Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 4) Regulations 2006
- Act Code: SFA2001-S65-2006
- 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 65/2006
- Commencement: 1 February 2006
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “Notes” and “stabilising action”)
- Section 3: Exemption from Sections 197 and 198 of the Securities and Futures Act for specified stabilising action
- Schedule: Identifies “relevant subsidiaries”
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 4) Regulations 2006 (“Stabilising Action (Notes) Regulations”) is a targeted exemption instrument made under the Securities and Futures Act (SFA). In plain terms, it allows certain market participants to take “stabilising action” in relation to a specific bond issuance—without being caught by particular market conduct prohibitions in the SFA—provided strict conditions are met.
Stabilisation is a common feature of securities issuance. When new notes are issued, market prices can be volatile. Stabilising activities are intended to support orderly trading and reduce extreme price swings during the initial trading period. However, stabilisation can resemble conduct that market conduct rules seek to prevent (for example, manipulative or deceptive trading). The SFA therefore contains prohibitions that may otherwise restrict stabilisation.
This Regulations package resolves that tension by carving out a narrow exemption for stabilising action in respect of a defined set of “Notes” (a particular US$ 10-year senior notes issuance by C&M Finance Ltd., guaranteed by C&M Co., Ltd. and specified relevant subsidiaries). The exemption is time-limited (within 30 days from the date of issue) and is limited to stabilising action undertaken by a specified stabiliser (Goldman Sachs (Asia) L.L.C. and its related corporations) and to specified categories of counterparties and acquisition thresholds.
What Are the Key Provisions?
1. Definitions that tightly scope the exemption (Section 2)
The Regulations are drafted to be highly specific. Section 2 defines “Notes”, “relevant subsidiaries”, and “stabilising action”. The definition of “Notes” is not generic; it identifies a particular instrument: US$ 10-year fixed rate senior notes due February 2016 issued by C&M Finance Ltd. for a principal amount of up to US$700 million, guaranteed by C&M Co., Ltd. and its relevant subsidiaries. This means the exemption is not available for other issuances, even if they are similar in structure or size.
“Stabilising action” is also narrowly defined. It refers to actions taken in Singapore or elsewhere by Goldman Sachs (Asia) L.L.C. (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. This definition is critical for practitioners: it limits who may conduct stabilisation and what conduct counts as stabilisation for exemption purposes.
2. The exemption from SFA market conduct provisions (Section 3)
Section 3 is the operative provision. It states that Sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with respect to specified categories of persons.
Although the extract does not reproduce Sections 197 and 198, their reference is central. In practice, these sections are part of the SFA’s market conduct framework that addresses improper dealing and trading behaviour. The exemption therefore functions as a legal “permission” to engage in stabilisation conduct that would otherwise be prohibited.
3. Who may be the counterparty / acquisition route (Section 3(a)–(c))
Section 3 conditions the exemption on the stabilising action being undertaken with one of three categories of persons:
- (a) an institutional investor;
- (b) a relevant person as defined in Section 275(2) of the SFA; or
- (c) a person who acquires the Notes as principal, provided the consideration for the acquisition is not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
For practitioners, this is a key compliance point. The exemption is not a blanket authorisation for stabilising action against any market participant. It is limited to institutional investors, “relevant persons” under the SFA framework, and principal acquirers meeting a minimum consideration threshold. The $200,000 threshold is designed to ensure that the exemption does not facilitate stabilisation involving small retail-sized transactions that could raise investor protection concerns.
4. Time limitation (30 days from issue)
The exemption is explicitly limited to stabilising action taken within 30 days from the date of issue of the Notes. This temporal restriction is often the most operationally important condition. Market participants must therefore implement controls to ensure that any stabilisation buying (or offers/agreements to buy) occurs only within the permitted window.
How Is This Legislation Structured?
The Regulations are structured in a conventional subsidiary legislation format with a short set of provisions and a schedule:
- Section 1 (Citation and commencement): provides the legal name and the commencement date (1 February 2006).
- Section 2 (Definitions): sets out the key terms that determine the scope of the exemption, including the specific “Notes” and the definition of “stabilising action”.
- Section 3 (Exemption): provides the exemption from SFA Sections 197 and 198, subject to the 30-day period and the categories of persons in Section 3(a)–(c).
- The Schedule (Relevant Subsidiaries): lists the entities that qualify as “relevant subsidiaries” for the purpose of the guarantee structure described in the definition of “Notes”.
Notably, the Regulations are not divided into parts. They are a compact instrument, reflecting their purpose as a targeted exemption for a particular issuance and stabilisation programme.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in respect of the defined Notes, but the practical beneficiaries and regulated actors are narrower than the text might initially suggest. The exemption is available only for stabilising action taken by Goldman Sachs (Asia) L.L.C. or its related corporations, as defined in Section 2. Accordingly, other dealers or arrangers cannot rely on this exemption unless they fall within the defined stabiliser group.
In addition, the exemption is conditioned on the stabilising action being conducted with institutional investors, “relevant persons” (as defined in the SFA), or principal acquirers meeting the $200,000 minimum consideration threshold. Therefore, even where the stabiliser is within scope, the counterparty and transaction structure must satisfy the statutory conditions.
Why Is This Legislation Important?
This Regulations instrument is important because it demonstrates how Singapore’s market conduct regime balances two competing objectives: (1) preventing manipulative or improper trading, and (2) allowing legitimate market stabilisation during securities issuance. By exempting stabilising action from specified SFA prohibitions, the Regulations enable underwriting and stabilisation practices that support orderly markets, while still imposing guardrails.
For legal practitioners, the key value lies in the precision of the exemption. The Regulations are not a general stabilisation licence. They are a narrow, issuance-specific exemption with defined parties, defined instruments, and defined transaction parameters. This means that compliance analysis must be fact-intensive: counsel should verify the identity of the Notes, the stabiliser entity, the timing (within 30 days from issue), and the counterparty category and consideration threshold.
From an enforcement and risk perspective, the exemption’s conditions also define the boundaries of permissible conduct. If stabilising action occurs outside the 30-day window, involves counterparties outside Section 3(a)–(c), or is undertaken by an entity not captured by the definition of “stabilising action”, the exemption may not apply. In such cases, the underlying SFA provisions (Sections 197 and 198) could be engaged, potentially exposing the stabiliser and related parties to regulatory action or other legal consequences.
Finally, the Regulations are a useful example of how subsidiary legislation can tailor exemptions to specific market transactions. Practitioners advising issuers, lead managers, or stabilising agents should treat such instruments as part of the broader “market conduct” compliance package for offerings, particularly where stabilisation or similar activities are contemplated.
Related Legislation
- Securities and Futures Act (Cap. 289): In particular, Sections 197 and 198 (market conduct provisions referenced for exemption) and Section 337(1) (authorising power), as well as Section 275(2) (definition of “relevant person”).
- Futures Act: Listed as related legislation in the metadata context.
- Stabilising Act: Listed as related legislation in the metadata context.
- Timeline / Legislation timeline: Used to confirm the applicable version as at 27 March 2026.
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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.