Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 5) Regulations 2006
- Act Code: SFA2001-S66-2006
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Commencement: 1 February 2006
- Enacting instrument: Monetary Authority of Singapore (MAS)
- Key provisions: Section 2 (definitions); Section 3 (exemption); Schedule (relevant subsidiaries)
- Regulatory purpose (high level): Provides a targeted exemption from market conduct prohibitions for specified “stabilising action” in relation to a particular notes issuance
- Instrument status: Current version as at 27 Mar 2026 (per the provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 5) Regulations 2006 is a narrow, issuance-specific regulatory instrument. In plain terms, it allows certain market participants to take “stabilising action” in the secondary market for a defined set of notes during an initial post-issuance period, without being caught by specific prohibitions in the Securities and Futures Act (SFA).
Market stabilisation is a common practice in capital markets. When new debt securities begin trading, liquidity and price discovery can be volatile. Under controlled conditions, a stabilising manager may buy (or offer to buy) the securities to help maintain orderly trading and reduce extreme price fluctuations. However, stabilisation can resemble prohibited conduct if not properly bounded—hence the need for statutory exemptions.
This Regulations’ scope is deliberately limited. It applies only to stabilising action taken in respect of “Notes” that are precisely identified in the definitions—US$ 5-year floating rate senior notes due February 2011 issued by C&M Finance Ltd., guaranteed by C&M Co., Ltd. and its relevant subsidiaries. It also limits who may take the stabilising action (Citigroup Global Markets Inc. and its related corporations) and when it may be taken (within 30 days from the date of issue). The exemption is therefore not a general permission for any stabilisation activity; it is a carefully tailored carve-out.
What Are the Key Provisions?
Section 1 (Citation and commencement) sets the legal entry point. The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 5) Regulations 2006” and came into operation on 1 February 2006. For practitioners, this matters for compliance timelines—any stabilising action must be assessed against the Regulations’ effective date and the “within 30 days from the date of issue” condition in Section 3.
Section 2 (Definitions) is the heart of the instrument because it defines the boundaries of the exemption. Three definitions are particularly important:
(1) “Notes” are defined with specificity: US$ 5-year floating rate senior notes due February 2011 issued by C&M Finance Ltd. for up to US$700 million, guaranteed by C&M Co., Ltd. and its relevant subsidiaries. This means the exemption is tied to a particular issuance and guarantee structure. If the stabilising activity relates to different notes (even if similar), the exemption would not apply.
(2) “stabilising action” is defined as an action taken in Singapore or elsewhere by Citigroup Global Markets Inc. (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 both participant-specific and purpose-specific. It requires that the action is taken by the specified stabilising entity (Citigroup Global Markets Inc. or related corporations) and that the intent/purpose is stabilisation or maintaining market price.
(3) “relevant subsidiaries” means the entities set out in the Schedule. Even though the extract does not reproduce the Schedule contents, the Schedule is crucial: it determines which guarantor entities fall within the definition of “Notes” (because the guarantee is by C&M Co., Ltd. and its relevant subsidiaries). In practice, counsel should confirm the Schedule list against the transaction documents and the issuer’s guarantee structure.
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, with respect to stabilising action undertaken by any of the following categories of persons:
(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 each transaction is not less than $200,000 (or its equivalent in a foreign currency), whether paid in cash or by exchange of securities or other assets.
This structure is important. The exemption is not simply “Citigroup may stabilise.” Instead, Section 3 frames the exemption by reference to the types of counterparties/participants involved in the stabilising action. Practitioners should read Section 3 as a compliance filter: stabilisation must (i) relate to the defined Notes; (ii) be taken by the defined stabilising entity (per the definition of “stabilising action” in Section 2); (iii) occur within the 30-day window; and (iv) involve a transaction category that fits one of the three exempted classes (institutional investor, relevant person, or principal buyer meeting the minimum consideration threshold).
The $200,000 minimum consideration threshold in Section 3(c) is a classic market conduct safeguard. It helps ensure that the exemption does not extend to small-scale or retail-like trading that could undermine market integrity. For legal teams, this means transaction documentation and trade capture should be able to evidence the consideration per transaction (including if consideration is satisfied by exchange of securities or other assets).
Finally, the exemption is expressly limited to stabilising action “within 30 days from the date of issue.” The “date of issue” is typically a defined term in issuance documentation (often the issue date or closing date). Counsel should ensure the compliance calendar aligns with the transaction’s contractual issue date, and that any stabilisation activity after the 30-day period is assessed under the general SFA market conduct regime rather than relying on this exemption.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, practitioner-friendly way:
Section 1 provides citation and commencement.
Section 2 sets out definitions that determine the scope of the exemption (notably “Notes” and “stabilising action”).
Section 3 contains the exemption clause, specifying which SFA provisions are disapplied and under what conditions (30-day period; categories of persons; and the defined Notes).
The Schedule lists “relevant subsidiaries,” which feed into the definition of the guaranteed notes.
There are no additional parts in the extract, reflecting the Regulations’ targeted nature. This is typical of MAS market conduct exemption regulations: they are designed to be narrow, auditable, and tied to specific transactions.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising action in relation to the specified notes issuance. The exemption is relevant to the stabilising manager and its related corporations (because “stabilising action” is defined by reference to Citigroup Global Markets Inc. and its related corporations). It also applies to stabilising counterparties or participants falling within the categories in Section 3: institutional investors, “relevant persons” under the SFA, and principal acquirers meeting the minimum consideration threshold.
Because the exemption is disapplied from Sections 197 and 198 of the SFA, it is primarily relevant to compliance teams advising on whether particular trading or offers to buy could be characterised as prohibited market conduct. Even if a stabilising manager is the actor, the exemption’s conditions require careful alignment with the defined Notes, the 30-day window, and the transaction category requirements.
Why Is This Legislation Important?
This Regulations is important because it reconciles two competing regulatory objectives: (1) preventing market manipulation and other improper market conduct, and (2) permitting legitimate stabilisation practices that support orderly trading in newly issued securities. By disapplying Sections 197 and 198 of the SFA for qualifying stabilising action, the Regulations provides legal certainty for a specific transaction and reduces the risk that lawful stabilisation is treated as unlawful.
For practitioners, the key value is the precision of the exemption. The Regulations does not offer a broad “stabilisation is always allowed” rule. Instead, it provides a compliance framework: stabilisation must be within the defined scope (specific notes and guarantor structure), performed by the defined stabilising entities, and limited to a defined time period. This precision enables counsel to advise on whether stabilisation activities can be documented and structured to fall within the exemption.
From an enforcement and risk perspective, the absence of the exemption would mean that stabilising trades could potentially be scrutinised under the general market conduct provisions in the SFA. Therefore, the Regulations functions as a risk-management tool: it allows market participants to plan stabilisation with a clear statutory basis, while still requiring strict adherence to the conditions.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — particularly Sections 197 and 198 (market conduct provisions disapplied) and Section 337(1) (power to make regulations); also Section 275(2) (definition of “relevant person”)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (legislation versioning reference tool, as referenced in the provided metadata)
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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.