Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 5) Regulations 2005
- Act Code: SFA2001-S63-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Enacting authority: Monetary Authority of Singapore (MAS)
- Commencement: 1 February 2005
- Current status (as provided): Current version as at 27 Mar 2026
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory focus: Exemption from market conduct prohibitions for stabilising actions in relation to specified notes
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 5) Regulations 2005 (“Stabilising Exemption Regulations”) is a targeted regulatory instrument. In plain terms, it creates a limited exemption that allows certain market participants to take “stabilising action” in connection with a specific issuance of notes, without breaching the general market conduct rules that would otherwise apply.
In Singapore’s securities regulatory framework, market conduct provisions are designed to prevent manipulation and unfair trading practices. However, stabilisation practices—commonly used in bond and note offerings—may be permitted in controlled circumstances because they can support orderly trading immediately after issuance. This legislation is therefore not a general authorisation for stabilisation; it is a narrow carve-out tied to a particular set of notes, a defined stabilising actor, and a strict time window.
Practically, the Regulations operate as a “permission by exemption”: they remove the applicability of certain prohibitions in the Securities and Futures Act (SFA) to stabilising actions that meet the specified conditions. The exemption is time-bound (within 30 days from the date of issue) and applies only to stabilising action in respect of the defined “Notes”.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal citation and states that the Regulations come into operation on 1 February 2005. This matters for compliance planning: stabilising activities must be assessed against the law in force at the relevant time, particularly where stabilisation occurs around issuance dates.
Section 2 (Definitions) is central because it determines the scope of the exemption. Two defined terms do the work:
- “Notes” are defined very specifically as the 7-year fixed rate notes due February 2012 issued by hanarotelecom incorporated for a principal amount of up to US$750 million.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by UBS 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.
From a practitioner’s perspective, the definition is both actor-specific and purpose-specific. The exemption is not available to any firm, and it is not available for any trading activity. It is limited to stabilisation intended to maintain or stabilise market price, and it is tied to UBS Limited and its related corporations.
Section 3 (Exemption) 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 two additional conditions regarding the counterparty or relevant person:
- the stabilising action must be taken with a person referred to in section 274 of the Act; or
- the stabilising action must be taken with a sophisticated investor as defined in section 275(2) of the Act.
Although the extract does not reproduce Sections 197, 198, 274, and 275(2), the structure indicates that the SFA’s market conduct prohibitions in Sections 197 and 198 are being disapplied only in the circumstances described. The “within 30 days” requirement is a hard compliance boundary: stabilising action outside that period would generally fall back into the default regime, risking breach of the underlying prohibitions.
The counterparty limitation is also significant. Even where stabilisation is otherwise conceptually permitted, the exemption is conditioned on dealing with specified categories of persons (section 274 persons) or sophisticated investors. For legal review, this means firms must document not only the stabilising purpose and timing, but also the identity and status of the counterparties involved in the stabilising trades.
Finally, the exemption is tied to the defined “Notes” and to “stabilising action” by UBS Limited (or related corporations). This makes the Regulations effectively a transaction-specific exemption. A different issuer, different note terms, or a different stabilising arranger would not automatically qualify.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that delimit the scope of “Notes” and “stabilising action”.
- Section 3 contains the exemption from the application of specified SFA provisions (Sections 197 and 198), subject to timing and counterparty conditions.
There are no additional parts or complex schedules in the extract. The drafting approach is typical for targeted exemptions: define the instrument and actor precisely, then carve out the relevant prohibitions for a limited period and limited dealing counterparties.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising dealings in the specified notes, but the exemption is most relevant to UBS Limited and its related corporations, because the definition of “stabilising action” is limited to actions taken by them. If another financial institution were to conduct stabilisation in relation to the same notes, the exemption would not necessarily apply unless the action falls within the defined stabilising actor scope.
Additionally, the exemption’s effect depends on who the stabilising trades are conducted with. The stabilising action must be taken with either (i) a person referred to in section 274 of the SFA, or (ii) a sophisticated investor under section 275(2). Therefore, the Regulations indirectly impose compliance obligations on the stabilising actor to ensure the counterparty status is properly established and evidenced.
Why Is This Legislation Important?
This legislation is important because it illustrates how Singapore balances two regulatory goals: preventing market misconduct while allowing legitimate market practices such as stabilisation in primary offerings. Without an exemption, stabilising trades could be characterised as conduct prohibited under the SFA’s market conduct provisions. By disapplying Sections 197 and 198 in defined circumstances, the Regulations provide legal certainty for stabilisation activities that are intended to support orderly trading.
For practitioners, the key significance lies in the precision of the exemption. The Regulations are not a blanket permission for any stabilisation. Instead, they are constrained by:
- Specific notes (issuer, tenor, due date, and maximum principal amount);
- Specific stabilising actor (UBS Limited and related corporations);
- Specific conduct (buying, offering, or agreeing to buy to stabilise or maintain market price);
- Specific timing (within 30 days from the date of issue); and
- Specific counterparties (section 274 persons or sophisticated investors).
From an enforcement and risk perspective, these constraints mean that compliance failures—such as trading outside the 30-day window, trading with the wrong counterparty category, or conducting stabilisation through an entity not within the defined actor scope—could expose the stabilising activity to the underlying prohibitions in Sections 197 and 198 of the SFA. Accordingly, counsel advising on bond issuance documentation, stabilisation arrangements, and post-issuance trading controls should treat this exemption as a compliance checklist rather than a general market practice allowance.
In addition, because the Regulations are “current” as at 27 March 2026 (per the provided status), practitioners should still verify whether any amendments or repeals have occurred since 2005. Even if the instrument is old, the legal effect may remain relevant for historical transactions or for understanding how MAS has structured stabilisation exemptions in Singapore’s regulatory regime.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular, the market conduct provisions referenced in the exemption (Sections 197 and 198) and the counterparty definitions referenced (Sections 274 and 275(2)), as well as the regulation-making power in section 337(1).
- Futures Act — referenced in the provided metadata as part of the broader legislative environment.
- Stabilising Act — referenced in the provided metadata (for contextual understanding of stabilisation concepts).
- Timeline — the legislation timeline tool referenced in the provided metadata, relevant for confirming the correct version as at a given date.
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. 5) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.