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)
- Authorising Provision: Section 337(1) of the Securities and Futures Act
- Commencement: 25 February 2004
- Status: Current version as at 27 March 2026 (per provided extract)
- Regulation Number: SL 78/2004
- Key Provisions: Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
- Relevant Market Conduct Provisions Exempted: Sections 197 and 198 of the Securities and Futures Act
- Defined Instruments: “Notes” (specific guaranteed fixed rate senior notes due 2014)
- Defined Activity: “Stabilising action” (specified stabilisation by Credit Suisse First Boston (Europe) Limited and related corporations)
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 Exemption Regulations”) is a targeted regulatory instrument that creates a narrow exemption from certain market conduct rules under the Securities and Futures Act (the “SFA”). In plain terms, it allows specified market participants to carry out stabilisation activities in relation to a particular bond issuance—without breaching the general prohibitions in the SFA—provided strict conditions are met.
Stabilisation is a common feature of certain debt offerings. When new notes begin trading, the market price may be volatile. A stabilising party may therefore buy (or offer to buy) the notes for the purpose of supporting or maintaining the market price. While stabilisation can be legitimate, regulators impose controls to prevent manipulation or misleading conduct. This legislation addresses that tension by carving out an exemption for stabilising action, but only for a defined set of notes, a defined stabiliser, and within defined limits.
Importantly, this is not a general stabilisation framework for all securities. It is an “exemption for stabilising action in respect of dealings in notes” that is tied to a specific issuance: guaranteed fixed rate senior notes due 2014 issued by PGN Euro Finance 2003 Limited (up to US$200 million), guaranteed by PT Perusahaan Gas Negara (Persero) Tbk. The exemption is therefore best understood as a bespoke regulatory permission for a particular transaction and stabilisation programme.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) provides the legal identity and timing 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. 4) Regulations 2004” and that they come into operation on 25 February 2004. For practitioners, commencement matters because market conduct compliance is often assessed by reference to the time when trading or offers occurred.
Regulation 2 (Definitions) is central because it tightly scopes both the instrument and the activity. The Regulations define:
- “Notes” as the 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.
- “stabilising action” as an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) Limited (or any of its related corporations) to buy, or 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 determine whether the exemption is available. If the stabilisation activity is not carried out by the specified entity (or its related corporations), or if it is not in respect of the defined “Notes,” the exemption would not apply. Likewise, the purpose of the action must be to stabilise or maintain market price.
Regulation 3 (Exemption) is the operative provision. It provides that, subject to paragraph (2), sections 197 and 198 of the SFA shall not apply to stabilising action carried out in respect of any of the Notes with certain counterparties. The practical effect is that the stabilising party is shielded from the application of those specific SFA market conduct provisions, but only in the circumstances described.
Under Regulation 3(1), the exemption applies to stabilising action carried out with either:
- a person referred to in section 274 of the SFA; or
- a sophisticated investor as defined in section 275(2) of the SFA.
Although the extract does not reproduce sections 274 and 275(2), the legal significance is clear: the exemption is limited to dealings with particular categories of persons. In market conduct regulation, such categories typically correspond to investors who are considered to have greater capacity to understand risks and market practices, or who are subject to regulatory safeguards. For a practitioner, the key compliance task is to verify the counterparty’s status and ensure that stabilising trades are conducted only with eligible persons.
Regulation 3(2) (Time limitation) imposes a further and strict condition: the exemption does 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 issuance of the Notes. This is a classic stabilisation control: it limits the duration of price-support activity to a short window around issuance, reducing the risk that stabilisation becomes a continuing market manipulation strategy.
For legal and compliance teams, the time limitation requires careful recordkeeping. The “date of issuance” must be identified precisely (e.g., as stated in the offering documentation or issuance notice), and the 30-calendar-day period must be monitored across time zones and trading days. Any stabilising activity beyond that window would fall back under the general SFA market conduct regime, exposing the stabiliser to potential regulatory breach.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three substantive provisions:
- Regulation 1 sets out the citation and commencement.
- Regulation 2 provides definitions that define the scope of “Notes” and “stabilising action.”
- Regulation 3 contains the exemption, including both eligibility conditions (counterparty categories) and a temporal restriction (30 calendar days from issuance).
There are no additional parts or complex schedules in the extract. The brevity is itself a feature: the Regulations function as a targeted carve-out from specified SFA provisions for a specific transaction and stabilisation programme.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to the extent that a party undertakes “stabilising action” as defined. The definition of stabilising action is anchored to Credit Suisse First Boston (Europe) Limited and its related corporations. Therefore, the exemption is primarily relevant to that stabilising party and its corporate group entities that may execute stabilisation trades.
However, the exemption also depends on who the stabilising party deals with. Regulation 3(1) limits the exemption to stabilising action carried out with persons falling within section 274 of the SFA or with sophisticated investors under section 275(2). Accordingly, the Regulations indirectly impose compliance obligations on the stabiliser to ensure that counterparties are correctly classified and that trades are not executed with ineligible persons.
Why Is This Legislation Important?
This legislation is important because it enables a controlled form of market support in a specific bond issuance while preserving the integrity of Singapore’s market conduct regime. Without such an exemption, stabilisation activities could potentially trigger prohibitions or restrictions under the SFA—particularly those designed to prevent market manipulation or misleading trading practices.
For practitioners advising issuers, arrangers, or stabilising agents, the Regulations provide a clear legal pathway: stabilising action in respect of the defined Notes can be conducted without the application of sections 197 and 198, but only if the counterparty eligibility and the 30-day limit are satisfied. This reduces legal uncertainty and supports the operational planning of stabilisation programmes.
From an enforcement and risk perspective, the conditions are the heart of the instrument. The exemption is not a blanket permission. It is conditional on (i) the identity of the stabiliser (as defined), (ii) the identity/status of the counterparties (section 274 persons or sophisticated investors), and (iii) the timing of the stabilisation (no stabilising action after 30 calendar days from issuance). Any deviation—such as trading with an ineligible counterparty or continuing stabilisation beyond the permitted period—could expose the stabiliser to regulatory action under the general SFA provisions that the exemption otherwise displaces.
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 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. 4) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.