Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 49) Regulations 2004
- Act Code: SFA2001-S722-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 8 December 2004
- Legislative status: Current version as at 27 March 2026 (per the provided extract)
- Key provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulatory focus: Exemption from market conduct prohibitions for “stabilising action” relating to specified “Notes”
- Regulation number: SL 722/2004
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 49) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. It creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to a specific issuance of notes.
In plain language, the Regulations recognise that, in some capital markets transactions, market makers or arrangers may take limited steps to stabilise the trading price of newly issued securities. Such stabilisation can reduce volatility immediately after issuance and support orderly trading. However, stabilisation can also resemble prohibited conduct if it is not carefully bounded. The Regulations therefore carve out an exemption—so long as the stabilising action meets the defined conditions.
Importantly, this is not a general stabilisation regime for all securities. The exemption is tied to a defined set of “Notes” (US dollar fixed rate notes issued by State Bank of India in December 2004) and to a defined set of stabilising actors (Citigroup Global Markets Limited and related corporations). It also applies only within a limited time window after issuance.
What Are the Key Provisions?
Section 1 (Citation and commencement). This section provides the short title and states that the Regulations come into operation on 8 December 2004. For practitioners, this matters when assessing whether stabilising conduct occurred within the regulatory framework in force at the relevant time.
Section 2 (Definitions). The Regulations define two central terms:
- “Notes” means the US dollar fixed rate notes issued by State Bank of India in December 2004 for a principal amount of up to US$1,000,000,000.
- “stabilising action” means an action taken in Singapore or elsewhere by Citigroup Global Markets 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 crucial because the exemption in Section 3 only applies if the conduct falls squarely within them. In particular, the actor must be Citigroup Global Markets Limited or a related corporation, and the purpose must be stabilisation/price maintenance. The definition also contemplates actions taken in Singapore or elsewhere, which is relevant for cross-border trading and execution arrangements.
Section 3 (Exemption). 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, with respect to stabilising action taken by either:
- (a) a person referred to in section 274 of the SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
While the extract does not reproduce Sections 197 and 198, the structure indicates that those provisions contain market conduct prohibitions that would otherwise restrict or penalise the relevant trading behaviour. The Regulations therefore suspend those prohibitions for the specified stabilising conduct.
Practical interpretation for lawyers: The exemption is conditional on all of the following:
- Subject matter: the stabilising action must relate to the defined “Notes” (State Bank of India US dollar fixed rate notes issued in December 2004 up to US$1,000,000,000).
- Actor and conduct type: the action must be “stabilising action” as defined—buying, or offering/agreement to buy, by Citigroup Global Markets Limited or its related corporations.
- Timing: it must be taken within 30 days from the date of issue.
- Counterparty/participant category: the stabilising action must be taken with a person who falls within section 274 of the SFA or with a sophisticated investor under section 275(2).
For compliance teams, the most common risk is failing on one of these conditions—especially the 30-day window or the identity/category of the counterparty. Another risk is treating stabilisation as a broad concept and assuming an exemption applies even where the conduct does not fit the defined “buy/offer or agree to buy” mechanics or the stabilisation purpose.
How Is This Legislation Structured?
The Regulations are structured as a short, three-section instrument:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions of “Notes” and “stabilising action”.
- Section 3 contains the exemption from specified SFA provisions (Sections 197 and 198) for stabilising action meeting the conditions.
There are no additional parts or schedules in the provided extract, reflecting the Regulations’ narrow and transaction-specific nature.
Who Does This Legislation Apply To?
Although the exemption is framed as an exemption from the application of SFA provisions, it effectively benefits a limited set of market participants engaged in the specified transaction. The exemption is relevant to:
- Citigroup Global Markets Limited and its related corporations (as stabilising actors), and
- the relevant persons/counterparties involved in the stabilising action—either persons referred to in section 274 of the SFA or sophisticated investors under section 275(2).
Because the “Notes” are specifically identified, the exemption does not generally apply to stabilising actions in relation to other issuances. In other words, the Regulations operate like a transaction-specific permission: they are not a blanket authorisation for stabilisation across the market.
Why Is This Legislation Important?
From a market conduct perspective, the Regulations illustrate how Singapore law balances two competing objectives: (1) preventing manipulative or misleading trading practices, and (2) allowing legitimate market stabilisation in connection with new issues. By exempting stabilising action from Sections 197 and 198 of the SFA, the Regulations provide legal certainty to arrangers and dealers who need to perform stabilisation activities to support orderly trading.
For practitioners, the key significance lies in the conditional nature of the exemption. The Regulations do not merely permit stabilisation; they permit it only when the conduct fits the defined scope and timing. This means that legal review should focus on documentary and operational controls, such as:
- confirming the exact security (the “Notes” definition) and the issue date for calculating the 30-day period;
- verifying that the stabilising trades are executed by (or on behalf of) Citigroup Global Markets Limited or a related corporation;
- ensuring that the stabilising activity is directed at stabilising or maintaining market price (and not for other purposes); and
- confirming that the relevant counterparties fall within the section 274 category or are sophisticated investors under section 275(2).
Enforcement risk remains even with an exemption. If the conditions are not met, the underlying prohibitions in Sections 197 and 198 would apply. Accordingly, the Regulations should be treated as a compliance benchmark rather than a general safe harbour.
Related Legislation
- Securities and Futures Act (Cap. 289) — including Sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Legislation Timeline (for version control and amendments tracking)
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. 49) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.