Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 50) Regulations 2005
- Act Code: SFA2001-S731-2005
- Legislation Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Powers under section 337(1) of the Securities and Futures Act
- Citation: SL 731/2005
- Commencement: 23 November 2005
- Status (as provided): Current version as at 27 March 2026
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Relevant Market Conduct Provisions Exempted: Sections 197 and 198 of the Securities and Futures Act
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 50) Regulations 2005 is a targeted regulatory instrument that creates a narrow exemption from certain “market conduct” rules in the Securities and Futures Act. In practical terms, it allows specified stabilising activities to occur in relation to a particular issuance of notes without triggering the prohibitions contained in sections 197 and 198 of the Act.
Stabilising action is a regulated concept in securities markets. It generally refers to conduct intended to support or maintain the market price of newly issued securities during an initial period after issuance. While such activity can help reduce volatility and support orderly trading, it also carries a risk of undermining market integrity if used improperly. Singapore’s market conduct framework therefore restricts stabilising behaviour, unless an exemption is granted.
This Regulations specifically addresses stabilising action taken in respect of “Notes” defined as the 5-year floating rate notes due November 2010 issued by The Export-Import Bank of Korea, up to a principal amount of US$500 million. The exemption is time-limited and conditional, and it applies only to stabilising action undertaken by a defined stabiliser (UBS AG and related corporations) and only when the counterparty falls within specified categories of investors or acquisition arrangements.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the short title and states that the Regulations came into operation on 23 November 2005. This is important for practitioners because it fixes the temporal scope of the exemption’s availability. Stabilising action outside the relevant period would not benefit from the exemption.
Section 2 (Definitions) sets the boundaries of the exemption by defining three core terms: “Notes”, “securities”, and “stabilising action”. The definition of “Notes” is highly specific: it is limited to the 5-year floating rate notes due November 2010 issued by The Export-Import Bank of Korea, with a principal amount of up to US$500 million. This specificity is a hallmark of Singapore’s approach to exemptions: the exemption is not a general permission to stabilise any notes, but rather a permission tied to a particular instrument and issuance.
The definition of “stabilising action” is also constrained. It covers actions taken in Singapore or elsewhere by UBS AG 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 matters for compliance because it limits the exemption to stabilising conduct by the named stabiliser group. If stabilising activity is undertaken by a different entity, or if it is not directed at stabilising/maintaining market price, the exemption may not apply.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Securities and Futures 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 taken with one of the specified counterparties.
Section 3 then lists three categories of persons with whom the stabilising action may be taken to qualify for the exemption:
- (a) an institutional investor
- (b) a relevant person as defined in section 275(2) of the Act
- (c) a person who acquires the Notes as principal, where 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
From a practitioner’s perspective, the key compliance takeaways are:
- Time limit: stabilising action must occur within 30 days from the date of issue. The “date of issue” becomes critical. If the stabilising activity begins after the 30-day window, the exemption would not apply.
- Counterparty restriction: the stabilising action must be with one of the three categories. This means documentation and trade confirmations should clearly identify the counterparty category.
- Minimum consideration threshold (for principal acquisitions): where the counterparty is a principal acquirer (rather than an institutional investor or relevant person), the transaction value must be at least $200,000 per transaction (or equivalent). The Regulations expressly permit the consideration to be paid in cash or by exchange of securities or other assets, but the value threshold must still be met.
- Exemption is from specific Act provisions: sections 197 and 198 are the targeted prohibitions. The Regulations do not necessarily exempt stabilising action from all other regulatory requirements (for example, disclosure, licensing, or other market conduct rules that may apply under the Act or other subsidiary legislation).
Finally, the Regulations are “made” on 21 November 2005 by the Monetary Authority of Singapore (MAS), signed by Heng Swee Keat, Managing Director. This enacting detail is relevant for formal validity and indicates the instrument’s regulatory authority.
How Is This Legislation Structured?
The Regulations are structured in a compact, three-section format:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that define the scope of the exemption (notably “Notes” and “stabilising action”).
- Section 3 contains the exemption from sections 197 and 198 of the Securities and Futures Act, including the 30-day limit and the counterparty conditions.
There are no additional parts or schedules in the extract provided. The Regulations therefore operate as a bespoke exemption instrument rather than a comprehensive code.
Who Does This Legislation Apply To?
In substance, the exemption is relevant to parties involved in stabilising action in relation to the specified Notes. Although the Regulations are drafted as an exemption from the Act’s provisions, the practical beneficiaries are the entities conducting stabilising trades and the counterparties with whom those trades are executed.
Because “stabilising action” is defined as actions taken by UBS AG or its related corporations, the exemption is effectively directed at that stabiliser group. However, the exemption also depends on the status of the counterparty (institutional investor, relevant person, or principal acquirer meeting the minimum consideration threshold). Accordingly, counterparties and their advisers should also understand their classification and transaction value, since these facts determine whether the exemption is available.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore balances market integrity with the practical realities of securities issuance. Stabilising activities can be beneficial in the immediate post-issuance period, but they are also susceptible to misuse. By limiting the exemption to a specific issuance, a specific stabiliser group, a defined stabilising purpose, a strict time window, and specified counterparty categories, the Regulations reduce the risk that stabilising conduct becomes a loophole for prohibited market manipulation.
For practitioners, the Regulations are particularly significant in transaction planning and compliance. When advising an issuer, lead manager, or stabilising agent, counsel must assess whether the stabilising trades fall within the defined “Notes”, whether the trades occur within the 30-day period from the date of issue, and whether counterparties meet the categories in section 3. These are fact-sensitive questions that should be supported by trade documentation, investor classification evidence, and deal terms showing that the consideration threshold (where relevant) is satisfied.
Enforcement risk is also a practical concern. If stabilising action is undertaken outside the exemption’s conditions, sections 197 and 198 of the Securities and Futures Act may apply, potentially exposing the stabiliser and/or relevant persons to regulatory action. Even where the exemption is available, firms should still ensure that other obligations under the Securities and Futures Act and related regulatory regimes are met, including any requirements relating to market conduct, disclosures, and licensing/authorisation frameworks.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 239(1), 275(2), and the enabling provision 337(1)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Legislation Timeline (for version verification, 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. 50) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.