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 (SFA), specifically section 337(1)
- Citation: SL 78/2004
- Commencement: 25 February 2004
- Enacting Formula: Made by the Monetary Authority of Singapore (MAS) under section 337(1) of the Securities and Futures Act
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory 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. 4) Regulations 2004 is a targeted regulatory instrument. In plain language, it creates a limited exemption from certain market conduct rules in the Securities and Futures Act for specific “stabilising action” undertaken in relation to a particular set of notes.
Stabilisation is a common market practice in securities issuance and trading. When new notes are issued, underwriters or their affiliates may take steps to support or “stabilise” the market price—typically to reduce volatility during the initial trading period. However, market conduct legislation often restricts dealing practices to prevent manipulation. This Regulations bridges that tension by allowing stabilisation in defined circumstances, without triggering the prohibitions that would otherwise apply.
Importantly, the exemption is narrow in both subject matter and time. It is tied to a specific instrument (“Notes” defined in the Regulations) and to a defined stabilising party (Credit Suisse First Boston (Europe) Limited and its related corporations). It also limits the exemption to stabilising actions carried out within a specified window—30 calendar days from the date of issuance.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and states that they come into operation on 25 February 2004. For practitioners, commencement matters because the exemption only becomes available once the Regulations are in force.
Section 2 (Definitions) is central because it defines the scope of the exemption. Two terms are defined:
- “Notes” means 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. This definition is highly specific; it does not cover other notes, other issuers, or other tranches.
- “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 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. This definition clarifies that stabilisation can occur outside Singapore as well, and that the relevant conduct includes not only actual purchases but also offers or agreements to purchase.
Section 3 (Exemption) is the operative provision. It provides that, subject to conditions, sections 197 and 198 of the Securities and Futures Act shall not apply to stabilising action carried out in respect of the defined Notes.
In more practical terms, the exemption is designed to prevent stabilisation activity from being treated as prohibited market conduct under the referenced SFA provisions. While the extract does not reproduce sections 197 and 198, the structure indicates that those sections contain restrictions or prohibitions relevant to market manipulation or improper dealing. The Regulations therefore carve out stabilisation conduct from those prohibitions—so long as the conditions are met.
Section 3(1): Who may be involved—the exemption applies to stabilising action carried out with either:
- a person referred to in section 274 of the Act, or
- a sophisticated investor as defined in section 275(2) of the Act.
This is a significant compliance point. The exemption is not a blanket permission to stabilise in any dealing context. It is conditional on the counterparty category. For a dealer, underwriter, or affiliate seeking to rely on the exemption, it is necessary to confirm that the relevant counterparties fall within the statutory categories in sections 274 and 275(2). In practice, this often requires careful documentation of investor classification and dealing counterparties.
Section 3(2): Time limit—the exemption does not apply to 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 temporal limitation is absolute. Even if the counterparty is eligible under section 3(1), stabilisation conducted beyond the 30-day window would fall outside the exemption and could expose the stabilising party to the underlying prohibitions in the SFA.
For practitioners, the key operational question becomes: what is the “date of issuance” for the Notes? The Regulations do not define it. Market participants typically treat the issuance date as the date the notes are issued/settled or otherwise formally dated for issuance. However, because the exemption is time-bound, counsel should ensure that the stabilisation programme is aligned with the correct issuance date and that internal compliance systems can evidence the start and end of the stabilisation period.
How Is This Legislation Structured?
The Regulations are short and structured around a simple framework:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of “Notes” and “stabilising action”.
- Section 3 contains the exemption, including the conditions relating to eligible counterparties and the 30-calendar-day limit.
There are no additional parts or complex schedules in the provided extract. The Regulations function as a targeted carve-out within the broader market conduct regime under the Securities and Futures Act.
Who Does This Legislation Apply To?
Although the Regulations are drafted as a general legal instrument, their practical application is limited to parties that may undertake stabilising action in relation to the defined Notes. The definition of “stabilising action” restricts the stabilising conduct to actions taken by Credit Suisse First Boston (Europe) Limited or its related corporations. Accordingly, the exemption is most relevant to that group and any entity acting within its stabilisation programme.
However, the exemption’s effect also depends on the counterparty involved in the stabilising dealings. Section 3(1) requires that the stabilising action be carried out with a person falling within section 274 of the SFA or with a sophisticated investor under section 275(2). Therefore, the Regulations indirectly impose compliance obligations on how stabilisation trades are executed and documented—particularly around investor classification and dealing counterparties.
Why Is This Legislation Important?
This Regulations is important because it provides a legally sanctioned pathway for stabilisation activities in Singapore (and elsewhere) for a specific issuance. Without such an exemption, stabilising purchases or agreements to purchase could be interpreted as conduct prohibited under the Securities and Futures Act market conduct provisions. The exemption reduces legal uncertainty for underwriters and their affiliates when managing post-issuance price dynamics.
From a practitioner’s perspective, the value lies in the precision of the carve-out. The Regulations do not merely say “stabilisation is allowed.” Instead, they require strict adherence to:
- Instrument scope (only the defined PGN Euro Finance 2003 Limited notes, up to US$200 million, guaranteed by PT Perusahaan Gas Negara (Persero) Tbk);
- Actor scope (Credit Suisse First Boston (Europe) Limited and related corporations);
- Counterparty scope (persons under section 274 or sophisticated investors under section 275(2)); and
- Time scope (no stabilising action after 30 calendar days from issuance).
These conditions are likely to be central in any regulatory review, internal compliance audit, or dispute. If stabilisation is conducted outside the exemption, the stabilising party may face enforcement risk under the underlying SFA provisions (sections 197 and 198). Even within the exemption, market conduct rules often require that stabilisation be conducted in a manner consistent with the purpose of stabilising price and not in a way that constitutes manipulation. Counsel should therefore treat the exemption as necessary but not necessarily sufficient for full compliance with the broader market conduct framework.
Finally, because the Regulations are dated and instrument-specific, they illustrate a broader regulatory approach: MAS may grant exemptions through subsidiary legislation to accommodate market practices while preserving investor protection and market integrity. For lawyers advising on future issuances, this is a useful precedent for how exemptions may be structured—narrowly, with defined counterparties and strict time limits.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the exemption-making power in section 337(1)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (as referenced in the provided metadata)
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.