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
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Made under section 337(1) of the Securities and Futures Act
- Commencement: 1 February 2006
- Key Provisions: Section 2 (definitions); Section 3 (exemption); The Schedule (relevant subsidiaries)
- Regulatory Status: Current version as at 27 March 2026
- Regulator: Monetary Authority of Singapore (MAS)
- Regulation Number: SL 65/2006
- Instrument Citation: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 4) Regulations 2006
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 is a targeted regulatory instrument. In essence, it creates a specific exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to a particular set of debt securities: US$ 10-year fixed rate senior notes due February 2016 issued by C&M Finance Ltd. (the “Notes”).
In plain language, the Regulations recognise that, during the initial period after issuance of certain notes, market participants may engage in “stabilising action” to help maintain orderly trading and reduce extreme price volatility. However, stabilising conduct can resemble prohibited market manipulation if not carefully bounded. The Regulations therefore carve out a controlled exemption, allowing stabilising action to occur without triggering the prohibitions in the SFA—provided strict conditions are met.
Because this is a “(No. 4)” exemption regulation, it is best understood as part of a series of instruments that address stabilisation in specific issuance contexts. The scope is narrow: it is tied to defined Notes, defined stabilising actors (notably Goldman Sachs (Asia) L.L.C. and its related corporations), and a limited time window after issuance.
What Are the Key Provisions?
1. Definitions (Section 2)
The Regulations’ operative effect depends heavily on its definitions. Section 2 defines “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. up to a principal amount of US$700 million, guaranteed by C&M Co., Ltd. and its relevant subsidiaries. This specificity is crucial: the exemption does not apply to other notes, other issuers, or other maturities.
“Stabilising action” is also defined narrowly. It means 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 limits who can benefit from the exemption and what conduct qualifies.
2. The Exemption (Section 3)
The central provision is Section 3. It provides 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. In other words, for the first 30 days after issuance, stabilising action that meets the conditions can proceed without breaching the SFA prohibitions contained in Sections 197 and 198.
While the extract does not reproduce Sections 197 and 198, in practice these provisions relate to market conduct restrictions—commonly including prohibitions on market manipulation and related conduct. The exemption is therefore a legal “shield” against enforcement of those prohibitions, but only for stabilising action that fits the Regulations’ parameters.
3. Who may be counterparties (Section 3(a)–(c))
Section 3 further limits the exemption by specifying the types of persons with whom stabilising action may be conducted. Stabilising action must be taken “with” one of the following categories:
- (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 that the consideration for each transaction is not less than $200,000 (or its equivalent in a foreign currency), whether paid in cash or by exchange of securities or other assets.
This structure is important for practitioners. It ensures that stabilising trades are conducted with sufficiently sophisticated or large-scale counterparties, or with persons meeting a minimum consideration threshold. The $200,000 minimum (or equivalent) is a quantitative gatekeeper: it prevents the exemption from being used in small-lot retail-style trading that could distort price discovery.
4. Time limitation: 30 days from issue
The exemption is expressly time-bound. Stabilising action must occur within 30 days from the date of issue of the Notes. This is a common feature of stabilisation regimes: it permits stabilising activity during the period when trading conditions may be most volatile and when the market is still forming an initial price, but it prevents ongoing stabilisation from becoming a continuing manipulation strategy.
5. The Schedule: relevant subsidiaries
The definition of “relevant subsidiaries” points to “entities set out in the Schedule”. Although the extract does not list them, the Schedule is a critical document for determining the scope of the guarantee structure. Because the Notes are guaranteed by C&M Co., Ltd. and its relevant subsidiaries, the Schedule effectively fixes which subsidiaries are included for purposes of the Notes definition.
How Is This Legislation Structured?
The Regulations are concise and structured around a standard legislative pattern for exemptions:
- Section 1 (Citation and commencement): sets the name of the Regulations and provides that they come into operation on 1 February 2006.
- Section 2 (Definitions): establishes the key terms that control the exemption’s scope, including the specific Notes, the stabilising actor, and the counterpart categories.
- Section 3 (Exemption): provides the operative legal exemption from SFA Sections 197 and 198, subject to the 30-day period and the counterparty conditions.
- The Schedule: identifies the “relevant subsidiaries” for the Notes’ guarantee structure.
For legal work, this structure means that the analysis is largely definitional and conditional: once you confirm the Notes and the stabilising actor, the remaining work is to verify whether the stabilising trades occurred within the permitted window and with eligible counterparties.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in respect of the defined Notes, but the exemption is functionally available only where the stabilising action is taken by Goldman Sachs (Asia) L.L.C. or its related corporations (as defined by the Regulations’ definition of “stabilising action”). Therefore, the primary “beneficiaries” are the stabilising dealer(s) conducting the stabilisation strategy.
However, the exemption also depends on the counterparties to the stabilising trades. Stabilising action must be taken with an institutional investor, a relevant person (within the meaning of section 275(2) of the SFA), or a principal acquirer meeting the $200,000 minimum consideration threshold. Accordingly, issuers, guarantors, and trading desks should treat the counterparty eligibility requirements as compliance-critical, because trades with ineligible counterparties could fall outside the exemption and expose conduct to the underlying SFA prohibitions.
Why Is This Legislation Important?
This Regulations is important because it provides legal certainty for stabilisation activities in a specific issuance context. Stabilisation is a regulated practice: without an exemption, conduct that involves buying or offering to buy securities to influence price could be interpreted as market manipulation. By carving out stabilising action within a defined period and with defined counterparties, the Regulations reduce ambiguity and support orderly market functioning during the early trading phase.
From a practitioner’s perspective, the key compliance implications are practical:
- Confirm the instrument: the exemption is tied to the specific Notes described in the definition. Any deviation in issuer, maturity, currency, or guarantee structure could remove the exemption.
- Confirm the stabiliser: the stabilising action must be taken by Goldman Sachs (Asia) L.L.C. or its related corporations. Internal delegation or use of other dealers may require separate legal analysis.
- Track the timeline: stabilising trades must occur within 30 days from the date of issue. Compliance teams should maintain trade date records and issuance date documentation.
- Document counterparties and thresholds: counterparties must fall within the institutional/relevant person categories, or—if principal acquirers—must meet the $200,000 minimum consideration per transaction (including non-cash consideration via exchange of securities or other assets).
Finally, the existence of this exemption illustrates how Singapore’s market conduct framework balances market integrity with practical market-making and stabilisation needs. It reinforces that exemptions are not blanket permissions; they are conditional and tightly scoped, and they operate as exceptions to otherwise applicable prohibitions.
Related Legislation
- Securities and Futures Act (Cap. 289): in particular Sections 197 and 198 (market conduct prohibitions) and Section 337(1) (power to make exemption regulations); also Section 275(2) (definition of “relevant person”).
- Futures Act: referenced in the broader market conduct regulatory ecosystem (as indicated in the metadata).
- Stabilising Act: referenced in the metadata as part of the stabilisation framework 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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.