Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 52) Regulations 2004
- Act Code: SFA2001-S766-2004
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Power Used: Section 337(1) of the Securities and Futures Act
- Commencement: 23 December 2004
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Instrument Number: SL 766/2004
- Status: Current version as at 27 March 2026 (per provided extract)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 52) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument made under the Securities and Futures Act (SFA). In plain terms, it creates a limited exemption from certain market conduct restrictions when specific parties undertake “stabilising action” in relation to a particular bond issuance.
Market conduct rules in the SFA are designed to protect investors and maintain fair and orderly markets. They generally restrict manipulative or misleading trading practices, including conduct that could artificially influence the price of securities. However, in some capital markets transactions—particularly during issuance—market stabilisation is sometimes permitted to reduce volatility and support orderly trading.
This set of Regulations does not establish a general stabilisation regime for all securities. Instead, it is narrowly drafted to apply to a defined set of “Notes” (a specific 5-year US dollar fixed rate note issuance by Industrial Development Bank of India Limited) and to stabilising activities carried out by Barclays Bank PLC (and its related corporations). The exemption is also time-limited: it applies only within 30 days from the date of issue of the Notes.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and 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. 52) Regulations 2004” and come into operation on 23 December 2004. For practitioners, this matters because the exemption is only available for stabilising action that falls within the statutory framework as it operates from that commencement date.
2. Definitions (Regulation 2)
Regulation 2 is critical because the exemption is highly dependent on the defined scope of both the security and the stabilising conduct.
“Notes” are defined as the 5-year US$ fixed rate notes due December 2009 issued by Industrial Development Bank of India Limited, with a principal amount of up to US$300 million. This definition is transaction-specific. It means the exemption cannot be relied upon for other note issuances, even if they are similar in structure or issuer.
“stabilising action” is defined as an action taken in Singapore or elsewhere by Barclays Bank PLC (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. The definition is also broad in terms of conduct: it covers not only actual purchases but also offers or agreements to buy. It also covers stabilisation efforts outside Singapore, which is important for cross-border issuance and trading.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
The core operative provision is Regulation 3. 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, with stabilising action carried out in relation to dealings with either:
- (a) a person referred to in section 274 of the Act; or
- (b) a sophisticated investor as defined in section 275(2) of the Act.
In practical terms, this means that the market conduct prohibitions in sections 197 and 198 are “switched off” for the specified stabilising activity, but only when the stabilising action is undertaken within the specified time window and only in dealings with the specified categories of counterparties.
Why the counterparty limitation matters
The exemption is not a blanket permission to stabilise in any market context. It is conditioned on dealing with persons within the SFA’s defined categories (section 274 persons) or with sophisticated investors. For counsel, this is a compliance checkpoint: stabilising trades must be structured and documented so that counterparties fall within the permitted classes. If stabilising purchases are made outside those categories, the exemption may not apply, exposing the stabilising party to potential breach of the underlying market conduct provisions.
Time limitation
The exemption applies only within 30 days from the date of issue. This is a common feature of stabilisation frameworks: stabilisation is permitted only during the period when the market is forming and price discovery is most volatile. Practitioners should ensure that trading systems, settlement timelines, and recordkeeping align with the “30 days from issue” requirement. The phrase “within 30 days from the date of issue” typically requires careful attention to the relevant “date of issue” for the Notes (as specified in the offering documentation and issuance announcements).
4. Making and signature
The Regulations are made by MAS on 16 December 2004 and signed by Koh Yong Guan, Managing Director. While not a substantive provision, the making formula and signature confirm the instrument’s validity and the regulator’s role in granting the exemption.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
Regulation 1 sets out the citation and commencement date. Regulation 2 provides definitions for “Notes” and “stabilising action,” which are essential to determine the scope of the exemption. Regulation 3 is the operative clause: it exempts stabilising action from specified SFA sections, but only within a defined time period and only for dealings with permitted categories of counterparties.
Notably, the instrument does not contain additional procedural requirements, reporting obligations, or detailed stabilisation mechanics within the extract provided. Instead, it relies on the defined scope and the conditional exemption from the underlying market conduct provisions.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action taken in respect of the defined Notes. The stabilising action must be taken by Barclays Bank PLC or its related corporations. Therefore, the primary regulated actors are the stabilising banks and their corporate group entities that may conduct stabilisation trading.
However, Regulation 3 also imposes conditions based on the counterparty to the stabilising dealings. The exemption is available only where stabilising action is taken with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). As a result, the exemption’s practical availability depends not only on who conducts the stabilising action, but also on who the stabilising trades are executed with.
Why Is This Legislation Important?
This instrument is important because it illustrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing manipulative or unfair trading practices, and (2) allowing legitimate market stabilisation in connection with securities offerings. By exempting stabilising action from specific prohibitions, the Regulations facilitate orderly trading and potentially reduce price volatility during the early post-issuance period.
For practitioners, the key significance lies in the narrow tailoring of the exemption. It is not a general authorisation for stabilisation across all securities. Instead, it is tied to a specific issuance (the defined “Notes”) and a specific stabilising actor (Barclays and related corporations), with a strict time window and counterparty limitations. This narrowness reduces regulatory uncertainty for the transaction but increases the need for careful legal and compliance review for any stabilisation programme.
From an enforcement and risk perspective, the exemption’s conditional nature means that compliance failures can have serious consequences. If stabilising trades fall outside the 30-day window, involve the wrong security, are conducted by an entity not covered by the definition, or are executed with counterparties outside the permitted categories, the exemption may not apply. Counsel should therefore ensure that stabilisation documentation, trading mandates, and counterparty eligibility checks are robust and auditable.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198 (market conduct provisions), sections 274 and 275(2) (counterparty categories), and section 337(1) (making power)
- Futures Act (as referenced in provided metadata)
- Stabilising Act (as referenced in provided metadata)
- Timeline (legislation timeline reference for versioning)
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. 52) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.