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 (SFA), specifically section 337(1)
- Legislative Citation: SL 531/2005
- Commencement: 8 August 2005
- Status: Current version (as at 27 March 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. 33) Regulations 2005 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption from market conduct rules in the Securities and Futures Act (SFA) for a specific stabilisation activity involving a specific set of notes.
In plain language, the Regulations recognise that, in certain capital markets transactions, market participants may take steps shortly after issuance to stabilise or maintain the trading price of newly issued debt securities. Such stabilising conduct can be commercially important to support orderly trading and investor confidence. However, stabilisation can also resemble conduct that market conduct rules are designed to prevent (for example, manipulative or misleading trading). The exemption therefore provides a controlled “safe harbour” where stabilising action is permitted, but only if strict conditions are met.
Notably, this is not a general stabilisation regime for all securities. It is a narrow, transaction-specific exemption tied to “Notes” defined in the Regulations—namely, 5-year fixed rate notes due August 2010 issued by Nissay 2005 Fund Global Special Purpose Company, Ltd., up to a principal amount of US$500 million. The exemption also narrows who may take the stabilising action and when it may occur.
What Are the Key Provisions?
Section 1 (Citation and commencement) sets the legal identity of the instrument and its effective date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 33) Regulations 2005” and came into operation on 8 August 2005. For practitioners, this matters because the exemption is time-bound: stabilising action is only exempt if it occurs within the statutory window described in section 3.
Section 2 (Definitions) is central because it defines both the subject matter (“Notes”) and the conduct (“stabilising action”). The definition of “Notes” is highly specific: it refers to 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. This means the exemption cannot be relied upon for other issuances, other maturities, or other note programmes—even if they are economically similar.
The definition of “stabilising action” further narrows the scope. It 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 definition is important for two reasons. First, it identifies the permitted stabiliser(s). Second, it clarifies the type of activity covered: purchases and certain offers/agreements to purchase, for the purpose of stabilisation.
Section 3 (Exemption) is the operative provision. It provides that sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of the Notes within 30 days from the date of issue, provided the stabilising action is taken with a person falling into one of two categories: (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.
From a practitioner’s perspective, section 3 contains three cumulative conditions that must be satisfied to obtain the exemption:
- Condition 1: The activity must be “stabilising action” as defined in section 2—i.e., taken by J.P. Morgan Securities Inc. (or related corporations) and directed at stabilising or maintaining the market price.
- Condition 2: The activity must relate to the defined “Notes”—the specific Nissay 2005 notes programme and principal amount cap.
- Condition 3: Timing and counterparties must fit the exemption—the stabilising action must occur within 30 days from the date of issue, and the stabiliser must deal with either a section 274 person or a sophisticated investor under section 275(2).
The exemption’s design reflects a balancing exercise: it removes the risk that stabilisation would be treated as a breach of general market conduct prohibitions, but it does so only for a limited period and only in dealings with counterparties that are presumed to have a higher level of sophistication or are otherwise within the SFA’s defined categories.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three sections:
Section 1 provides the citation and commencement date.
Section 2 contains definitions that control the scope of the exemption—defining “Notes” and “stabilising action”.
Section 3 sets out the exemption itself, specifying which SFA provisions are disapplied, the time window for stabilising action, and the permitted counterparty categories.
There are no additional parts or schedules in the extract provided. The practical effect is that the Regulations operate as a narrow “switch-off” mechanism: they temporarily remove the application of specified market conduct provisions for a defined stabilisation activity, rather than creating a comprehensive stabilisation framework.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and therefore sit within Singapore’s broader market conduct framework, the exemption is not available to all market participants. It is effectively directed at J.P. Morgan Securities Inc. and its related corporations, because the definition of “stabilising action” is limited to actions taken by those entities.
In addition, the exemption is conditional on the stabiliser dealing with counterparties who meet the SFA-defined categories: either a person referred to in section 274 of the SFA or a sophisticated investor under section 275(2). Accordingly, the Regulations apply to stabilisation conduct in which the stabiliser’s counterparties fall within those categories, and the conduct occurs within the 30-day post-issuance period.
For lawyers advising issuers, arrangers, or dealers, this means the exemption is best understood as a transaction-specific compliance tool. If the stabilising activity is performed by a different dealer, involves different notes, occurs outside the 30-day window, or involves counterparties outside the permitted categories, the exemption will not protect the conduct from the operation of sections 197 and 198 of the SFA.
Why Is This Legislation Important?
This Regulations is important because it clarifies when stabilising conduct—often necessary in the early trading life of a bond—can be undertaken without triggering certain market conduct prohibitions. In practice, stabilisation can involve buying or arranging to buy securities to support price formation. Without an exemption, such conduct might be scrutinised as potentially improper trading or market manipulation.
By disapplying sections 197 and 198 of the SFA for qualifying stabilising action, the Regulations provide legal certainty to the stabilising dealer and the transaction stakeholders. That certainty is particularly valuable in the immediate post-issuance period, when trading activity is most volatile and when stabilisation is most likely to be attempted.
From an enforcement and compliance standpoint, the Regulations also demonstrate how Singapore’s market conduct regime accommodates legitimate market practices while maintaining safeguards. The exemption is narrow: it is limited to specific notes, a specific stabiliser, a specific time window, and dealings with specified counterparty types. This structure reduces the risk that the exemption could be used as a general licence for price support or other conduct that could undermine market integrity.
For practitioners, the key practical takeaway is that reliance on this exemption requires careful documentation and controls. Advisers should ensure that (i) the notes fall within the defined “Notes” description, (ii) the stabiliser is the defined entity (or its related corporations), (iii) the stabilising trades occur within 30 days from the date of issue, and (iv) counterparties are within the section 274 or sophisticated investor categories. Where any element is uncertain, the safer approach is to treat the stabilising trades as potentially subject to the SFA provisions that the exemption would otherwise disapply.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular:
- Sections 197 and 198 (market conduct provisions disapplied by the exemption)
- Section 274 (counterparty category referenced in the exemption)
- Section 275(2) (definition of “sophisticated investor” referenced in the exemption)
- Section 337(1) (authorising provision for making these Regulations)
- Futures Act (referenced in the metadata as related legislation)
- Stabilising Act (referenced in the metadata as related legislation)
- Timeline (legislation timeline reference for version verification)
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.