Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 46) Regulations 2005
- Act Code: SFA2001-S716-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 15 November 2005
- Regulation number: SL 716/2005
- Status: Current version as at 27 March 2026 (per the legislation record)
- Key provisions: Regulation 1 (Citation and commencement); Regulation 2 (Definitions); Regulation 3 (Exemption)
- Primary legal effect: Exempts specified “stabilising action” in relation to specified “Notes” from the prohibitions in sections 197 and 198 of the SFA
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 46) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. In plain terms, it permits certain market participants to take stabilising steps in connection with a particular issuance of notes, without breaching the general market conduct prohibitions in the Securities and Futures Act.
The legislation is narrow in both subject matter and time. It is not a general “stabilisation regime” for all securities. Instead, it defines a specific set of “Notes” (US$ fixed rate notes due November 2012 issued by Korea East-West Power Co., Ltd., up to US$300 million) and allows stabilisation activities only within a limited window—specifically, within 30 days from the date of issue of the Notes.
At a practical level, the Regulations recognise that stabilising activity is often used in capital markets to support orderly trading and mitigate excessive price volatility around issuance. The exemption therefore balances two policy goals: (i) preventing market manipulation and improper conduct, and (ii) allowing legitimate stabilisation practices that are commonly used in bond offerings, provided they meet defined conditions.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) sets the legal identity and start date of the Regulations. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 46) Regulations 2005” and come into operation on 15 November 2005. For practitioners, this matters for determining whether stabilising actions taken around the issuance period fall within the regulatory framework.
Regulation 2 (Definitions) is the heart of the instrument because it tightly constrains what conduct is covered. Three defined terms are crucial:
- “Notes” means the US$ fixed rate notes due November 2012 issued by Korea East-West Power Co., Ltd. for a principal amount of up to US$300 million.
- “securities” has the same meaning as in section 239(1) of the Securities and Futures Act. This cross-reference ensures that the exemption operates within the Act’s defined universe of “securities”.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by specified entities—Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Lehman Brothers International (Europe), or any of their 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.
Two points are particularly important for legal analysis. First, the definition is participant-specific: only the named financial institutions (and their related corporations) can perform the stabilising action that benefits from the exemption. Second, the definition is purpose-specific: the action must be taken to stabilise or maintain the market price. This purpose requirement can be relevant in enforcement or disputes about whether conduct was genuinely stabilising or instead had another market effect.
Regulation 3 (Exemption) provides the operative relief. It states that sections 197 and 198 of the Act 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 counterparties:
- (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, provided the consideration for the acquisition is not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
In effect, the exemption is conditional on both time (within 30 days from issue) and counterparty type (institutional investors, relevant persons, or principal acquirers meeting a minimum consideration threshold). For practitioners, these conditions are often where compliance work is concentrated: transaction documentation, counterparties’ status, and deal economics must align with the exemption’s requirements.
Also, the exemption is framed as a carve-out from sections 197 and 198 of the SFA. While the extract does not reproduce those sections, the regulatory context (“Market Conduct”) indicates that those provisions likely address prohibitions relating to improper trading, market manipulation, or misleading conduct. The Regulations therefore do not legalise all trading; they only remove the risk of breaching those specific prohibitions for qualifying stabilising action.
How Is This Legislation Structured?
The Regulations are structured as a short, three-regulation instrument:
- Regulation 1: Citation and commencement (15 November 2005).
- Regulation 2: Definitions of “Notes”, “securities”, and “stabilising action”.
- Regulation 3: The exemption mechanism—what is exempted, from which Act provisions, for what period, and subject to which counterparty conditions.
There are no additional parts or schedules in the extract provided. The legislative design is therefore “definition-led”: once the Notes and stabilising action are defined, the exemption in Regulation 3 applies automatically if the conditions are met.
Who Does This Legislation Apply To?
The Regulations apply to stabilising actions in relation to the specified “Notes” (Korea East-West Power Co., Ltd. US$ fixed rate notes due November 2012, up to US$300 million). The exemption is available only for stabilising actions carried out by the defined stabilising actors—Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Lehman Brothers International (Europe), or their related corporations.
In addition, the exemption is conditional on the identity and status of the counterparty to the stabilising transactions. Stabilising action must be taken with an institutional investor, a relevant person (per section 275(2) of the SFA), or a principal acquirer meeting the $200,000 minimum consideration threshold per transaction. Accordingly, the Regulations are relevant not only to the stabilising banks, but also to the parties structuring the offering and executing trades, including compliance teams that must verify counterparties and transaction values.
Why Is This Legislation Important?
This instrument is important because it provides legal certainty for a specific bond issuance by carving out stabilisation activities from market conduct prohibitions. In capital markets practice, stabilisation can be essential to support orderly price formation after issuance. Without an exemption, stabilising bids or purchases—depending on how the underlying market conduct provisions are drafted—could be argued to fall within prohibited conduct.
For legal practitioners, the Regulations also illustrate how Singapore’s market conduct framework can accommodate legitimate market practices through tailored exemptions. Rather than creating a broad general permission, the exemption is tightly bounded by: (i) the identity of the Notes, (ii) the identity of the stabilising institutions, (iii) the purpose of the action (stabilisation/price maintenance), (iv) the time limit (30 days from issue), and (v) the counterparty categories and minimum consideration threshold.
From an enforcement and compliance perspective, these boundaries matter. If stabilising activity occurs outside the 30-day window, involves a counterparty not within the permitted categories, or is performed by an entity not covered by the definition of “stabilising action”, the exemption would likely not apply. That could expose the stabilising participants to regulatory risk under sections 197 and 198 of the SFA. Therefore, practitioners advising on bond offerings should treat this Regulations as a checklist: confirm the Notes, confirm the stabilising actor, confirm the transaction timing, confirm counterparty status, and confirm transaction consideration where relevant.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the authorising provision in section 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (legislation record timeline for version verification)
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.