Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 48) Regulations 2005
- Act Code: SFA2001-S729-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Commencement: 22 November 2005
- Legislative Status: Current version as at 27 March 2026 (timeline indicates original making on 22 Nov 2005)
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Primary Legal Effect: Exempts specified “stabilising action” in relation to specified Euro notes from the SFA market conduct prohibitions in sections 197 and 198
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 48) Regulations 2005 is a targeted regulatory instrument. In plain terms, it allows certain market participants to carry out “stabilising action” when dealing in a specific set of notes—without breaching particular market conduct rules in the Securities and Futures Act (SFA).
Stabilising action is a familiar concept in securities markets. During or shortly after the issuance of new debt securities, an underwriter or stabilising agent may intervene in the market to support liquidity and reduce excessive price volatility. However, stabilisation can resemble prohibited conduct if it is not carefully constrained. This Regulations therefore creates a narrow exemption: it permits stabilisation in relation to specified “Notes” issued in November 2005 by Korea National Housing Corporation, but only if the stabilising activity fits within defined parameters.
Because the exemption is transaction- and participant-specific, the Regulations should be read as a practical “deal-specific” carve-out from the SFA’s general market conduct prohibitions. For practitioners, the key is to identify (i) what conduct is being exempted, (ii) who may do it, (iii) which notes are covered, and (iv) the time and consideration thresholds that must be satisfied.
What Are the Key Provisions?
Section 1 (Citation and commencement) sets the legal identity and start date. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 48) Regulations 2005” and came into operation on 22 November 2005. This matters for compliance timelines—particularly because the exemption in section 3 is tied to a 30-day period from the date of issue of the notes.
Section 2 (Definitions) is central because the exemption turns on defined terms. The Regulations define:
- “Notes”: the Euro notes issued in November 2005 by Korea National Housing Corporation for a principal amount of up to Euro 700 million.
- “securities”: this adopts the meaning in section 239(1) of the SFA, ensuring the exemption operates within the SFA’s broader definitional framework.
- “stabilising action”: an action taken in Singapore or elsewhere by The Hongkong and Shanghai Banking Corporation Limited (HSBC), 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.
Practically, the definition of “stabilising action” is restrictive in two ways. First, it is limited to actions by HSBC or its related corporations. Second, it is limited to stabilisation of the market price of the specified Notes. This means that other dealers, or stabilisation in other instruments, would not automatically benefit from the exemption.
Section 3 (Exemption) provides the operative relief. 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, provided the stabilising action is carried out with one of the following categories of counterparties:
- (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, but only if 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 a practitioner, the most important compliance tasks arising from section 3 are:
- Time window: stabilising action must be taken within 30 days from the date of issue of the Notes. This is a hard boundary; actions outside the window would not be covered by the exemption.
- Counterparty classification: the exemption is conditional on the counterparty being an institutional investor, a relevant person, or a principal acquirer meeting the minimum consideration threshold.
- Minimum consideration threshold: for principal acquisitions, the consideration must be at least $200,000 (or equivalent). The Regulations expressly allow the consideration to be paid either in cash or by exchange of securities or other assets, which is important for structured settlement mechanics.
- Scope of exempted provisions: the exemption is specifically from sections 197 and 198 of the SFA. While the text provided does not reproduce those sections, the legal effect is that the market conduct prohibitions in those sections are inapplicable to the qualifying stabilising action.
In effect, section 3 balances market integrity with practical issuance needs. It recognises that stabilisation can be legitimate in a controlled context, but it limits the exemption to sophisticated counterparties and to transactions of sufficient size (where the counterparty is a principal acquirer).
How Is This Legislation Structured?
The Regulations are structured in a straightforward, short format typical of targeted exemptions:
- Section 1 contains the citation and commencement provision.
- Section 2 provides definitions that narrow the scope of the exemption—particularly “Notes” and “stabilising action”.
- Section 3 sets out the exemption itself, including the 30-day limitation and the counterparty/consideration conditions.
There are no additional parts or complex schedules in the extract. The legal analysis therefore largely turns on interpreting the defined terms and ensuring the factual matrix fits within the conditions in section 3.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and operate as a legal exemption from specified statutory provisions, their practical application is limited. The exemption applies to stabilising action taken by HSBC or its related corporations in relation to the defined Euro notes issued by Korea National Housing Corporation in November 2005.
Accordingly, the Regulations are most relevant to:
- HSBC and related corporations acting as stabilising agents or arrangers for the Notes; and
- Counterparties involved in stabilising transactions—because the exemption depends on whether the counterparty is an institutional investor, a relevant person, or a principal acquirer meeting the minimum consideration threshold.
Other market participants who might otherwise engage in stabilisation would need to rely on different exemptions or ensure their conduct does not fall within the prohibitions of sections 197 and 198 of the SFA. The Regulations do not create a general stabilisation regime for all issuances; it is a narrow carve-out for a specific issuance and stabiliser.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework accommodates legitimate market practices while preserving regulatory safeguards. Stabilisation can help manage the early trading period of newly issued notes, but it also carries the risk of undermining fair price formation. By exempting stabilising action only within a strict time window and only with specified counterparties, the Regulations reduce the likelihood that stabilisation becomes a vehicle for prohibited manipulation.
From an enforcement and compliance perspective, the exemption provides clarity. If the stabilising agent and the transaction counterparties meet the conditions in section 3, the stabilising action is not subject to the prohibitions in sections 197 and 198 of the SFA. This matters for legal sign-off, internal controls, and documentation—especially in cross-border issuance contexts where stabilisation may occur “in Singapore or elsewhere”.
For practitioners advising on issuance documentation, underwriting arrangements, or stabilisation mechanics, the Regulations also highlight the need for careful factual alignment. In particular, counsel should ensure that:
- the instrument is within the defined “Notes” (issuer, currency, issuance month, and principal amount scope);
- the stabilising activity is performed by HSBC or its related corporations;
- the stabilising trades occur within 30 days from the date of issue; and
- counterparties are correctly classified and, where relevant, that the $200,000 minimum consideration threshold is satisfied per transaction (including when consideration is exchanged in kind).
Even though the Regulations are dated (2005) and deal-specific, the compliance methodology remains highly relevant: targeted exemptions in Singapore’s market conduct regime often depend on precise definitions and conditions.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the regulation-making power in section 337(1)
- Futures Act (as referenced in the platform’s metadata)
- Stabilising Act (as referenced in the platform’s metadata)
- Timeline / Legislation 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. 48) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.