Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 47) Regulations 2004
- Act Code: SFA2001-S716-2004
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Power relied on: Section 337(1) of the Securities and Futures Act
- Citation: SL 716/2004
- Commencement: 3 December 2004
- Status: Current version as at 27 March 2026 (per the legislation portal)
- 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. 47) 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 specific “stabilising action” taken in connection with a particular debt issuance.
Stabilisation is a practice commonly seen in securities offerings: market participants may take limited steps to support or maintain the trading price of newly issued securities for a short period after issuance. However, stabilisation can raise concerns about market manipulation or misleading price formation. Singapore’s market conduct framework therefore generally restricts conduct that could distort market prices.
This set of Regulations addresses that tension by carving out an exemption. It allows stabilising activity—subject to strict conditions—so long as the stabilisation relates to the defined “Notes” and is carried out within a specified timeframe, and by or for certain categories of persons. The exemption is not general; it is tied to a particular issuer and a particular tranche of notes.
What Are the Key Provisions?
Section 1: Citation and commencement. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 47) Regulations 2004” and come into operation on 3 December 2004. For practitioners, this matters because the exemption is available only for stabilising actions taken after the Regulations take effect (and, in any event, within the later timeframe specified in Section 3).
Section 2: Definitions. The Regulations define two central terms: “Notes” and “stabilising action”.
“Notes” are defined very specifically as the 5-year US$ fixed rate notes due November 2009 issued by Sri Lanka Telecom Limited, with a principal amount of up to US$100 million. This definition is crucial: it limits the exemption to that particular instrument. If the stabilisation relates to different notes (different maturity, issuer, currency, or issue size), the exemption would not apply.
“Stabilising action” is defined as an action taken in Singapore or elsewhere by Standard Chartered Bank (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. This definition is also restrictive in scope: it focuses on purchase-related conduct (including offers or agreements to buy) and ties the purpose to price stabilisation/maintenance.
Section 3: Exemption from Sections 197 and 198 of the Act. This is the operative provision. 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 of the Notes, with stabilisation carried out by either:
- (a) a person referred to in section 274 of the Act; or
- (b) a sophisticated investor as defined in section 275(2) of the Act.
In plain language, Section 3 permits certain stabilisation activities for a limited post-issuance window (30 days from issue) and only when performed by (or within the regulatory framework applicable to) specified categories of persons.
Practical implications of the “within 30 days” condition. The exemption is time-bound. Even if the stabilising action is otherwise consistent with the definition (i.e., it involves Standard Chartered Bank or related corporations buying/agreeing to buy the defined Notes for stabilisation purposes), it falls outside the exemption if performed after the 30-day period. For transaction teams, this requires careful compliance planning: order placement, execution timing, and any subsequent stabilisation measures must be tracked against the “date of issue” and the 30-day window.
Practical implications of the “person” condition. The exemption is also conditional on who takes the stabilising action. Section 3 refers to persons “referred to in section 274” and to “sophisticated investors” under section 275(2). While the Regulations do not reproduce those definitions, the cross-references indicate that the exemption is not intended to be available to any market participant. Instead, it is limited to persons who fall within the SFA’s specified categories—typically those who are authorised or otherwise recognised in the market conduct regime for dealing in securities.
Scope: exemption from Sections 197 and 198, not from all market conduct rules. The Regulations do not purport to immunise stabilisation from every regulatory requirement. It only states that Sections 197 and 198 of the SFA “shall not apply” to the specified stabilising action. Accordingly, practitioners should not assume that stabilisation is fully exempt from all aspects of the SFA or other laws. Other provisions—such as general prohibitions, disclosure requirements, licensing/authorisation rules, and any applicable MAS notices—may still apply depending on the facts.
How Is This Legislation Structured?
These Regulations are concise and structured around three provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that tightly constrain the scope of the exemption (the specific “Notes” and the defined “stabilising action”).
- Section 3 sets out the exemption from specified SFA provisions, including the key conditions: 30-day timeframe from issue and stabilisation by persons within the referenced categories.
There are no additional parts or schedules in the extract provided. The legislative design is therefore “precision drafting”: it defines the instrument and the conduct, then grants a limited exemption from particular statutory sections.
Who Does This Legislation Apply To?
The exemption is relevant primarily to parties involved in the issuance and market trading of the defined notes—most notably Standard Chartered Bank and its related corporations, because the definition of “stabilising action” is anchored to their stabilising purchases (or offers/agreements to buy). However, Section 3 also introduces a further gatekeeping requirement: stabilising action must be taken within 30 days of issue by a person falling within section 274 of the SFA or by a sophisticated investor under section 275(2).
Accordingly, the Regulations apply to stabilisation activity that meets all of the following: (i) it concerns the defined Sri Lanka Telecom Limited 5-year US$ fixed rate notes due November 2009 (up to US$100 million); (ii) it is stabilising action as defined (buying or agreeing to buy for stabilisation/price maintenance); (iii) it is taken within 30 days from the date of issue; and (iv) it is taken by a qualifying person category.
Why Is This Legislation Important?
For practitioners, the importance of these Regulations lies in how they operationalise a controlled exception to market conduct restrictions. Stabilisation can be commercially valuable—especially in the early trading period after issuance—because it may reduce volatility and support orderly price discovery. At the same time, stabilisation can be perceived as interfering with market pricing. By granting an exemption only for a defined set of notes, a defined stabilisation mechanism, a defined time window, and specified categories of persons, the Regulations aim to balance market integrity with practical issuance needs.
From a compliance perspective, the Regulations provide a clear “safe harbour” (to the extent of the exemption) for stabilising conduct that fits within the defined parameters. This can reduce legal uncertainty for issuers, arrangers, and banks involved in underwriting or distribution. However, because the exemption is limited to Sections 197 and 198 and does not automatically displace other legal obligations, counsel should treat the exemption as partial and fact-specific rather than as a blanket authorisation.
In practice, lawyers advising on stabilisation programmes should focus on: (1) confirming the instrument matches the definition of “Notes”; (2) ensuring the stabilisation activity is genuinely within the defined “stabilising action” (including the purpose of stabilising/maintaining market price); (3) tracking the 30-day period from the correct “date of issue”; and (4) verifying that the stabilising trades are executed by or through persons who satisfy the Section 3 person conditions. Failure on any of these points could mean that the exemption does not apply, exposing the conduct to the underlying SFA provisions that the exemption otherwise neutralises.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular Sections 197, 198, 274, 275(2), and the exemption-making power in section 337(1).
- Futures Act (not directly evidenced in the extract, but listed in the provided metadata as related legislation).
- Stabilising Act (not directly evidenced in the extract, but listed in the provided metadata as related legislation).
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. 47) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.