Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 38) Regulations 2004
- Act Code: SFA2001-S575-2004
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Power Used: Section 337(1) of the Securities and Futures Act
- Commencement: 13 September 2004
- Enacting Body: Monetary Authority of Singapore (MAS)
- Regulation Number: SL 575/2004
- Key Provisions: Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
- Status: Current version as at 27 March 2026 (per the provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 38) Regulations 2004 is a targeted regulatory instrument. In plain terms, it creates a specific exemption from certain “market conduct” rules in the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to two particular categories of guaranteed secured notes: the “2007 Notes” and the “2010 Notes”.
Stabilising action is a practice commonly used in securities offerings to help manage short-term price volatility after issuance. Typically, stabilisation involves buying (or offering to buy) the relevant securities during a limited period so that the market price does not fall below a level that could be disruptive to the offering. However, stabilisation can overlap with conduct that, absent an exemption, may be treated as prohibited market manipulation or otherwise restricted dealing.
This Regulations’ core function is therefore to carve out a narrow safe harbour: it states that specified SFA provisions (sections 197 and 198) do not apply to stabilising action taken in respect of the 2007 Notes and 2010 Notes, provided the stabilising activity meets the conditions set out in the Regulations—most importantly, the timing (within 30 days from the date of issue) and the identity of the persons involved (either a category of persons under section 274 of the SFA or a “sophisticated investor” under section 275(2) of the SFA).
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is procedural. It confirms the short title and provides that the Regulations came into operation on 13 September 2004. For practitioners, this matters mainly for determining the regulatory framework applicable to stabilisation activities around the issuance timeline of the relevant notes.
Regulation 2 (Definitions) is central because the exemption is only available for stabilising action that fits precisely within the defined terms. The Regulations define:
- “2007 Notes”: 3-year fixed rate guaranteed secured notes due September 2007, issued by MGTI Finance Company Ltd up to US$150 million, guaranteed by PT Mitra Global Telekomunikasi Indonesia and MGTI Finance B.V.
- “2010 Notes”: 6-year fixed rate guaranteed secured notes due September 2010, issued by MGTI Finance Company Ltd up to US$200 million, guaranteed by PT Mitra Global Telekomunikasi Indonesia and MGTI Finance B.V.
- “stabilising action”: an action taken in Singapore or elsewhere by DBS Bank Ltd., UBS Limited, or any of their related corporations, to buy, or to offer or agree to buy, any of the 2007 Notes or 2010 Notes (as applicable) in order to stabilise or maintain the market price of those notes in Singapore or elsewhere.
Two practical points follow from these definitions. First, the exemption is instrument-specific: it is tied to these particular note programmes and their stated issuer/guarantors and principal caps. Second, the exemption is participant-specific: stabilising action must be carried out by DBS Bank Ltd., UBS Limited, or their related corporations. This means that other dealers or market participants cannot automatically rely on the exemption unless they fall within the defined stabiliser group.
Regulation 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 2007 Notes or 2010 Notes, within 30 days from the date of issue of the relevant notes, with stabilising action being carried out with one of the following counterpart categories:
- a person referred to in section 274 of the SFA; or
- a “sophisticated investor” as defined in section 275(2) of the SFA.
In effect, Regulation 3 establishes a limited exemption from the SFA’s market conduct prohibitions for stabilisation trades, but only when the trades occur within a defined post-issuance window and involve counterparties that meet the SFA’s specified categories. The “within 30 days” requirement is particularly important for compliance: stabilising activity outside that period would fall outside the exemption and could expose the stabiliser to the underlying prohibitions in sections 197 and 198.
Although the extract does not reproduce sections 197 and 198 themselves, the practitioner takeaway is clear: the Regulations are designed to prevent the stabilisation mechanism from being treated as unlawful market conduct, but only within the carefully bounded circumstances described.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Regulation 1 sets out the citation and commencement.
- Regulation 2 provides definitions that precisely identify the notes and the stabilising actors and conduct.
- Regulation 3 contains the exemption, specifying the SFA provisions excluded, the time window (30 days), and the permitted counterparty categories (section 274 persons or sophisticated investors).
There are no additional Parts or complex schedules in the provided extract. This “lean” structure is typical of bespoke exemptions: the legal effect is achieved by defining the relevant securities and stabilising conduct, then carving out the exemption with strict conditions.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined notes (the 2007 Notes and 2010 Notes) and to stabilisers who fall within the defined group: DBS Bank Ltd., UBS Limited, or their related corporations. In practice, this means the exemption is relevant primarily to the banks and their corporate affiliates that may conduct stabilisation as part of the issuance process.
However, Regulation 3 also imposes conditions relating to the counterparty category—stabilising action must be taken “with” either a person referred to in section 274 of the SFA or a sophisticated investor under section 275(2). Therefore, the exemption’s availability depends not only on who is stabilising, but also on the counterparties involved in the stabilising transactions.
Why Is This Legislation Important?
This Regulations is important because it addresses a recurring tension in securities regulation: stabilisation can be commercially useful and market-practice standard, but it can also resemble conduct that regulators seek to deter. By exempting stabilising action from sections 197 and 198 of the SFA, MAS provides legal certainty for stabilisation activities that are conducted in a controlled and limited manner.
For practitioners, the key compliance implications are:
- Time-limited safe harbour: stabilising action must occur within 30 days from the date of issue. Firms should implement trade monitoring and recordkeeping to ensure stabilisation does not drift beyond the permitted window.
- Strict eligibility of instruments: the exemption is limited to the defined 2007 Notes and 2010 Notes. If the notes differ in material terms (issuer, guarantees, maturity, or principal amount), the exemption may not apply.
- Strict eligibility of stabilisers: only DBS Bank Ltd., UBS Limited, or their related corporations can perform “stabilising action” as defined. Other entities should not assume they can rely on the exemption.
- Counterparty constraints: stabilising action must be taken with persons falling within section 274 or with sophisticated investors under section 275(2). This requires careful counterpart classification and documentation.
From an enforcement perspective, the exemption reduces regulatory risk for compliant stabilisation, but it does not immunise conduct outside the exemption’s boundaries. If stabilisation is conducted outside the 30-day period, by an ineligible entity, in relation to non-covered notes, or with counterparties outside the permitted categories, the underlying prohibitions in sections 197 and 198 may apply. Accordingly, legal review of stabilisation programmes and transaction workflows is essential.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, and 275(2)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- 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. 38) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.