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) (Cap. 289), specifically section 337(1)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 1 February 2006
- Legislative Status: Current version as at 27 Mar 2026 (per the provided extract)
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption); Schedule (Relevant subsidiaries)
- Regulatory Focus: Exemption from market conduct provisions for “stabilising action” relating 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 2006 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory carve-out within Singapore’s broader market conduct framework. In plain terms, it allows certain market participants to take stabilising steps in relation to a specific issuance of notes without being treated as breaching the general prohibitions in the Securities and Futures Act (SFA) on market manipulation or improper dealing.
The Regulations are narrow by design. They do not establish a general permission for stabilisation in all debt offerings. Instead, they define a particular set of “Notes” (a US$ 5-year floating rate senior notes programme issued by C&M Finance Ltd., guaranteed by C&M Co., Ltd. and specified subsidiaries) and then exempt stabilising action taken in respect of those Notes within a limited time window after issuance.
From a practitioner’s perspective, the Regulations are best understood as a compliance tool: they reduce legal uncertainty for stabilisation activity by clarifying when the SFA’s market conduct provisions will not apply. This is particularly important for underwriting syndicates, dealers, and their related entities that may wish to support secondary market pricing during the early trading period after a bond issuance.
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the short title and states that the Regulations come into operation on 1 February 2006. This matters for determining whether stabilising activity undertaken around the issuance period falls within the regulatory framework.
2. Definitions (Section 2)
Section 2 is central because the exemption is only available if the activity falls within the defined scope. The Regulations define four key terms:
- “Notes”: These are precisely identified as US$ 5-year floating rate senior notes due February 2011 issued by C&M Finance Ltd. for a principal amount of up to US$700 million, guaranteed by C&M Co., Ltd. and its “relevant subsidiaries”.
- “relevant subsidiaries”: This term points to the Schedule, which lists the entities covered by the guarantee structure for the Notes. The Schedule is therefore not decorative; it determines which group companies are within the defined perimeter.
- “securities”: This adopts the meaning in section 239(1) of the SFA, ensuring the Notes are treated consistently with the SFA’s definitional approach.
- “stabilising action”: This 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.
Practical implication: the exemption is not available to every dealer or issuer. It is tied to stabilisation activity by Citigroup Global Markets Inc. and its related corporations, and it is tied to the specific Notes described. If a different institution conducts stabilisation, or if the notes are not the specified C&M issuance, the exemption would not apply.
3. The exemption from SFA sections 197 and 198 (Section 3)
Section 3 is the operative provision. It states that sections 197 and 198 of the Act shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue of the Notes, provided the stabilising action is undertaken by one of the following categories of persons:
- (a) an institutional investor;
- (b) a relevant person as defined in section 275(2) of the Act; or
- (c) a person who acquires the Notes as principal, where 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.
Time limitation: The exemption is explicitly limited to stabilisation activity occurring within 30 days from the date of issue. This is a classic market practice feature: stabilisation is typically most relevant immediately after issuance when price discovery is still forming. After the 30-day period, the exemption would no longer protect the activity, and the general SFA market conduct rules would apply.
Person-based conditions: The exemption is also conditional on the stabilising actor falling within one of the listed categories. The inclusion of “institutional investor” and “relevant person” suggests that the SFA’s market conduct framework already distinguishes between different classes of participants. The third category—acquisition as principal with a minimum consideration threshold—functions as a quantitative gatekeeper to prevent small-scale or retail-like transactions from being swept into the exemption.
Minimum consideration threshold: The $200,000 per transaction threshold (or equivalent) is particularly relevant for structuring and documentation. It affects whether a principal acquisition qualifies for the exemption, including scenarios where consideration is non-cash (e.g., exchange of securities or other assets). Practitioners should ensure transaction records clearly evidence the consideration value per transaction.
4. Schedule: “Relevant subsidiaries”
While the provided extract does not reproduce the Schedule content, the Regulations clearly rely on it. The Schedule determines which entities are “relevant subsidiaries” for the purpose of defining the Notes’ guarantee structure. For due diligence and legal opinion work, confirming the Schedule list is essential to ensure the Notes are indeed within the defined “Notes” term.
How Is This Legislation Structured?
The Regulations are structured in a conventional subsidiary legislation format with a short set of provisions and a schedule:
- Section 1 (Citation and commencement) sets the legal identity and effective date.
- Section 2 (Definitions) defines the scope-critical terms: “Notes”, “relevant subsidiaries”, “securities”, and “stabilising action”.
- Section 3 (Exemption) provides the substantive carve-out from SFA sections 197 and 198, including the 30-day time limit and the categories of persons eligible for the exemption.
- The Schedule lists the “relevant subsidiaries” that are part of the guarantee chain for the Notes.
Notably, the Regulations do not contain detailed procedural requirements (such as reporting, notifications, or specific stabilisation mechanics) within the extract. Instead, they operate as a legal exemption instrument that interacts with the SFA’s existing market conduct provisions and definitions.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action taken in respect of the specified C&M Finance Ltd. notes, but only when the stabilising action is taken by Citigroup Global Markets Inc. (or its related corporations) as defined in Section 2. This means the exemption is not universally available to all market participants; it is tied to a particular stabilisation participant and a particular bond issuance.
In addition, Section 3 limits the exemption to stabilising action undertaken by persons who fall into one of the three categories: (i) an institutional investor; (ii) a “relevant person” under section 275(2) of the SFA; or (iii) a principal acquirer meeting the $200,000 minimum consideration threshold per transaction. Accordingly, even where stabilisation is conceptually “stabilising action”, the exemption may fail if the actor does not meet the statutory category requirements.
Why Is This Legislation Important?
This Regulations is important because it clarifies the boundary between permissible market support and prohibited market conduct. Stabilisation activity can resemble conduct that, absent an exemption, might be characterised as improper dealing or market manipulation. By carving out stabilising action for a defined bond issuance and a defined period, the Regulations help market participants manage regulatory risk and comply with the SFA.
For practitioners, the key value lies in its precision: it defines the Notes, the stabilising actor (Citigroup Global Markets Inc. and related corporations), and the eligibility criteria for the stabilising actor (institutional investor, relevant person, or principal acquirer with a minimum consideration threshold). This precision supports targeted legal advice, including:
- assessing whether a proposed stabilisation strategy falls within the exemption;
- confirming whether the bond issuance matches the defined “Notes” (including the guarantee structure via the Schedule);
- verifying whether the stabilisation period is within 30 days from the date of issue; and
- ensuring transaction documentation supports the $200,000 per transaction threshold where relevant.
From an enforcement perspective, the exemption also signals MAS’s approach: stabilisation is not automatically unlawful, but it must be constrained to specific circumstances. The Regulations therefore operate as a controlled permission rather than a blanket authorisation, preserving the integrity of Singapore’s market conduct regime while accommodating common underwriting-market practices.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the enabling provision section 337(1)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (legislation timeline tool 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.