Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 44) Regulations 2004
- Legislation Type: Subsidiary Legislation (SL)
- Act Code: SFA2001-S696-2004
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Made under section 337(1) of the Securities and Futures Act
- Commencement: 19 November 2004
- Regulation Number: SL 696/2004
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (Notes; stabilising action)
- Section 3: Exemption from sections 197 and 198 of the Act for specified stabilising action
- Status (as provided): Current version as at 27 March 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 44) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a narrow, transaction-specific regulatory instrument. In practical terms, it creates a limited exemption from certain market conduct rules in the Securities and Futures Act (“SFA”) for stabilising activities carried out in connection with a particular issuance of notes.
Stabilisation is a common feature of securities issuance. After a new issue, market makers or arrangers may take steps to support or maintain the market price of the securities, typically to reduce volatility during the initial trading period. However, stabilisation can also resemble prohibited conduct if it is not carefully bounded. Singapore’s SFA contains market conduct provisions designed to prevent manipulation and improper trading practices. These Regulations carve out an exception so that stabilisation can occur lawfully, provided it meets the defined conditions.
Importantly, the Regulations are not a general stabilisation regime for all securities. They are drafted for a specific set of notes—7-year fixed rate senior notes due November 2011 issued by STATS ChipPAC Ltd., up to a specified principal amount—and for stabilising actions taken by a specified stabiliser group (Deutsche Bank AG and its related corporations). The exemption is also time-limited (within 30 days from the date of issue) and limited to stabilising counterparties that fall within defined categories of persons (as referenced in the SFA).
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations came into operation on 19 November 2004. For practitioners, this matters because it fixes the regulatory framework applicable to the relevant issuance and stabilisation period.
Section 2 (Definitions) is the heart of the instrument because it precisely defines the scope of what is being exempted. Two defined terms are critical:
- “Notes” means the 7-year fixed rate senior notes due November 2011 issued by STATS ChipPAC Ltd. for a principal amount of up to US$250 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Deutsche Bank AG (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.
These definitions do two things. First, they limit the exemption to a particular instrument and issuer (STATS ChipPAC Ltd.’s specified notes). Second, they limit the stabilising actor to Deutsche Bank AG and its related corporations, and they limit the permitted conduct to buying (or offering/agreement to buy) with the stabilisation purpose. The “in Singapore or elsewhere” language is also significant: it recognises that stabilisation may occur across jurisdictions, but the exemption is still available so long as the stabilising action fits the defined concept.
Section 3 (Exemption) provides the operative legal effect. 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 stabilising actions taken by or involving:
- a person referred to in section 274 of the Act; or
- a sophisticated investor as defined in section 275(2) of the Act.
While the extract does not reproduce the text of sections 197 and 198, the structure indicates that those sections contain prohibitions or restrictions that would otherwise capture stabilising purchases. The Regulations therefore function as a targeted “safe harbour” or “carve-out” from those prohibitions.
For a practitioner, the most important compliance questions arising from Section 3 are:
- Timing: stabilising action must be taken within 30 days from the date of issue. This is a hard temporal boundary. Parties should ensure their trading records, settlement dates, and internal approvals align with the “date of issue” concept.
- Counterparty/participant category: stabilising action must be taken with a person falling within section 274 or with a sophisticated investor under section 275(2). This means the exemption is not simply about the stabiliser’s conduct; it also depends on who the stabiliser is dealing with or how the stabilising action is structured.
- Instrument and actor: the action must relate to the defined “Notes” and be taken by Deutsche Bank AG or its related corporations (as defined in Section 2).
In practice, these conditions require careful documentation: the stabiliser should be able to demonstrate that the trades were for the specified notes, were undertaken by the permitted entity/entities, were within the 30-day window, and involved only the permitted categories of persons.
How Is This Legislation Structured?
The Regulations are extremely concise and consist of an enacting formula and three substantive provisions:
- Regulation 1: Citation and commencement.
- Regulation 2: Definitions of “Notes” and “stabilising action”. These definitions set the boundaries of the exemption.
- Regulation 3: The exemption clause, specifying that sections 197 and 198 of the SFA do not apply to stabilising action in respect of the defined notes, within the specified 30-day period, and involving persons within the specified SFA categories.
There are no additional parts, schedules, or procedural requirements in the extract provided. The Regulations therefore operate primarily as a legal permission mechanism, relying on the SFA’s broader market conduct framework and definitions (particularly in sections 274 and 275) to determine who qualifies.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and relate to market conduct rules, their practical application is limited to a specific stabilisation scenario. The exemption is available only for stabilising actions taken by Deutsche Bank AG or its related corporations in respect of the defined STATS ChipPAC Ltd. notes.
Further, Section 3 conditions the exemption on the stabilising action being taken with or involving persons falling within section 274 of the SFA or a sophisticated investor under section 275(2). Accordingly, even where the stabiliser and the notes match the definitions, the exemption may not apply if the stabilisation is carried out in a manner that falls outside those SFA-defined categories.
Why Is This Legislation Important?
This Regulations’ significance lies in its role as a targeted legal bridge between two competing policy objectives: (1) allowing orderly market functioning during an issuance (including price stabilisation) and (2) preventing market manipulation or improper trading practices.
Without an exemption, stabilising purchases could potentially be caught by general prohibitions in the SFA (here, sections 197 and 198). The Regulations therefore provide legal certainty for market participants involved in the issuance of the specified notes. For issuers, arrangers, and stabilising agents, this reduces regulatory risk and supports the ability to execute stabilisation strategies within a defined and defensible framework.
From an enforcement and compliance perspective, the Regulations also illustrate how Singapore’s market conduct regime can be tailored. The exemption is narrow in scope (specific notes, specific stabiliser group, specific time window, and specific counterparty categories). This narrow tailoring is important: it signals that stabilisation is permitted only under controlled circumstances and that parties must be able to demonstrate compliance with the conditions.
For practitioners advising on documentation and execution, the Regulations underscore the need for robust trade surveillance and recordkeeping. Counsel should ensure that stabilisation activities are tracked against the 30-day period, that the relevant entity performing the trades is within the defined stabiliser group, and that the counterparties meet the SFA categories referenced in section 274 or the sophisticated investor definition in section 275(2).
Related Legislation
- Securities and Futures Act (Cap. 289) — including market conduct provisions in sections 197 and 198, and the referenced person categories in sections 274 and 275(2)
- 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. 44) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.