Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 37) Regulations 2004
- Act Code: SFA2001-S570-2004
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) (SFA)
- Authorising Provision: Section 337(1) of the SFA
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 10 September 2004
- Regulation Number: SL 570/2004
- Status: Current version as at 27 March 2026 (per the provided extract)
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Definitions (“Notes”, “stabilising action”)
- Regulation 3: Exemption from sections 197 and 198 of the SFA
- Regulation 4: Revocation of earlier exemption regulations (No. 13)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 37) Regulations 2004 is a targeted regulatory instrument. In substance, it creates a narrow exemption from certain “market conduct” rules in the Securities and Futures Act (SFA) for specific stabilising activities carried out in relation to a particular issuance of notes.
In plain language, the Regulations recognise that, in some debt capital market transactions, market participants may need to take limited steps to stabilise the trading price of newly issued notes. Without an exemption, those stabilising steps could potentially be treated as prohibited conduct under the SFA. This Regulations therefore permits stabilising action—within defined boundaries—so long as it is carried out in respect of the specified notes and within the specified time window.
The scope is deliberately narrow. The “Notes” are defined by reference to a specific issuer, instrument type, maturity, and maximum principal amount. The “stabilising action” is also defined by reference to a specific stabilising entity (Credit Suisse First Boston (Europe) Limited) and its related corporations, and by the purpose of stabilisation or maintaining market price. This is not a general stabilisation regime; it is a transaction-specific exemption.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) provides the formal citation and states that the Regulations come into operation on 10 September 2004. For practitioners, this matters because the exemption only becomes available from the commencement date, and any stabilising action would need to fall within the regulatory framework from that date onward.
Regulation 2 (Definitions) is central to understanding the exemption’s boundaries. It defines two key terms:
- “Notes” means the 3-year fixed rate notes due September 2007 issued by Union Bank of Philippines for a principal amount of up to US$250 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) Limited (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.
These definitions are not merely descriptive; they operate as gatekeeping criteria. If the instrument is not the defined notes, or if the stabilising actor is not the defined entity (or its related corporations), or if the purpose is not stabilisation/price maintenance, the exemption would not apply.
Regulation 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 respect to stabilising action taken 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.
From a practitioner’s perspective, the exemption has three cumulative constraints:
- Time constraint: the stabilising action must be taken within 30 days from the date of issue.
- Instrument constraint: the action must be in respect of the defined “Notes”.
- Counterparty/eligibility constraint: the stabilising action must be taken with a counterparty falling within the categories in section 274 or with a sophisticated investor under section 275(2).
Although the extract does not reproduce sections 197 and 198, the legislative design indicates that those sections impose market conduct restrictions that could otherwise capture stabilising purchases or related arrangements. The exemption therefore functions as a carve-out: it removes the application of those prohibitions for the specified stabilising conduct, but only within the defined parameters.
Regulation 4 (Revocation) revokes the earlier exemption regulations: “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in Respect of Dealings in Notes) (No. 13) Regulations (G.N. No. S 212/2004)”. This is important for legal certainty. It signals that the regulatory permission landscape for this transaction (or related tranche) is updated and that the earlier instrument is no longer operative.
In practice, revocation provisions matter when advising on historical conduct, compliance recordkeeping, and whether a firm’s reliance on an exemption was valid at the relevant time. Where conduct occurred between the commencement of the earlier regulations and the commencement of this No. 37 instrument, counsel would need to consider the timeline carefully.
How Is This Legislation Structured?
This Regulations is structured as a short, four-regulation instrument:
- Regulation 1: Citation and commencement (sets the effective date).
- Regulation 2: Definitions (defines “Notes” and “stabilising action”).
- Regulation 3: Exemption (carves out the application of SFA sections 197 and 198 for specified stabilising action within a defined period and with specified categories of counterparties).
- Regulation 4: Revocation (removes an earlier, similar exemption regulation).
Because the Regulations are concise, the practitioner’s interpretive work largely involves mapping the defined terms to the SFA provisions referenced (sections 197, 198, 274, and 275(2)). The exemption’s effectiveness depends on that cross-referencing.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action taken by the defined stabilising actor—Credit Suisse First Boston (Europe) Limited or its related corporations—when acting in relation to the defined notes. While the Regulations do not expressly list “regulated persons” in the way some compliance instruments do, the defined “stabilising action” makes clear that the exemption is intended to benefit (and regulate the boundaries of) the stabilisation activity of that specific group.
In addition, the exemption is conditioned on the nature of the counterparty: the stabilising action must be taken with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). Accordingly, the Regulations indirectly affect other parties involved in the transaction by limiting the circumstances in which stabilising purchases can be made without triggering the SFA’s market conduct prohibitions.
Why Is This Legislation Important?
For market participants, the practical importance of this Regulations lies in its role as a compliance “permission slip” for stabilisation. Stabilising transactions can be commercially beneficial: they may reduce volatility immediately after issuance and support orderly trading. However, without a clear exemption, stabilisation could be treated as conduct prohibited under the SFA’s market conduct framework.
This Regulations provides legal certainty by specifying exactly what stabilising conduct is exempted, for which instruments, by whom, and within what timeframe. The transaction-specific nature reduces ambiguity: firms can align their stabilisation programmes, trading instructions, and documentation to the defined “Notes” and “stabilising action”.
From an enforcement and risk perspective, the boundaries are critical. The exemption is limited to stabilising action taken within 30 days from the date of issue. It is also limited to stabilising action involving eligible counterparties (section 274 persons or sophisticated investors). If a firm were to stabilise outside the 30-day window, or with ineligible counterparties, the exemption would likely not apply, exposing the firm to potential regulatory action for conduct that would otherwise be prohibited under sections 197 and 198.
Finally, the revocation of the earlier No. 13 Regulations underscores that reliance must be current. Where firms maintain compliance controls for stabilisation programmes, they should ensure that their legal basis reflects the latest exemption instrument and that internal approvals reference the correct regulation number and effective date.
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 (as referenced in the provided metadata context).
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. 37) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.