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
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Citation: SL 575/2004
- Commencement: 13 September 2004
- Status: Current version (as at 27 March 2026)
- Key Provisions: Section 1 (citation and commencement); Section 2 (definitions); Section 3 (exemption)
- Regulatory 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. 38) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. In plain terms, it creates a limited exemption from certain market conduct rules in the Securities and Futures Act (“SFA”) for specific “stabilising actions” carried out in relation to two defined categories of guaranteed secured notes.
The Regulations respond to a common feature of capital markets transactions: stabilisation activities. When notes are issued, market makers or arrangers may take steps to support or maintain the market price for a short period after issuance. Such actions can help reduce volatility and support orderly trading. However, stabilisation can also resemble conduct that market conduct laws seek to prevent—such as manipulation or improper trading practices. The Regulations therefore carve out a narrow exception, but only for stabilising actions that meet defined conditions and are carried out by specified persons.
Importantly, this is not a general authorisation for any stabilisation activity. It is an exemption that applies only to stabilising actions in respect of the “2007 Notes” and “2010 Notes” (as defined), only within a specified time window (30 days from the date of issue), and only when the stabilising action is taken by a limited class of counterparties (persons referred to in section 274 of the SFA or sophisticated investors as defined in section 275(2) of the SFA).
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal identity and effective date of the Regulations. It states that the Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 38) Regulations 2004” and that they came into operation on 13 September 2004. For practitioners, this matters when assessing whether stabilising conduct occurred within the regulatory framework and whether any enforcement analysis turns on the timing of the exemption.
Section 2 (Definitions) is central because the exemption is only as broad as the defined terms. The Regulations define:
- “2007 Notes”: 3-year fixed rate guaranteed secured notes due September 2007, issued by MGTI Finance Company Ltd for 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 for 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 (respectively) in order to stabilise or maintain the market price of those notes in Singapore or elsewhere.
Two practical implications follow from these definitions. First, the exemption is transaction-specific: it is tied to particular note instruments with specified issuer, maturity, currency denomination (as described), and guarantee structure. Second, the exemption is participant-specific: only DBS Bank Ltd., UBS Limited, and their related corporations can perform the relevant “stabilising action” for the exemption to be engaged.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of the 2007 Notes or 2010 Notes, within 30 days from the date of issue of the relevant notes, provided the stabilising action is taken with:
- (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.
While the extract does not reproduce sections 197 and 198, the structure indicates that those sections contain market conduct prohibitions that would otherwise capture stabilisation-like trading. The Regulations therefore suspend the application of those prohibitions for the specified stabilising conduct, but only if the stabilisation is conducted within the strict temporal and counterparty limits.
For a lawyer advising an issuer, arranger, or dealer, the most important compliance questions are therefore: (1) whether the notes in question fall within the defined “2007 Notes” or “2010 Notes”; (2) whether the trading activity qualifies as “stabilising action” (including the requirement that it is taken by DBS/UBS or their related corporations and is intended to stabilise or maintain market price); (3) whether the activity occurred within 30 days from the date of issue; and (4) whether the counterparties are within the permitted categories (section 274 persons or sophisticated investors).
How Is This Legislation Structured?
The Regulations are concise and structured as a short set of provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions for the instruments and the stabilisation concept, including the identities of the banks and the note characteristics.
- Section 3 contains the exemption, specifying which SFA provisions are disapplied, the time window, and the permitted counterparty categories.
From a practitioner’s perspective, the Regulations operate like a “switch”: once the factual matrix matches the definitions and conditions, the disapplication of sections 197 and 198 is triggered. There are no additional reporting, procedural, or disclosure requirements stated in the extract; however, other parts of the SFA and related MAS requirements may still impose obligations on market participants.
Who Does This Legislation Apply To?
The exemption is designed to benefit market participants who conduct stabilising activities in relation to the defined notes. Although the Regulations do not explicitly list “regulated persons” in a general way, the definition of “stabilising action” confines the relevant conduct to actions taken by DBS Bank Ltd., UBS Limited, or their related corporations. Accordingly, these entities (and their related corporations) are the practical users of the exemption.
In addition, the exemption is conditional on the identity of the counterparty. Stabilising actions must be taken with either (i) a person referred to in section 274 of the SFA or (ii) a sophisticated investor under section 275(2). This means that even if the stabilising activity is performed by DBS/UBS (or related corporations), the exemption may not apply if the trades are executed with counterparties outside those categories. Lawyers should therefore pay close attention to trade documentation, counterparty classification, and evidence of investor status.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct framework balances two competing policy objectives: (1) preventing improper trading and market manipulation, and (2) allowing legitimate market practices that support orderly trading in connection with securities issuance. Stabilisation can be commercially valuable, but it can also create risks of misleading price signals. By disapplying specific SFA provisions only for a narrow set of circumstances, the Regulations provide legal certainty for stabilisation activities that are intended to be stabilising rather than manipulative.
For practitioners, the exemption is also a reminder that market conduct compliance is highly fact-specific. The exemption is not triggered merely by the existence of “stabilising” intent. It depends on defined note instruments, defined participants, a strict 30-day window, and permitted counterparty categories. In enforcement scenarios, these elements often become the focal point: whether the conduct fits the exemption precisely enough to avoid the underlying prohibitions.
Finally, the Regulations’ targeted nature makes it particularly relevant in transaction documentation and regulatory strategy. Deal teams should ensure that stabilisation plans, trading limits, and counterparty selection are aligned with the exemption. Where stabilisation is contemplated, counsel should coordinate with compliance teams to confirm: the issue date for the 2007/2010 Notes; the start and end of the 30-day period; the identity of the executing entity (DBS/UBS or related corporation); and the classification of counterparties as section 274 persons or sophisticated investors.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 274, 275(2), and the authorising power in section 337(1)
- Futures Act (as referenced in the platform metadata)
- Stabilising Act (as referenced in the platform metadata)
- Timeline (legislation versioning reference)
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.