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), specifically section 337(1)
- Citation: SL 65/2006
- Commencement: 1 February 2006
- Status: Current version as at 27 March 2026
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption); Schedule (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”) creates a targeted exemption from certain market conduct rules under the Securities and Futures Act (the “SFA”). In plain terms, it allows specified parties to conduct “stabilising action” in relation to a particular issuance of notes without breaching the general prohibitions that would otherwise apply.
Stabilising action is a common feature of certain securities offerings. During and shortly after an issuance, market makers or arrangers may take steps intended to support orderly trading and reduce excessive volatility. However, stabilising activity can overlap with conduct that regulators treat as potentially manipulative. The SFA therefore contains restrictions designed to prevent market abuse. This subsidiary legislation carves out a narrow exception for stabilising action in respect of a defined set of notes, subject to strict conditions.
Importantly, the exemption is not general. It is tied to a specific instrument (US$ 10-year fixed rate senior notes due February 2016) and to a defined stabiliser (Goldman Sachs (Asia) L.L.C. and its related corporations). It also limits the time window for permitted stabilising activity and restricts who may be counterparties to the relevant transactions.
What Are the Key Provisions?
1. Definitions (Section 2)
The Regulations define the scope of the exemption through four core terms: “Notes”, “relevant subsidiaries”, “securities”, and “stabilising action”. The definition of “Notes” is highly specific: it refers to 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 instrument-specific; it does not automatically extend to other tranches, other maturities, or different issuers.
The definition of “stabilising action” is also narrow. It covers 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 to stabilise or maintain the market price of the Notes in Singapore or elsewhere. Practitioners should note that the definition includes not only actual purchases but also offers and agreements to buy—so contractual commitments and conditional arrangements may fall within the definition if they are part of a stabilisation strategy.
2. The exemption from Sections 197 and 198 (Section 3)
The operative provision is Section 3. 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 of the Notes, with specified counterparty categories.
While the extract does not reproduce Sections 197 and 198, the practical effect is clear: those provisions are the SFA’s market conduct prohibitions that would otherwise restrict or prohibit certain dealing activities that could be characterised as market manipulation or improper conduct. The Regulations therefore provide a legal “safe harbour” for stabilising action, but only when the conditions are met.
3. Timing requirement: within 30 days from issue
A critical condition is the temporal limitation: the stabilising action must be taken “within 30 days from the date of issue of the Notes”. This is a compliance checkpoint. Market participants should ensure that their stabilisation programme is documented with clear start and end dates, and that any purchases, offers, or agreements to buy are tracked against the 30-day window.
4. Counterparty and transaction value conditions
Section 3 permits stabilising action only when it is taken “with” one of three categories of persons:
- (a) an institutional investor;
- (b) a relevant person as defined in section 275(2) of the Act;
- (c) a person who acquires the Notes as principal, provided that the consideration 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, the most operationally significant element is the $200,000 minimum consideration for principal acquisitions. This threshold is designed to exclude small retail-type transactions from the exemption. It also means that the exemption’s availability may depend on deal documentation and valuation mechanics—particularly where consideration is paid by exchange of securities or other assets rather than cash. Firms should ensure that transaction records clearly evidence the consideration per transaction and the method used to determine its value in the relevant currency.
5. The stabiliser is effectively pre-identified
Because “stabilising action” is defined by reference to Goldman Sachs (Asia) L.L.C. and its related corporations, the exemption is functionally tied to that stabilising group. Even if other market participants wish to stabilise the same Notes, the exemption’s definition suggests they would not fall within the “stabilising action” concept unless they are within the defined stabiliser group (or otherwise can rely on a different exemption or authorisation).
6. Enacting and making date
The Regulations were made on 27 January 2006 by the Monetary Authority of Singapore (MAS), with the signature of HENG SWEE KEAT, Managing Director, MAS. The citation and commencement clause confirms operation from 1 February 2006. For legal research and compliance audits, this helps establish the regulatory framework applicable at the time of the relevant issuance and stabilisation period.
How Is This Legislation Structured?
The Regulations are structured in a short, practical format:
- Section 1 (Citation and commencement): provides the short title 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): contains the operative safe harbour, specifying the SFA provisions excluded (Sections 197 and 198), the 30-day time limit, and the categories of persons with whom stabilising action may be taken.
- The Schedule (Relevant subsidiaries): lists the entities that are “relevant subsidiaries” of C&M Co., Ltd. for purposes of the guarantee structure described in the definition of “Notes”.
From a practitioner’s perspective, the Regulations are best read as a compliance instrument: they define the exact product, the exact stabiliser, the exact time window, and the exact counterparties/transaction value conditions that must be satisfied to rely on the exemption.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined Notes. In practice, this concerns the arranger/lead manager or stabilising agent (here, Goldman Sachs (Asia) L.L.C. and its related corporations) and any persons transacting with them in the stabilisation context. The exemption is triggered only when the stabilising action is taken by the defined stabiliser and within the specified period.
Additionally, the exemption is conditioned on who the stabilising transactions are “with”: institutional investors, “relevant persons” under section 275(2) of the SFA, or principal acquirers meeting the $200,000 minimum consideration threshold. Therefore, the Regulations indirectly affect counterparties as well—particularly where a counterparty’s status or transaction size determines whether the stabilising activity can be treated as exempt.
Why Is This Legislation Important?
This subsidiary legislation is important because it provides regulatory certainty for a specific market practice—stabilisation—while maintaining the integrity of Singapore’s market conduct regime. Without such an exemption, stabilising purchases or related dealing arrangements could expose firms to potential liability under the SFA’s market conduct prohibitions. The Regulations therefore facilitate orderly capital markets activity by allowing stabilisation within controlled parameters.
For legal and compliance teams, the Regulations highlight how exemptions under the SFA are often highly tailored. The instrument-specific definition of “Notes” and the stabiliser-specific definition of “stabilising action” mean that reliance on the exemption requires careful factual alignment. A practitioner should not assume that stabilisation in another offering, even by the same bank, is automatically covered.
Practically, the most significant compliance risks are (i) timing (ensuring stabilising action occurs within 30 days from issue), (ii) counterparty qualification (institutional investor vs relevant person vs principal acquirer), and (iii) transaction value documentation (especially where consideration is non-cash). Firms should maintain contemporaneous records of trade dates, counterparties’ status, and the valuation basis for consideration to demonstrate that the exemption conditions were satisfied.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular Sections 197, 198, 239(1), 275(2), and the regulation-making power in section 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation 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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.