Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 33) Regulations 2005
- Act Code: SFA2001-S531-2005
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 8 August 2005
- Regulations: Sections 1–3
- Key provisions:
- Section 2: Definitions of “Notes” and “stabilising action”
- Section 3: Exemption from Sections 197 and 198 of the Securities and Futures Act for specified stabilising action within a defined period and for specified counterparties
- Instrument identifier: SL 531/2005
- Status (as provided): Current version as at 27 Mar 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 33) Regulations 2005 is a narrow, transaction-specific regulatory instrument. In plain language, it creates a limited legal “safe harbour” that allows certain market participants to take stabilising actions in relation to a particular bond issuance—without being caught by specific market conduct prohibitions in the Securities and Futures Act.
Stabilising action is a common feature of capital markets transactions. It typically involves buying (or offering to buy) securities shortly after issuance to help maintain orderly trading and reduce excessive price volatility. However, market conduct rules often restrict trading practices that could be perceived as manipulative. This Regulations package addresses that tension by exempting stabilising activity from certain statutory prohibitions, but only if strict conditions are met.
Crucially, the exemption is not general. It is tied to a defined set of “Notes” (a particular 5-year fixed rate notes issuance by a specified issuer) and a defined set of actors (J.P. Morgan Securities Inc. and its related corporations) and is limited to a short window after issuance (30 days). It also limits the counterparties to either persons referenced in the Act or to “sophisticated investors” as defined in the Securities and Futures Act.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms the name of the Regulations and provides that they come into operation on 8 August 2005. For practitioners, this matters because the exemption can only be relied upon for stabilising actions taken after commencement and within the statutory conditions.
Section 2 (Definitions) sets the boundaries of the exemption by defining two critical terms:
- “Notes” are defined as the 5-year fixed rate notes due August 2010 issued by Nissay 2005 Fund Global Special Purpose Company, Ltd. for a principal amount of up to US$500 million.
- “stabilising action” means an action taken in Singapore or elsewhere by J.P. Morgan Securities Inc. 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 definitional precision is central. If the instrument being traded is not the specified Notes, or if the trading entity is not J.P. Morgan Securities Inc. (or its related corporations), the exemption will not apply. Likewise, the purpose of the action must be stabilisation/price maintenance, not merely ordinary trading.
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 respect to stabilising action undertaken with:
- (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 practical terms, Section 3 provides that the statutory prohibitions in Sections 197 and 198—whatever their exact wording—are displaced for the specified stabilising conduct, but only if all conditions are satisfied:
- Time condition: the stabilising action must occur within 30 days from the date of issue of the Notes.
- Instrument condition: the action must be in respect of the defined Notes.
- Actor condition: the action must be taken by J.P. Morgan Securities Inc. or its related corporations (as captured in the definition of “stabilising action”).
- Counterparty condition: the stabilising action must be taken with either (i) persons referenced in section 274 of the Act or (ii) sophisticated investors under section 275(2).
For a practitioner, the counterparty condition is often where compliance work concentrates. It is not enough that the stabiliser is the right entity and the trade is within the right time window; the exemption also depends on who the stabilising trades are conducted with. This means that transaction documentation, order routing, and client classification processes should be aligned to the Act’s definitions.
Finally, the Regulations are made by the Monetary Authority of Singapore (MAS) on 18 July 2005 and signed by Heng Swee Keat, Managing Director of MAS. This indicates MAS’s formal exercise of its rule-making power under section 337(1) of the Securities and Futures Act.
How Is This Legislation Structured?
The Regulations are structured in a simple, three-section format:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that define the scope of the exemption (the specific Notes and the specific stabilising action and actors).
- Section 3 contains the exemption from specified provisions of the Securities and Futures Act, subject to time and counterparty limitations.
There are no additional parts, schedules, or procedural requirements in the extract provided. The legislative design is therefore “targeted”: it does not create a broad stabilisation regime, but instead carves out a narrow exemption for a particular issuance and stabilisation programme.
Who Does This Legislation Apply To?
Although the Regulations are made under the Securities and Futures Act, their practical application is limited to stabilising activity in relation to the defined Notes. The exemption is relevant primarily to:
- J.P. Morgan Securities Inc. and its related corporations (because they are the only entities whose actions qualify as “stabilising action” under the definition); and
- the counterparties with whom stabilising trades are conducted—specifically persons referenced in section 274 of the Act or sophisticated investors under section 275(2).
For other market participants, the Regulations may still be relevant indirectly—for example, where they need to understand whether stabilising trades could be exempt from certain prohibitions. However, the exemption itself is not a general permission for anyone to stabilise; it is a tailored carve-out for a specific stabiliser, a specific bond issuance, and a specific trading window.
Why Is This Legislation Important?
Even though the Regulations are short, they are significant for market conduct compliance. Stabilising actions can raise regulatory concerns because they may resemble trading that affects price formation. By exempting stabilising conduct from Sections 197 and 198 of the Securities and Futures Act, MAS allows a controlled stabilisation mechanism that supports orderly markets while still maintaining the integrity of the broader market conduct framework.
From a practitioner’s perspective, the value of this instrument lies in its conditional clarity. It provides a defined legal basis to proceed with stabilisation activities—provided that the stabiliser, the Notes, the timing, and the counterparties all match the Regulations. This reduces uncertainty and helps firms structure stabilisation programmes with confidence that the statutory prohibitions will not apply.
At the same time, the narrowness of the exemption means compliance risk remains high if any element is missed. For example, stabilising actions outside the 30-day window, trades involving different securities, or stabilising trades with counterparties that do not fall within section 274 or the “sophisticated investor” definition could expose the firm to the underlying prohibitions in Sections 197 and 198. Accordingly, legal and compliance teams should ensure that:
- the stabilisation programme is documented as being in respect of the specified Notes;
- trade dates are tracked to confirm the 30-day limitation from the date of issue;
- the trading entity is within the defined stabiliser group (J.P. Morgan Securities Inc. and related corporations); and
- counterparty eligibility is verified and evidenced under the Act’s definitions.
In short, this Regulations instrument demonstrates how Singapore’s market conduct regime can accommodate legitimate market practices (like stabilisation) through targeted exemptions rather than broad deregulation.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular Sections 197, 198, 274, 275(2), and the rule-making power in section 337(1)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (legislation timeline reference 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. 33) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.