Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 51) Regulations 2004
- Act Code: SFA2001-S761-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Commencement: 21 December 2004
- Enacting authority: Monetary Authority of Singapore (MAS)
- Legislative status: Current version as at 27 March 2026 (per the provided extract)
- Legislation identifier: SL 761/2004
- Key provisions: Section 2 (definitions); Section 3 (exemption)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 51) Regulations 2004 (“Stabilising Action Exemption Regulations”) creates a targeted exemption from certain market conduct rules in the Securities and Futures Act (SFA). In plain language, it allows specified parties to engage in “stabilising action” in relation to a particular issuance of notes without breaching the SFA provisions that would otherwise restrict or regulate certain dealings.
The regulations are narrow and issuance-specific. They define “Notes” as a particular 10-year and 1-month fixed rate notes due January 2015, issued by PT Bank Internasional Indonesia Tbk through its Cayman Islands branch, up to a principal amount of US$200 million. The exemption is designed to facilitate market stability around the initial trading period after the notes are issued—an objective commonly associated with underwriting and issuance practices for debt securities.
At the same time, the exemption is not a blanket permission to trade freely. It is time-limited (within 30 days from the date of issue), limited to stabilising action as defined, and restricted to stabilising counterparties that fall within specified categories (persons referred to in section 274 of the SFA, or sophisticated investors as defined in section 275(2) of the SFA). This structure reflects a regulatory balancing act: enabling legitimate stabilisation while preserving the integrity of the market.
What Are the Key Provisions?
Section 1: Citation and commencement provides the formal name of the regulations and states when they come into operation. The regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 51) Regulations 2004” and they commenced on 21 December 2004. For practitioners, commencement matters because exemptions and compliance obligations generally attach from the effective date.
Section 2: Definitions is central because the exemption only applies if the relevant activity fits within the defined terms. The regulations define two key concepts:
- “Notes”: the specific notes described above (10-year and 1-month fixed rate notes due January 2015, issued by PT Bank Internasional Indonesia Tbk through its Cayman Islands branch, up to US$200 million).
- “stabilising action”: 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 legal risk perspective, the definition is both counterparty-specific (UBS Limited and its related corporations) and purpose-specific (stabilising or maintaining market price). It also covers not only actual purchases but also offers or agreements to buy. Therefore, compliance teams should treat communications and contractual arrangements that could be characterised as “offer or agree to buy” as potentially within scope.
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 respect to dealings involving 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.
Although the extract does not reproduce the text of sections 197 and 198 of the SFA, the regulatory technique is clear: the exemption removes the application of those market conduct provisions for the specified stabilising activity. In practice, this is typically relevant where the SFA would otherwise prohibit or restrict certain conduct that could be construed as market manipulation, improper dealing, or other regulated trading behaviour.
The exemption is therefore best understood as a carve-out rather than a general authorisation. It applies only when all conditions are satisfied: (i) the activity is “stabilising action” as defined; (ii) it relates to the defined “Notes”; (iii) it occurs within the 30-day post-issue window; and (iv) the counterparty is within the specified categories (section 274 persons or sophisticated investors). If any element is missing—wrong notes, wrong counterparty, wrong time period, or wrong purpose—sections 197 and 198 would remain applicable.
How Is This Legislation Structured?
The regulations are structured in a straightforward, short format typical of targeted exemptions:
- Section 1 (Citation and commencement): identifies the instrument and its effective date.
- Section 2 (Definitions): defines the scope-limiting terms (“Notes” and “stabilising action”).
- Section 3 (Exemption): sets out the legal consequence—disapplication of specified SFA provisions—together with the conditions (time window and eligible counterparties).
There are no additional parts or complex procedural provisions in the extract. For practitioners, this means the legal analysis largely turns on interpreting the definitions and ensuring factual compliance with the conditions in section 3.
Who Does This Legislation Apply To?
Although the regulations are made under the SFA and therefore sit within a broader regulatory framework, their practical application is focused. The exemption is relevant primarily to UBS Limited and its related corporations, because the definition of “stabilising action” is limited to actions taken by those entities. However, the exemption also depends on the identity of the counterparty: stabilising action must involve either a person referred to in section 274 of the SFA or a sophisticated investor under section 275(2).
Accordingly, the regulations affect market participants involved in the issuance and trading of the specified notes—particularly those engaged in stabilisation activities during the early trading period. Issuers, arrangers, and compliance advisers should also take note because stabilisation strategies often involve multiple counterparties and documentation flows; the exemption’s eligibility criteria may influence how trades are executed and how counterparties are classified.
Why Is This Legislation Important?
This instrument is important because it provides a regulatory safe harbour for a specific type of market activity—stabilisation of the price of a particular debt issuance—during a defined period. Without such an exemption, stabilisation conduct could be vulnerable to enforcement risk if it falls within the scope of general market conduct prohibitions in the SFA.
From a practitioner’s standpoint, the value lies in the precision of the exemption. It is not a broad permission to trade; it is a carefully bounded disapplication of sections 197 and 198. This precision allows legal teams to structure stabilisation programmes with clearer compliance boundaries: confirm the notes fall within the defined description; ensure the stabilising entity is UBS Limited or a related corporation; implement controls to keep stabilisation within the 30-day window; and verify that counterparties are within the section 274/sophisticated investor categories.
Finally, the regulations illustrate MAS’s approach to market integrity: stabilisation can be legitimate, but regulators require it to be channelled through defined mechanisms and limited counterpart categories. For lawyers advising on debt capital markets transactions, this kind of exemption is a practical tool for aligning underwriting and post-issuance trading practices with Singapore’s market conduct regime.
Related Legislation
- Securities and Futures Act (SFA) (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)
- Timeline (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. 51) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.