Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 46) Regulations 2004
- Act Code: SFA2001-S704-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) — power under section 337(1)
- Legislation Number: SL 704/2004
- Commencement: 26 November 2004
- Status: Current version as at 27 March 2026 (per the legislation record)
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Relevant Securities and Futures Act provisions referenced: Sections 197, 198, 274, 275(2)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 46) Regulations 2004 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct restrictions under the Securities and Futures Act (SFA). In plain terms, it allows specified parties to take “stabilising action” in connection with a particular issuance of US dollar fixed rate notes without automatically triggering the prohibitions that would otherwise apply.
The legislation is best understood against the backdrop of the SFA’s market conduct framework. In many securities markets, issuers and their financial intermediaries may seek to support or “stabilise” the trading price of newly issued instruments during the initial trading period. However, stabilisation can resemble prohibited conduct if it is not carefully constrained. Singapore’s approach is therefore to permit stabilisation only where the law provides an exemption and where the stabilisation is confined to defined parameters.
This set of Regulations is highly specific: it defines the “Notes” as US$ fixed rate notes issued by Rizal Commercial Banking Corporation (RCBC) in November 2004 for up to US$200 million, and it defines “stabilising action” as actions taken by UBS Limited (or its related corporations) to buy, or to offer or agree to buy, those notes in order to stabilise or maintain their market price. The exemption is time-limited and applies only to stabilising action carried out within 30 days from the date of issue.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and commencement date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 46) Regulations 2004” and come into operation on 26 November 2004. For practitioners, this matters because the exemption only becomes available once the Regulations are in force, and the stabilisation period is measured from the “date of issue” of the Notes (not from the commencement date). Nonetheless, the commencement date confirms the legal basis for the exemption in the relevant issuance timeframe.
2. Definitions of “Notes” and “stabilising action” (Regulation 2)
Regulation 2 is the gateway to the exemption. It defines two central terms:
- “Notes” means the US$ fixed rate notes issued by Rizal Commercial Banking Corporation in November 2004 for a principal amount of up to US$200 million.
- “stabilising action” means an action taken in Singapore or elsewhere by UBS 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 confine the exemption to a particular transaction and a particular stabilising participant. If a different issuer, different notes, or a different stabilising firm (not UBS or its related corporations) is involved, the exemption would not apply as drafted.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
The operative provision is Regulation 3. It states that sections 197 and 198 of the Act shall not apply to any stabilising action taken in respect of the Notes, within 30 days from the date of issue, with stabilising action carried out by either:
- a person referred to in section 274 of the Act, or
- a sophisticated investor as defined in section 275(2) of the Act.
In practical terms, this means that the SFA’s market conduct prohibitions (contained in sections 197 and 198) are carved out for stabilisation activity that fits the defined scope. The exemption is therefore conditional on time (within 30 days from issue), subject matter (the specified Notes), and actor category (a person under section 274 or a sophisticated investor under section 275(2)).
4. Actor and investor categories: why the cross-references matter
Although the Regulations themselves do not reproduce the content of sections 274 and 275(2), the cross-references are crucial. They indicate that the exemption is not simply “anyone can stabilise.” Instead, the law limits stabilisation to persons who fall within the SFA’s defined categories—typically those connected with the issuance process or permitted market participants—and to sophisticated investors, which are generally those meeting higher thresholds of financial knowledge or experience.
For a practitioner, the key compliance task is to confirm that the stabilising counterparty and/or the relevant trading arrangements fall within the referenced categories. If the stabilising action is undertaken by UBS or its related corporations, the exemption still requires that the stabilising action is taken “with” a person referred to in section 274 or a sophisticated investor under section 275(2). This drafting suggests that the exemption is concerned with the relationship between the stabilising activity and the relevant counterparties or participants captured by the SFA framework.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with a conventional layout:
- Regulation 1: Citation and commencement (sets the legal name and when it takes effect).
- Regulation 2: Definitions (defines “Notes” and “stabilising action”).
- Regulation 3: Exemption (the operative carve-out from sections 197 and 198 of the SFA, subject to time and participant conditions).
There are no additional parts or complex schedules in the extract provided. The entire legal effect is concentrated in the exemption clause and the definitions that narrow its application.
Who Does This Legislation Apply To?
On its face, the Regulations apply to stabilising action in respect of the defined “Notes” (RCBC US$ fixed rate notes issued in November 2004 up to US$200 million) and to stabilising action taken by UBS Limited (or its related corporations). Because “stabilising action” is expressly defined by reference to UBS and its related corporations, the exemption is not a general stabilisation permission for all market participants.
However, Regulation 3 further limits the exemption by requiring that the stabilising action is taken within the 30-day post-issue window and “with” either (a) a person referred to in section 274 of the SFA or (b) a sophisticated investor as defined in section 275(2). Accordingly, the exemption is relevant not only to UBS and its related corporations, but also to the counterparties and arrangements through which stabilisation is executed. Lawyers advising issuers, underwriters, or trading desks should therefore assess both the stabiliser and the counterparty/investor category to ensure the exemption is properly engaged.
Why Is This Legislation Important?
This legislation is important because it provides a lawful pathway for price stabilisation in a specific securities issuance while preserving the integrity of Singapore’s market conduct regime. Without an exemption, stabilising purchases or agreements to buy could be argued to fall within prohibitions designed to prevent manipulation or misleading market signals. The Regulations therefore reduce legal uncertainty for structured issuance activities by carving out stabilisation that is time-bound and confined to defined participants and instruments.
From a compliance perspective, the Regulations are a reminder that exemptions in market conduct law are typically narrow and conditional. Practitioners should not treat stabilisation as automatically permissible. Instead, they must verify: (i) the instrument is the exact “Notes” described; (ii) the stabilisation is carried out by the defined stabiliser (UBS or related corporations); (iii) the stabilisation occurs within the specified 30-day period from the date of issue; and (iv) the stabilisation is undertaken with the appropriate category of person or sophisticated investor under the SFA.
Finally, the Regulations illustrate how Singapore’s regulatory approach uses subsidiary legislation to tailor exemptions to particular transactions. For lawyers, this has practical implications for transaction documentation and regulatory advice: the exemption should be reflected in legal opinions, compliance checklists, and internal trading controls, and it should be cross-checked against the SFA’s broader market conduct provisions and any related stabilisation framework (including any “Stabilising Act” references in the legislation metadata).
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 274, and 275(2)
- Futures Act (as referenced in the platform metadata)
- Stabilising Act (as referenced in the platform metadata)
- Timeline (legislation timeline record for versioning and amendments)
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. 46) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.