Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 47) Regulations 2005
- Act Code: SFA2001-S728-2005
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 22 November 2005
- Regulation No.: SL 728/2005
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “Notes” and “stabilising action”)
- Section 3: Exemption from Sections 197 and 198 of the Securities and Futures Act for specified stabilising action
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 47) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a narrow, transaction-specific set of rules made under the Securities and Futures Act (SFA). In plain terms, it creates a legal “carve-out” that allows certain market participants to take stabilising steps in relation to a particular bond issuance—without being treated as breaching the general market conduct prohibitions in the SFA.
Stabilisation is a common feature of securities issuance. During the early period after a new issue, stabilising participants may buy (or offer to buy) the securities to help maintain orderly trading and reduce excessive volatility. However, stabilisation can also resemble market manipulation if it is not tightly controlled. The SFA therefore contains provisions that restrict certain conduct around securities dealing and market price effects. This subsidiary legislation addresses that tension by exempting specified stabilising activity from those restrictions, but only for a limited time and only for defined persons and transactions.
Crucially, the Regulations are not a general stabilisation regime for all securities. They are tailored to a specific instrument: “the 5-year US$ fixed rate notes due November 2010” issued by ICICI Bank Limited through its Singapore branch, for a principal amount up to US$550 million. The exemption is also limited to stabilising action taken by Merrill Lynch (Singapore) Pte. Ltd. (and related corporations), and it applies only within 30 days from the date of issue.
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the short title and commencement date. The Regulations “shall come into operation on 22nd November 2005.” For practitioners, this matters because the exemption only becomes available from that date, and because the stabilising period is measured from the “date of issue of the Notes” (see Section 3). In practice, counsel will align issuance documentation and dealing records with the statutory timeline to demonstrate compliance.
2. Definitions that tightly bound the exemption (Section 2)
Section 2 is the backbone of the Regulations because it defines the scope of what is being regulated. Three definitions are particularly important:
- “Notes” are precisely identified: the 5-year US$ fixed rate notes due November 2010 issued by ICICI Bank Limited, acting through its Singapore Branch, up to US$550 million.
- “securities” adopts the meaning in Section 239(1) of the SFA. This ensures the exemption operates within the SFA’s definitional framework.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by Merrill Lynch (Singapore) Pte. Ltd. or any of its related corporations to buy, or to offer or agree to buy, any of the Notes to stabilise or maintain the market price of the Notes in Singapore or elsewhere.
The definition of “stabilising action” is deliberately restrictive: it ties the exemption to a particular stabilising entity (Merrill Lynch (Singapore) Pte. Ltd. and related corporations) and to the specific purpose (stabilise or maintain market price). It also expressly covers actions taken “in Singapore or elsewhere,” which is significant for cross-border issuance and trading—meaning the exemption is not limited to Singapore-based trading venues.
3. The exemption from SFA market conduct provisions (Section 3)
Section 3 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, with respect to stabilising action involving certain categories of counterparties.
Although the extract does not reproduce Sections 197 and 198, the structure indicates that those sections contain prohibitions or restrictions relevant to market conduct—likely addressing improper dealing, misleading conduct, or trading practices that can affect market prices. The Regulations effectively neutralise those prohibitions for the specified stabilising activity.
The exemption applies only where the stabilising action is taken with one of the following counterpart categories:
- (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, provided that 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.
For practitioners, the $200,000 threshold in paragraph (c) is a key compliance checkpoint. It is transaction-based (“for each transaction”) and it accommodates both cash and non-cash consideration (including exchange of securities or other assets). This suggests that the exemption is intended to cover stabilising dealings with sophisticated or high-value counterparties, rather than retail or low-value participants.
4. Temporal limitation: “within 30 days from the date of issue”
The exemption is also time-bound. Even if all other conditions are met (correct Notes, correct stabilising entity, correct counterpart category), stabilising action outside the 30-day window would fall back under the general SFA prohibitions in Sections 197 and 198. Counsel should therefore ensure that dealing logs, trade confirmations, and internal approvals can evidence the dealing dates relative to the “date of issue.”
How Is This Legislation Structured?
The Regulations are extremely short and consist of three substantive provisions:
- Section 1 (Citation and commencement): identifies the instrument and when it takes effect.
- Section 2 (Definitions): sets the precise meaning of “Notes,” “securities,” and “stabilising action,” thereby limiting the exemption to a specific bond issuance and a specific stabilising actor.
- Section 3 (Exemption): provides the legal relief from Sections 197 and 198 of the SFA, but only for stabilising action within 30 days from issue and only in dealings involving specified counterparty categories (institutional investors, relevant persons, or principal acquirers meeting the $200,000 threshold).
There are no additional parts or schedules in the extract, reflecting the Regulations’ function as a targeted exemption rather than a comprehensive market conduct framework.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising dealings in the defined Notes—particularly Merrill Lynch (Singapore) Pte. Ltd. and its related corporations—because the definition of “stabilising action” is anchored to those entities. However, the exemption’s effect is not limited to the stabiliser alone; it also benefits the stabilising activity when it is conducted with the specified categories of counterparties.
The exemption is also conditional on the counterparty type. It applies when stabilising action is taken with: (i) an institutional investor; (ii) a “relevant person” under the SFA; or (iii) a principal acquirer meeting the minimum consideration threshold. Therefore, the Regulations are relevant to issuers, arrangers, dealers, and compliance teams that structure stabilisation programmes and execute trades during the post-issuance period.
Why Is This Legislation Important?
This subsidiary legislation is important because it provides a legally sanctioned pathway for stabilisation in a specific issuance context. Without such an exemption, stabilising purchases or offers to buy could risk triggering the SFA’s market conduct prohibitions. The Regulations therefore reduce legal uncertainty for market participants and enable orderly market practices during the initial trading period of a new bond issue.
From an enforcement and compliance perspective, the Regulations also illustrate how Singapore balances market integrity with market functioning. The exemption is narrow: it is limited to a particular set of Notes, a particular stabilising actor, a defined dealing purpose, and a strict 30-day window. It also restricts counterparties to institutional or otherwise qualifying persons, and it imposes a minimum transaction value for principal acquisitions.
For practitioners advising on stabilisation programmes, the key practical impact is that counsel must treat the exemption as a checklist exercise: confirm the instrument identity (“Notes”), confirm the stabiliser identity (“stabilising action” by Merrill Lynch (Singapore) Pte. Ltd. or related corporations), confirm the dealing dates (within 30 days from issue), and confirm the counterparty category and any applicable transaction value threshold. Proper documentation—trade records, counterparty classifications, and internal compliance approvals—will be essential to demonstrate that the exemption applies.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197 and 198 (market conduct provisions) and Section 337(1) (making power), as well as Section 239(1) (definition of “securities”) and Section 275(2) (definition of “relevant person”).
- Futures Act — referenced in the legislation portal metadata (contextual linkage within the broader regulatory framework).
- Stabilising Act — referenced in the legislation portal metadata (contextual linkage within the broader stabilisation framework).
- Timeline / Legislation timeline — for version control and confirmation of the applicable instrument date (as indicated by the portal).
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.