Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 44) Regulations 2005
- Act Code: SFA2001-S696-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legislative Power: Made under section 337(1) of the Securities and Futures Act
- Citation: SL 696/2005
- Commencement: 2 November 2005
- Status: Current version (as at 27 Mar 2026)
- 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. 44) Regulations 2005 (“Stabilising Exemption Regulations”) creates a targeted exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for specified stabilising activities relating to particular debt securities (“Notes”). In plain terms, it allows certain market participants to take steps to stabilise the trading price of the Notes after issuance, without being in breach of the SFA provisions that would otherwise restrict or regulate such conduct.
Stabilisation is a common feature of securities offerings. When new notes are issued, there may be volatility in the secondary market. Under stabilisation arrangements, a stabilising agent may buy (or offer to buy) the relevant notes for a limited period to help maintain orderly trading and reduce extreme price swings. However, stabilisation can also be misused to create an artificial market. The SFA’s market conduct provisions therefore generally regulate or prohibit conduct that may distort prices or mislead investors.
This subsidiary legislation strikes a balance: it permits stabilising action in a narrowly defined context—limited to specific Notes issued by the Republic of Korea, taken within a defined time window after issuance, and only in relation to specified categories of counterparties/investors. The exemption is not blanket; it is conditional and tightly scoped.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and confirms that they come into operation on 2 November 2005. For practitioners, this is relevant when assessing whether stabilising conduct occurred within the legal framework applicable at the time.
Section 2 (Definitions) is crucial because the exemption depends entirely on whether the stabilising activity fits within the defined terms. The Regulations define “Notes”, “securities”, and “stabilising action”. The definition of “Notes” is highly specific: it refers to two particular issues by The Republic of Korea:
- the 3.625% notes due November 2015 with a principal amount of up to EUR 500 million; and
- the 5.625% fixed rate notes due November 2025 with a principal amount of up to US$ 400 million.
The definition of “stabilising action” is also narrow. It means an action taken in Singapore or elsewhere by UBS AG (or any of its related corporations) to buy, or 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 matters in two ways. First, it identifies the permitted stabilising actor (UBS AG and related corporations). Second, it ties the purpose of the conduct to stabilisation/price maintenance, rather than ordinary trading or investment activity.
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of the Notes within 30 days from the date of issue, 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 SFA; 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 contains three cumulative conditions that practitioners should treat as “gates” to the exemption:
- Time gate: the stabilising action must occur within 30 days from the date of issue of the Notes.
- Counterparty gate: the stabilising action must be taken with an institutional investor, a relevant person, or a principal acquirer meeting the minimum consideration threshold.
- Instrument/actor gate: the action must be stabilising action as defined—i.e., involving the specified Notes and taken by UBS AG (or related corporations) for stabilisation/price maintenance purposes.
Although the extract does not reproduce Sections 197 and 198 of the SFA, the exemption’s effect is clear: it removes the applicability of those market conduct provisions to the specified stabilising conduct. In practice, this means that, for the defined Notes and within the defined parameters, UBS AG’s stabilisation activities will not be treated as falling within the prohibitions or restrictions contained in those SFA sections.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, short-form manner typical of targeted exemptions. They consist of:
- Section 1: Citation and commencement.
- Section 2: Definitions, including the precise identification of the Notes and the definition of stabilising action.
- Section 3: The exemption clause, specifying which SFA provisions are disapplied, the time window, and the categories of persons with whom stabilising action may be taken.
There are no additional parts or schedules in the extract. The legal work therefore focuses on interpreting the defined terms and ensuring that the factual matrix (issuer, notes, stabilising agent, timing, and counterparties) fits within the exemption.
Who Does This Legislation Apply To?
In terms of subject matter, the Regulations apply only to stabilising action in respect of the two specified series of notes issued by The Republic of Korea. If the instrument is different, or if the stabilising activity relates to notes outside the defined principal amount ranges, the exemption will not apply.
In terms of persons, the exemption is designed around stabilising action taken by UBS AG (or its related corporations). The exemption also depends on the identity of the counterparty to the stabilising transactions: institutional investors, relevant persons, or principal acquirers meeting the minimum consideration threshold. Accordingly, the Regulations are most relevant to stabilising agents, their compliance teams, and counterparties involved in the relevant transactions.
Why Is This Legislation Important?
This legislation is important because it provides legal certainty for stabilisation activities that are otherwise potentially risky under market conduct rules. Without an exemption, stabilising purchases or offers to buy could be argued to fall within statutory restrictions on market manipulation or improper market conduct. By disapplying Sections 197 and 198 of the SFA for qualifying stabilising action, the Regulations enable structured underwriting and stabilisation programmes to operate within a clear legal framework.
For practitioners advising issuers, arrangers, stabilising agents, or counterparties, the key practical value lies in the precision of the exemption. The Regulations do not merely authorise “stabilisation” in general; they require careful alignment with:
- the exact notes (issuer, coupon, maturity, and principal amount caps);
- the exact stabilising actor (UBS AG and related corporations);
- the exact timing (within 30 days of issue); and
- the exact counterparties (institutional investors, relevant persons, or principal acquirers with at least $200,000 consideration per transaction).
From an enforcement and risk-management standpoint, this means that compliance teams should implement transaction monitoring and documentation practices that demonstrate each element of the exemption. For example, they should be able to evidence the date of issue, the stabilisation period, the identity of counterparties, and the consideration threshold where applicable. They should also ensure that the purpose of the transactions is consistent with “stabilise or maintain the market price” as defined.
Finally, the Regulations illustrate a broader regulatory approach in Singapore: market conduct rules are generally strict, but targeted exemptions are available where stabilisation is legitimate and bounded. This helps maintain market integrity while supporting efficient capital markets activity.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197, 198, 239(1), 275(2), and the enabling power in section 337(1).
- Futures Act (as referenced in the legislation metadata context).
- Stabilising Act (as referenced in the legislation metadata context).
- Timeline (legislation timeline/versioning materials relevant to confirming the correct version as at the relevant date).
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.