte. and related corporations), and limits the exemption to stabilising actions taken within 30 days from the date of issue. It also restricts the counterparties to persons identified in section 274 of the SFA or to “sophisticated investors” as defined in section 275(2) of the SFA.
What Are the Key Provisions?
Regulation 1: Citation and commencement. Regulation 1 provides the short title and states that the Regulations come into operation on 3 August 2005. For practitioners, this matters because the exemption only becomes available from the commencement date, and the 30-day stabilisation window in Regulation 3 runs from the “date of issue of the Notes” (not from the commencement date). Nonetheless, the commencement date is relevant for determining the legal basis for actions taken after the Regulations were made.
Regulation 2: Definitions of “Notes” and “stabilising action”. Regulation 2 is the core interpretive gateway. It defines two key terms:
- “Notes” means:issued by Chartered Semiconductor Manufacturing Ltd.
- senior notes due August 2010 for a principal amount of up to US$750 million; and
- senior notes due August 2015 for a principal amount of up to US$750 million,
- “stabilising action” means 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 points follow from these definitions. First, the exemption is limited to the specified Notes; stabilisation in other instruments, or by reference to different tranches, would not fall within the definition. Second, the stabilising activity is defined broadly to include not only actual purchases but also offers or agreements to buy—so compliance teams should consider whether forward commitments, conditional orders, or other pre-trade arrangements could be characterised as “offer or agree to buy”.
Regulation 3: Exemption from sections 197 and 198 of the Act. Regulation 3 provides the operative exemption. It states that sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with stabilising actions carried out 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.
In effect, Regulation 3 authorises stabilisation within a short post-issuance period, but only when the stabilising trades are conducted with the permitted counterparty categories. For legal practitioners, this is a compliance-critical condition: even if the stabilising action is taken by the correct stabiliser (Goldman Sachs (Singapore) Pte. or related corporations) and relates to the correct Notes, the exemption may fail if the counterparty is outside the section 274 / sophisticated investor categories.
Finally, Regulation 3 is time-bound. The phrase “within 30 days from the date of issue of the Notes” requires careful factual determination of the “date of issue” (which may be the issue date stated in the offering documentation, the settlement date, or another date used in the transaction structure). Market conduct compliance should align the stabilisation programme schedule with the legal definition of the 30-day period.
How Is This Legislation Structured?
This Regulations instrument is concise and consists of an enacting formula and three substantive regulations:
- Regulation 1 sets out the citation and commencement.
- Regulation 2 provides definitions for “Notes” and “stabilising action”.
- Regulation 3 creates the exemption by disapplying sections 197 and 198 of the SFA to qualifying stabilising actions, subject to the 30-day limit and counterparty conditions.
There are no additional parts or complex procedural provisions in the extract provided. The structure reflects the Regulations’ purpose: to provide a narrow, transaction-specific exemption rather than to establish a comprehensive stabilisation framework.
Who Does This Legislation Apply To?
The exemption is directed at stabilising actions in relation to the defined Notes. While the Regulations do not explicitly list “regulated persons” in the way some licensing or authorisation statutes do, the definitions effectively identify the stabiliser: Goldman Sachs (Singapore) Pte. and its related corporations. Accordingly, the exemption is relevant to those entities planning or executing stabilisation trades.
However, the exemption also depends on the counterparty to the stabilising trades. Regulation 3 limits the exemption to stabilising actions taken with either a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). Therefore, the Regulations indirectly affect other market participants involved in the stabilisation process—such as trading desks, syndicate participants, and counterparties—because they must ensure that the counterparties fall within the permitted categories for the exemption to apply.
Why Is This Legislation Important?
This Regulations is important because it reconciles two competing objectives in securities regulation: (1) preventing market manipulation and unfair trading practices, and (2) allowing legitimate market-making and stabilisation practices in connection with new issuances. By disapplying sections 197 and 198 of the SFA for a limited stabilisation window, it provides legal certainty for stabilisation activities that are commonly used in bond and note markets.
For practitioners, the key significance lies in the precision of the exemption. It is not enough to know that stabilisation is generally permissible; lawyers must verify that all conditions are met: the instrument must fall within the defined “Notes”; the stabiliser must be Goldman Sachs (Singapore) Pte. or a related corporation; the action must be taken within 30 days from the date of issue; and the trades must be conducted with permitted counterparties (section 274 persons or sophisticated investors). Missing any one element can expose the stabilisation activity to the underlying prohibitions in sections 197 and 198.
From an enforcement and risk perspective, the Regulations also highlight where regulators will likely focus attention: the timing of stabilisation, the identity of the stabiliser, the nature of the trades (including offers or agreements to buy), and the counterparty eligibility. Compliance teams should therefore document the stabilisation programme, maintain transaction records demonstrating eligibility, and ensure that trading systems and counterparties are configured to support the exemption’s conditions.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly 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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.