Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 45) Regulations 2004
- Act Code: SFA2001-S700-2004
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Regulation Number: SL 700/2004
- Citation: “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 45) Regulations 2004”
- Commencement: 24 November 2004
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (“Notes”, “stabilising action”)
- Section 3: Exemption from specified Act provisions for stabilising action within a defined period and for specified investor categories
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 45) Regulations 2004 is a targeted regulatory instrument. In essence, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to a specific issuance of fixed-rate notes.
Stabilising action is a common market practice in securities offerings. It typically involves limited buying (or arrangements to buy) by a market participant to help maintain or support the trading price of newly issued securities during the early period after issuance. While such conduct can be legitimate and beneficial for orderly markets, it can also raise regulatory concerns about market manipulation or unfair dealing. The SFA therefore contains provisions that restrict or regulate conduct that could distort market prices.
This set of Regulations addresses that tension by carving out a controlled exception. It specifies (i) the exact notes in question, (ii) the stabiliser and its related corporations, (iii) the time window during which stabilising action may occur, and (iv) the categories of persons with whom the stabilising action may be undertaken. The result is a compliance-friendly framework: stabilisation is permitted, but only within strict boundaries.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms the legal identity and effective date of the Regulations. The Regulations may be cited by their full name and came into operation on 24 November 2004. For practitioners, this matters because the exemption is time-bound and must be assessed against the commencement date and the relevant issuance timeline.
Section 2 (Definitions) is the heart of the instrument’s precision. It defines two crucial terms:
- “Notes” means the 7-year fixed rate notes due November 2011 issued by Mayne Group Limited for a principal amount of up to US$200 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Morgan Stanley & Co. International Limited (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 are significant because they make the exemption issue-specific and participant-specific. A lawyer advising on stabilisation must therefore confirm that the relevant instrument is the defined “Notes” and that the stabilising activity is carried out by the defined stabiliser (Morgan Stanley & Co. International Limited) or its related corporations. Any deviation—different issuer, different tranche, different maturity, or a different stabilising entity—would likely fall outside the exemption.
Section 3 (Exemption) provides the operative relief. It states that Sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with respect to stabilising action undertaken with either:
- (a) a person referred to in section 274 of the SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
In plain language, Section 3 authorises stabilisation for this particular notes issuance during a limited post-issue period, but only when the stabilising transactions are conducted with certain eligible counterparties. The exemption is not a blanket permission to stabilise in any circumstances; it is conditional on both timing (within 30 days from issue) and counterparty eligibility (persons under section 274 or sophisticated investors under section 275(2)).
For practitioners, the most practical compliance questions are: (1) what is the “date of issue” for the Notes (which may be the issue date specified in offering documentation), and (2) whether the counterparty fits within the statutory categories. The Regulations’ drafting suggests that stabilising action must be structured so that the relevant trades are executed with eligible persons. If stabilising action is carried out outside the 30-day window or with ineligible counterparties, the exemption would not apply, and the underlying SFA provisions (Sections 197 and 198) would remain relevant.
How Is This Legislation Structured?
The Regulations are concise and consist of three substantive provisions:
- Section 1: Citation and commencement (procedural/legal effect)
- Section 2: Definitions (scope-defining terms: “Notes” and “stabilising action”)
- Section 3: Exemption (the operative carve-out from SFA Sections 197 and 198, subject to time and counterparty conditions)
There are no Parts or schedules in the extract provided; the structure is intentionally streamlined. This is typical for targeted exemptions: the Regulations focus on defining the exact subject matter and then granting a conditional exemption.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and are therefore part of Singapore’s broader market conduct framework, their practical application is narrow. The exemption is relevant primarily to:
- The stabilising entity identified in the definition of “stabilising action” (Morgan Stanley & Co. International Limited) and its related corporations; and
- Counterparties with whom stabilising transactions may be conducted—specifically persons falling within section 274 of the SFA or sophisticated investors under section 275(2).
In addition, the exemption is tied to a specific issuance of notes by Mayne Group Limited. Accordingly, the Regulations do not generally authorise stabilisation for other issuers or other note tranches. A lawyer advising an arranger, dealer, or stabilisation agent should treat this as a transaction-specific regulatory permission, not a reusable template for future deals.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct regime balances two competing objectives: (i) allowing legitimate market practices such as stabilisation to support orderly trading after issuance, and (ii) preventing conduct that could amount to manipulation or unfair market distortion.
From an enforcement and compliance perspective, the exemption is valuable precisely because it reduces legal uncertainty. Without an exemption, stabilising activities could trigger restrictions under the SFA. By specifying the notes, the stabiliser, the time window, and the eligible counterparties, the Regulations provide a clear pathway for market participants to conduct stabilisation while staying within the law.
Practically, the Regulations also affect documentation and execution. Offering circulars, stabilisation notices (where applicable), internal compliance checklists, and trade booking processes must align with the exemption conditions. For example, firms should ensure that stabilising trades are executed within the 30-day period from the Notes’ issue date and that counterparties are screened to confirm they fall within the statutory categories. Failure to do so could expose the stabiliser to regulatory action for conduct that is not covered by the exemption.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Sections 197 and 198 (market conduct provisions from which the exemption applies)
- Section 274 (persons eligible for the exemption under Section 3(a))
- Section 275(2) (definition of “sophisticated investor” for Section 3(b))
- Section 337(1) (power under which MAS makes these Regulations)
- Futures Act (listed in the metadata timeline context, though not directly referenced in the extract)
- Stabilising Act (listed in the metadata timeline context; the operative legal basis in the extract is the SFA)
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. 45) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.