Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 43) Regulations 2005
- Act Code: SFA2001-S694-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (specifically, section 337(1))
- Commencement: 2 November 2005
- Enacting date: Made on 31 October 2005
- Regulatory status: Current version as at 27 March 2026 (per the provided extract)
- Legislative instrument number: SL 694/2005
- Key provisions: Section 2 (definitions); Section 3 (exemption)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 43) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument made under the Securities and Futures Act (SFA). In plain terms, it creates a limited exemption from certain market conduct rules when specific stabilising activities are carried out in relation to a particular issuance of government notes.
The regulations respond to a common feature of capital markets: when debt securities are newly issued, market participants may engage in “stabilising action” to help maintain orderly trading and reduce sharp price fluctuations immediately after issuance. However, stabilising conduct can resemble prohibited market manipulation if it is not carefully bounded. Accordingly, the SFA contains general prohibitions (in sections 197 and 198, as referenced) that restrict conduct that could distort market prices or mislead investors. This subsidiary legislation carves out an exemption for stabilising action, but only if strict conditions are met.
Importantly, the exemption is narrow in both subject matter and time. It applies only to stabilising action taken in respect of “Notes” defined in the regulations—US$ notes issued in November 2005 by the Government of the Socialist Republic of Vietnam up to a principal amount of US$750 million. It also applies only within a 30-day window from the date of issue of the Notes, and only when stabilising action is undertaken by specified categories of counterparties/investors and at or above a minimum transaction consideration threshold.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the short title and states that the regulations come into operation on 2 November 2005. This matters for practitioners because the exemption can only be relied upon for stabilising action occurring after commencement (subject to the 30-day post-issue limitation in section 3).
Section 2 (Definitions) sets the regulatory “building blocks” for the exemption. The definition of “Notes” is highly specific: it refers to US$ notes issued in November 2005 by The Government of the Socialist Republic of Vietnam for a principal amount of up to US$750 million. This means the exemption cannot be extended to other issuances, other tranches, or other sovereign debt instruments, even if they are similar in nature.
Section 2 also defines “stabilising action” as an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) Ltd (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 crucial because it ties the exemption to a particular stabilising actor (Credit Suisse First Boston (Europe) Ltd and related corporations) and to a particular purpose (stabilising or maintaining market price). A practitioner should therefore assess not only what trades were executed, but also whether the conduct fits within this defined stabilising framework.
Finally, Section 2 defines “securities” by reference to the SFA’s definition in section 239(1). This ensures that the regulatory concepts align with the broader statutory taxonomy of “securities” under the SFA.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Act shall not apply to any stabilising action taken in respect of any of the Notes, within 30 days from the date of issue of the Notes, provided the stabilising action is taken with one of the following categories of persons:
(a) an institutional investor;
(b) a relevant person as defined in section 275(2) of the Act; or
(c) a person who acquires the Notes as principal, where 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.
From a compliance perspective, section 3 does two things simultaneously: (i) it limits the exemption temporally (30 days from issue), and (ii) it limits the exemption by counterparty category and minimum consideration. The minimum consideration threshold in section 3(c) is particularly important for structuring and documentation. It is designed to ensure that the exemption does not facilitate stabilising transactions with smaller retail-type counterparties or low-value trades that could undermine investor protection objectives.
Practitioners should also note the regulatory technique: the exemption is framed as a carve-out from the application of specific SFA provisions (sections 197 and 198). This implies that those sections otherwise would govern and potentially prohibit the relevant conduct. The exemption therefore functions as a safe harbour—conditional on meeting the defined criteria.
How Is This Legislation Structured?
The regulations are structured in a straightforward, minimal format typical of targeted subsidiary legislation. They contain:
Section 1 (Citation and commencement) — establishes the legal identity of the instrument and when it takes effect.
Section 2 (Definitions) — defines “Notes,” “securities,” and “stabilising action,” including the specific stabilising actor and the purpose of the stabilising activity.
Section 3 (Exemption) — provides the core exemption from the SFA’s market conduct provisions (sections 197 and 198), subject to time, subject matter, and counterparty/consideration conditions.
There are no additional parts or complex schedules in the extract provided. The legislative design is therefore “precision regulation”: it targets a specific issuance and a specific stabilising activity, rather than creating a broad general regime.
Who Does This Legislation Apply To?
In practical terms, the regulations apply to parties involved in stabilising action relating to the defined Vietnam government notes issued in November 2005. The definition of “stabilising action” narrows the relevant actor to Credit Suisse First Boston (Europe) Ltd and its related corporations. Accordingly, the exemption is most relevant to that stabilising group and any entities acting through or alongside them in Singapore or elsewhere.
However, section 3 also imposes conditions based on the counterparty to the stabilising transactions. The exemption is available only where the stabilising action is taken with an institutional investor, a relevant person (as defined in section 275(2) of the SFA), or a principal acquirer meeting the $200,000 per transaction minimum consideration threshold. This means that even if the stabilising actor is within the definition, the exemption will not protect transactions that fall outside these counterparty categories or fail the consideration threshold.
Why Is This Legislation Important?
This subsidiary legislation is important because it balances two competing regulatory objectives: (1) preventing market manipulation and improper market conduct, and (2) allowing legitimate market practices that support orderly trading in newly issued securities. Stabilising action can be a legitimate function of underwriting and distribution processes, but it must be constrained to avoid undermining market integrity.
By exempting stabilising action from sections 197 and 198 of the SFA, the regulations provide a controlled safe harbour. For practitioners, the key value lies in the clarity of the conditions: the exemption is limited to a specific set of notes, a defined stabilising actor, a defined time period (30 days from issue), and specified counterparties (plus a minimum consideration threshold for principal acquisitions). This makes it easier to advise on whether particular trades or arrangements are likely to fall within the exemption.
From an enforcement and risk-management perspective, the narrow scope reduces regulatory uncertainty. If a stabilising programme deviates—by trading outside the 30-day window, involving counterparties not within the permitted categories, or relating to notes outside the defined “Notes”—the exemption would likely not apply, exposing the conduct to the general prohibitions in the SFA. Accordingly, compliance teams should ensure that transaction records, counterparty classifications, and trade timing are capable of demonstrating eligibility.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the regulation-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. 43) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.