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)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Citation: SL 761/2004
- Commencement: 21 December 2004
- Status: Current version as at 27 March 2026 (per legislation database status)
- Key Provisions: Section 1 (citation and commencement); Section 2 (definitions); Section 3 (exemption)
- Primary Legal Effect: Exempts specified “stabilising action” in respect of specified “Notes” from the application of 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. 51) Regulations 2004 is a targeted regulatory instrument. In plain language, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for a particular bond issuance and for a particular type of market activity—namely, “stabilising action” taken to support or maintain the trading price of the notes shortly after issuance.
Stabilisation is a common feature of capital markets transactions. When new securities are issued, market liquidity and investor demand may be uncertain in the immediate post-issuance period. Under certain frameworks, an arranger or dealer may take limited steps to buy (or offer to buy) the securities to reduce volatility and help maintain an orderly market. However, stabilisation can also raise concerns about market manipulation. Singapore’s SFA therefore contains market conduct provisions that restrict or regulate conduct that could distort prices.
This Regulations package resolves that tension by carving out a specific exemption. It does not create a general right to stabilise. Instead, it is tied to (i) a defined set of “Notes” (a particular 10-year and 1-month fixed rate notes issuance), (ii) a defined “stabilising action” (conduct by UBS Limited or its related corporations), and (iii) a defined time window (within 30 days from the date of issue). The exemption applies only to the extent of the stabilising action described and only against the particular SFA provisions identified in section 3.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal commencement date. 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 come into operation on 21 December 2004. For practitioners, this matters because exemptions are time-sensitive and must be assessed against the relevant transaction timeline.
Section 2 (Definitions) is critical because the exemption is only as broad as its defined terms. Two definitions drive the scope:
- “Notes” are defined very specifically as the 10-year and 1-month fixed rate notes due January 2015 issued by PT Bank Internasional Indonesia Tbk, acting through its Cayman Islands branch, for a principal amount of up to US$200 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.
These definitions mean that the exemption is not available for other securities, other issuers, or stabilisation carried out by other market participants. Even within the same transaction, stabilisation by a party outside the UBS group would not fit the definition of “stabilising action” and would therefore not benefit from the exemption.
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 of the Notes, with respect to stabilising action taken with one of two categories of counterparties:
- (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.
In practical terms, section 3 performs two functions. First, it limits the exemption temporally (30 days from issue). Second, it limits the exemption by counterparty category. The exemption is therefore conditional: stabilising action must be conducted within the permitted period and must involve counterparties that fall within the specified SFA categories.
Although the extract provided does not reproduce sections 197 and 198 or the referenced sections 274 and 275, the legal significance is clear. Sections 197 and 198 are the market conduct provisions from which the exemption is carved out. Sections 274 and 275(2) define who may be treated as an eligible counterparty for this exemption—either a person in the section 274 category or a sophisticated investor. For a practitioner, the key task is to confirm that the stabilising trades, offers, or agreements to buy were executed with eligible counterparties and within the 30-day window.
How Is This Legislation Structured?
The Regulations are structured in a simple, three-section format:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that precisely identify the Notes and the stabilising action covered.
- Section 3 contains the exemption, specifying which SFA provisions are disapplied, the time limit, and the eligible counterparty categories.
There are no additional parts or schedules in the extract. The legislative technique is therefore “definition-led”: the exemption is narrow because the definitions are narrow, and the operative effect is contained in a single exemption clause.
Who Does This Legislation Apply To?
As a subsidiary instrument, the Regulations apply to persons undertaking stabilising action in relation to the defined Notes. In substance, the exemption is aimed at the stabilising participant(s) and their related entities—specifically UBS Limited and its related corporations—because the definition of “stabilising action” is limited to actions taken by that group.
However, the exemption also depends on the counterparty. Section 3 restricts the exemption to stabilising action taken “with” either (a) a person referred to in section 274 of the SFA or (b) a sophisticated investor under section 275(2). Accordingly, even if UBS (or a related corporation) undertakes stabilisation, the exemption will only apply to the extent the stabilising transactions are conducted with eligible counterparties.
Why Is This Legislation Important?
This Regulations instrument is important because it demonstrates how Singapore regulates market conduct while accommodating legitimate market practices. Stabilisation can support price discovery and reduce disorderly trading in the immediate aftermath of issuance. At the same time, stabilisation can be misused to create artificial price signals. By disapplying specific SFA provisions only for a tightly defined set of circumstances, the Regulations seek to allow stabilisation that is consistent with market integrity.
For practitioners, the key value lies in compliance certainty. The exemption provides a legal basis to conduct stabilising activities without breaching the particular SFA provisions identified in sections 197 and 198—provided all conditions are met. This reduces regulatory risk for arrangers, dealers, and their counsel when structuring and documenting stabilisation arrangements for the specified notes.
From an enforcement perspective, the conditional nature of the exemption is equally significant. If stabilising action falls outside the definition (for example, conducted by a non-UBS entity), occurs outside the 30-day period, or is executed with counterparties that do not fall within the section 274 or sophisticated investor categories, the exemption would not apply. In that scenario, the underlying market conduct provisions would remain applicable, potentially exposing the participant to regulatory action or other consequences under the SFA.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Section 337(1) (authorising power for MAS to make regulations)
- Sections 197 and 198 (market conduct provisions disapplied by the exemption)
- Section 274 (eligible counterparty category referenced in section 3)
- Section 275(2) (definition of “sophisticated investor” referenced in section 3)
- Futures Act (listed in metadata as related legislation; relevance would depend on cross-references in the broader regulatory framework)
- Stabilising Act (listed in metadata; relevance would depend on the jurisdictional or historical context of stabilisation regulation)
- Timeline (legislation database timeline reference used to confirm the correct version)
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.