Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 4) Regulations 2004
- Act Code: SFA2001-S78-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Citation and commencement: Commenced on 25 February 2004
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory status (as provided): Current version as at 27 March 2026
- Legislative instrument number: SL 78/2004
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 4) Regulations 2004 (“Stabilising Action (Notes) Regulations”) is a targeted regulatory exemption under Singapore’s Securities and Futures Act (SFA). In essence, it carves out a narrow permission for certain “stabilising actions” taken in connection with a specific bond issuance—so that market stabilisation activities can occur without triggering particular market conduct prohibitions.
In plain terms, when new securities are issued, market participants sometimes undertake stabilisation measures to help manage short-term price volatility and liquidity conditions. However, stabilisation can overlap with conduct rules designed to prevent manipulation or misleading market signals. This legislation addresses that tension by exempting stabilising actions relating to a defined set of “Notes” and carried out by specified persons, but only within strict limits.
The Regulations are not a general stabilisation regime for all securities. They are an instrument tailored to a particular issuance: guaranteed fixed rate senior notes due 2014 issued by PGN Euro Finance 2003 Limited, guaranteed by PT Perusahaan Gas Negara (Persero) Tbk. The exemption is therefore best understood as a “deal-specific” regulatory relief, rather than a broad policy framework.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal citation and the date the Regulations came into force. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 4) Regulations 2004” and they came into operation on 25 February 2004. For practitioners, this matters when assessing whether stabilisation activity occurred within the legal window.
Section 2 (Definitions) defines two critical terms that control the scope of the exemption: “Notes” and “stabilising action”. The definition of “Notes” is highly specific. It refers to “guaranteed fixed rate senior notes due 2014” issued by PGN Euro Finance 2003 Limited for a principal amount of up to US$200 million, guaranteed by PT Perusahaan Gas Negara (Persero) Tbk. This specificity is central: stabilisation activities in respect of other instruments, even if similar in nature, would not automatically fall within the exemption.
The definition of “stabilising action” is also narrow. It 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. The inclusion of “offer or agree to buy” is particularly relevant for compliance: it captures not only actual purchases but also conditional commitments that may be part of a stabilisation strategy.
Section 3 (Exemption) is the operative provision. It provides that, subject to paragraph (2), sections 197 and 198 of the SFA shall not apply to any stabilising action carried out in respect of the defined Notes with respect to stabilisation carried out in relation to either:
- (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.
While the text provided does not reproduce sections 197 and 198, the legal effect is clear: the exemption prevents those SFA market conduct prohibitions from applying to the specified stabilising actions, but only when the stabilisation is conducted with the specified categories of counterparties. For practitioners, this means that the exemption is not simply about the issuer and the stabiliser—it is also about who the stabiliser is dealing with.
Section 3(2) imposes a strict time limit: the exemption “shall not apply to any stabilising action carried out at any time after the expiry of the period of 30 calendar days from the date of the issuance of the Notes.” This is a bright-line compliance constraint. Even if the stabiliser and the Notes match the definitions, stabilisation activity occurring after the 30-day period would fall outside the exemption and could expose the conduct to the underlying prohibitions in sections 197 and 198.
Finally, the Regulations include the making date and signature of the MAS Managing Director, which confirms the instrument’s formal adoption. For legal work, this can support document authenticity and version control when advising on historical conduct.
How Is This Legislation Structured?
The Regulations are concise and structured as a short instrument with three substantive components:
- Section 1: Citation and commencement (when the Regulations take effect).
- Section 2: Definitions (what counts as “Notes” and “stabilising action”).
- Section 3: Exemption (what SFA provisions are disapplied, for whom, and for how long).
There are no additional parts or complex schedules in the extract provided. The legislative design is therefore “definition-driven”: once the practitioner confirms that the security and stabilisation conduct match the definitions, the exemption analysis turns on counterparty category and the 30-day time window.
Who Does This Legislation Apply To?
The Regulations apply to stabilising actions in respect of the defined Notes, when those actions are taken by Credit Suisse First Boston (Europe) Limited or its related corporations. This is a person-specific exemption: other market participants would not be covered unless they fall within the defined stabiliser category (including related corporations, as contemplated by the definition).
Additionally, the exemption is conditional on the stabilising action being carried out with a counterparty that falls within section 274 of the SFA or with a sophisticated investor under section 275(2). Practically, this means that even if stabilisation is performed by the permitted stabiliser, the exemption may not apply if the stabilisation involves counterparties outside those categories. For compliance, counsel should therefore verify not only the stabiliser and the Notes, but also the identity and regulatory status of the persons involved in the relevant transactions.
Why Is This Legislation Important?
This instrument is important because it demonstrates how Singapore regulates market conduct while still permitting legitimate market stabilisation in controlled circumstances. Stabilisation activities can be commercially valuable during a bond issuance, but they can also create risks of perceived or actual market manipulation. By disapplying specified SFA provisions for a limited period and defined counterparties, the Regulations aim to strike a balance between market integrity and practical issuance mechanics.
From a legal practitioner’s perspective, the key significance lies in the precision of the exemption. The Regulations are not a general safe harbour. They are limited by: (i) the specific Notes (issuer, instrument type, maturity, guarantee, and principal amount cap); (ii) the specific stabiliser (Credit Suisse First Boston (Europe) Limited and related corporations); (iii) the counterparty category (section 274 persons or sophisticated investors); and (iv) a hard 30-calendar-day limit from issuance.
In enforcement and compliance terms, this structure reduces ambiguity. If a stabilisation programme is within the defined parameters, counsel can advise that sections 197 and 198 of the SFA do not apply to those stabilising actions. Conversely, if any element falls outside the definitions—such as stabilisation after the 30-day period, dealing with counterparties outside the specified categories, or stabilisation in respect of different notes—then the exemption would not apply, and the underlying market conduct rules could be engaged.
Practically, this means that advice should typically include a transaction-by-transaction mapping exercise: confirming the instrument identity, the stabiliser’s role, the timing relative to the issuance date, and the counterparty status. Documentation should reflect the stabilisation rationale (maintaining market price) and the operational steps taken to ensure the exemption conditions are met.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the metadata timeline context)
- Stabilising Act (as referenced in the metadata timeline 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. 4) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.