Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 33) Regulations 2004
- Act Code: SFA2001-S472-2004
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Legislative Instrument Number: SL 472/2004
- Commencement: 5 August 2004
- Status (as provided): Current version as at 27 March 2026
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Enacting Authority: Monetary Authority of Singapore (MAS)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 33) Regulations 2004 is a narrow, targeted regulatory instrument. In plain terms, it creates a specific exemption from certain market conduct rules in the Securities and Futures Act (SFA) for “stabilising action” carried out in relation to a particular set of debt securities (“Notes”).
Stabilising action is a practice commonly used in securities offerings: a stabilising manager (or its related entities) may buy, or offer to buy, securities shortly after issuance to help maintain orderly trading and reduce excessive price volatility. However, stabilisation can resemble prohibited conduct if it is not clearly authorised and constrained. This is why the SFA contains market conduct provisions that generally restrict certain dealing activities around new issues.
This Regulations’ core function is to carve out a lawful pathway for stabilisation in respect of specified Notes, subject to strict conditions. It does not broadly legalise stabilisation for all securities or all actors; instead, it is limited to stabilising action taken within a defined time window and by specified categories of counterparties.
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 5 August 2004. For practitioners, this matters because the exemption is only available for stabilising action that occurs after the Regulations’ commencement (and, as discussed below, within the additional 30-day period from the Notes’ issue date).
Section 2 (Definitions) is crucial because the exemption depends entirely on the defined scope of “Notes” and “stabilising action”. The Regulations define:
- “Notes” as the 10-year US$ fixed rate notes due July 2014 issued by PTT Public Company Limited for a principal amount of up to US$400 million.
- “stabilising action” as an action taken in Singapore or elsewhere by Deutsche Bank Securities Inc. (or any of its related corporations) to buy, or 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.
From a legal risk perspective, these definitions are the gatekeepers. If the instrument being dealt with is not the specified PTT notes, or if the dealing is not undertaken by Deutsche Bank Securities Inc. (or its related corporations), the exemption will not apply. Similarly, the dealing must be for stabilisation/price maintenance purposes, not for other commercial objectives.
Section 3 (Exemption) is the operative provision. 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 conducted with 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.
In practical terms, this means the stabilising manager is shielded from the SFA’s market conduct restrictions in relation to the specified Notes, but only when the stabilising trades are carried out within the permitted timeframe and counterparties fall within the SFA’s defined categories.
Although the extract does not reproduce the text of sections 197, 198, 274, or 275, the structure indicates a classic regulatory design: the SFA generally prohibits or restricts certain dealing activities that could distort market prices or mislead investors, while allowing limited exceptions where the dealing is conducted in a controlled manner—often involving sophisticated or otherwise eligible counterparties.
Time limitation (30 days from issue) is particularly important. Stabilisation is typically most relevant immediately after issuance when liquidity and price discovery are still forming. By limiting the exemption to a 30-day period, the Regulations reduce the risk that stabilisation becomes a continuing market manipulation tool rather than a short-term market support measure.
Counterparty limitation is equally important. The exemption is not simply “for stabilisation”; it is “for stabilisation with” persons in section 274 or sophisticated investors under section 275(2). This implies that the SFA expects stabilising trades to be conducted with counterparties that are sufficiently informed, or otherwise within a regulatory framework that reduces retail harm and informational asymmetry.
How Is This Legislation Structured?
This Regulations is extremely short and consists of an enacting formula and three substantive provisions:
- Section 1 (Citation and commencement): identifies the Regulations and sets the commencement date (5 August 2004).
- Section 2 (Definitions): defines the two essential concepts—Notes and stabilising action—which determine the scope of the exemption.
- Section 3 (Exemption): provides the legal relief by disapplying SFA sections 197 and 198, subject to the 30-day period and the specified categories of counterparties.
There are no additional parts, schedules, or procedural requirements in the extract provided. For practitioners, this means compliance analysis will focus almost entirely on whether the dealing facts match the defined “Notes” and “stabilising action”, and whether the dealing occurred within the permitted 30-day window and with eligible counterparties.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in respect of the defined Notes, but the exemption is effectively available only to the stabilising actor described in the definition of “stabilising action”—namely Deutsche Bank Securities Inc. and its related corporations. Therefore, the primary regulated party is the stabilising manager (and its corporate group entities) conducting stabilisation trades.
However, the exemption’s effect also depends on who the stabilising trades are made with. The exemption applies only where the stabilising action is taken “with” a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). Accordingly, the counterparties to the stabilising transactions are also relevant to compliance: if a stabilising trade is executed with an ineligible counterparty, the exemption would not protect that transaction from the operation of sections 197 and 198.
Why Is This Legislation Important?
For market participants, this Regulations is important because it provides a legal safe harbour—but only within a narrow factual envelope. Stabilisation activities can be commercially desirable and sometimes necessary to ensure orderly trading after issuance. Without an exemption, stabilising trades could trigger enforcement risk under the SFA’s market conduct provisions.
From a compliance and transaction documentation standpoint, the Regulations requires lawyers to conduct a fact-specific eligibility analysis. Practitioners should verify at least four elements:
- Security identification: the Notes must be the specified PTT 10-year US$ fixed rate notes due July 2014 (up to US$400 million).
- Actor identification: the stabilising action must be taken by Deutsche Bank Securities Inc. or its related corporations.
- Purpose and conduct: the dealing must be to stabilise or maintain market price (including buying, offering, or agreeing to buy).
- Timing and counterparties: the stabilising action must occur within 30 days from the issue date and be conducted with persons in section 274 or sophisticated investors under section 275(2).
In enforcement terms, the exemption reduces uncertainty for stabilising managers who comply with the conditions. Conversely, it highlights that stabilisation outside the defined boundaries may expose the firm to regulatory action for conduct that would otherwise be prohibited under the SFA.
Finally, this Regulations illustrates MAS’s approach to market conduct regulation: rather than leaving stabilisation to general discretion, MAS uses targeted subsidiary legislation to tailor exemptions to specific issuance structures and market participants. This approach supports investor protection while allowing legitimate market-making and stabilisation practices under controlled conditions.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289): particularly sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Stabilising Act (as referenced in the metadata): relevant to the broader stabilisation framework (contextual reference).
- Futures Act (as referenced in the metadata): relevant only insofar as it forms part of the broader legislative landscape (contextual reference).
- Legislation Timeline / MAS legislative timeline: to confirm the correct version and any amendments (if applicable).
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. 33) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.