Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 52) Regulations 2005
- Act Code: SFA2001-S736-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Made under section 337(1) of the Securities and Futures Act
- Commencement: 25 November 2005
- Legislative Instrument Number: SL 736/2005
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
- Regulatory Authority: Monetary Authority of Singapore (MAS)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 52) Regulations 2005 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to a specific issuance of notes.
In plain terms, when new debt securities are issued, there can be volatility in the secondary market as investors establish price discovery. Market stabilisation is a practice—typically undertaken by an investment bank or its affiliates—where it buys (or offers to buy) the securities to help maintain an orderly market price during an initial period. However, stabilisation can resemble prohibited conduct if it is not carefully bounded. This Regulations instrument therefore carves out a narrow exemption so that stabilising actions can occur without triggering the relevant prohibitions, provided strict conditions are met.
The Regulations are not a general framework for all stabilisation. Instead, they are issuance-specific: they define “Notes” as a particular tranche of 7-year fixed rate guaranteed senior notes due November 2012 issued by Hopson Development Holdings Limited, up to US$400 million, guaranteed by certain subsidiaries. The exemption is also time-limited (within 30 days from the date of issue) and person-limited (only certain categories of counterparties/investors and qualifying principal acquisitions).
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the short title and states that the Regulations came into operation on 25 November 2005. For practitioners, this matters because the exemption applies only to stabilising actions taken within the statutory window and in relation to the relevant issuance described in the definitions.
2. Definitions (Section 2)
Section 2 is central because it fixes the scope of the exemption. The Regulations define three key terms:
- “Notes” are precisely identified as the “7-year fixed rate guaranteed senior notes due November 2012” issued by Hopson Development Holdings Limited for up to US$400 million, guaranteed by certain subsidiaries.
- “securities” adopts the meaning in section 239(1) of the SFA. This ensures the exemption is anchored to the SFA’s statutory concept of “securities”, which is broader than “notes” in everyday language.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) 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.
Two practical implications follow. First, the stabilising activity must be undertaken by the named entity (Credit Suisse First Boston (Europe) Limited) or its related corporations. Second, the conduct can occur outside Singapore, but the purpose must be to stabilise or maintain the market price of the Notes in Singapore or elsewhere. This reflects the cross-border nature of capital markets and the regulator’s focus on market conduct outcomes.
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 SFA shall not apply to stabilising actions taken in respect of any of the Notes, within 30 days from the date of issue, provided the stabilising action is taken with one of the specified categories of persons.
The exemption is therefore structured as follows:
- Subject matter: stabilising action in respect of the defined “Notes”.
- Time window: within 30 days from the date of issue of the Notes.
- Counterparty/person categories: stabilising actions must be taken with:
- (a) an institutional investor;
- (b) a relevant person as defined in section 275(2) of the SFA; or
- (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 foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
Why this matters: the exemption is not a blanket permission to stabilise. It is conditional on both (i) the timing and (ii) the identity/qualification of the counterparty. For compliance teams, this means transaction-by-transaction documentation is critical—particularly for category (c), where the $200,000 minimum consideration threshold must be satisfied per transaction, including where consideration is non-cash (e.g., exchange of securities or other assets).
Interaction with SFA market conduct provisions:
Although the text provided does not reproduce sections 197 and 198, the structure indicates that those sections contain prohibitions or restrictions that would otherwise apply to market conduct in relation to securities. The Regulations operate as a statutory carve-out. Practitioners should therefore treat this instrument as a “permission” that modifies the application of the SFA’s general rules for the specified Notes and stabilising actions.
How Is This Legislation Structured?
The Regulations are short and consist of an enacting formula and three substantive sections:
- Section 1 (Citation and commencement): establishes the short title and commencement date (25 November 2005).
- Section 2 (Definitions): defines “Notes”, “securities” (by reference to the SFA), and “stabilising action” (including the actor and the stabilisation purpose).
- Section 3 (Exemption): provides the exemption from SFA sections 197 and 198, limited to stabilising actions within 30 days of issue and only in specified counterparty categories.
From a drafting and compliance perspective, the Regulations are “precision instruments”: they rely heavily on definitions and cross-references to the SFA to ensure the exemption is narrow and enforceable.
Who Does This Legislation Apply To?
The exemption is relevant primarily to the parties conducting stabilising actions and to the counterparties with whom those actions are taken. The stabilising action must be taken by Credit Suisse First Boston (Europe) Limited or its related corporations, and it must relate to the specific Hopson Development Holdings Limited notes described in the definition of “Notes”.
However, the exemption also depends on who the stabilising transactions are conducted with. The Regulations permit stabilising actions (within the 30-day period) only when the counterparty is an institutional investor, a relevant person (as defined in section 275(2) of the SFA), or a principal acquirer meeting the $200,000 per transaction minimum consideration threshold. As a result, issuers, arrangers, and trading desks must ensure that counterparties are correctly classified and that deal terms satisfy the statutory thresholds.
Why Is This Legislation Important?
This Regulations instrument is important because it enables a regulated form of market stabilisation while preserving the integrity of Singapore’s market conduct regime. Without such an exemption, stabilising purchases or offers to buy could potentially be caught by prohibitions in the SFA aimed at preventing manipulation, misleading market activity, or improper trading practices.
For practitioners, the key significance lies in the compliance mechanics. The exemption is time-bound (30 days from issue), issuance-specific (the “Notes” are precisely identified), actor-specific (Credit Suisse First Boston (Europe) Limited and related corporations), and counterparty-specific (institutional investors, relevant persons, or principal acquirers meeting a minimum consideration threshold). These constraints mean that legal review should focus on:
- confirming the stabilised instrument matches the statutory definition of “Notes”;
- verifying the stabilising activity is carried out by the permitted entity/related corporations;
- ensuring stabilising trades occur within the 30-day window; and
- documenting counterparty status and, where relevant, the $200,000 minimum consideration per transaction (including non-cash consideration).
In practice, this instrument supports capital markets transactions by providing legal certainty for stabilisation strategies during the early trading period of a bond issuance. It also demonstrates MAS’s approach: rather than allowing broad discretion, MAS uses targeted exemptions tied to defined market practices and controlled conditions.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the legislation metadata timeline context).
- Stabilising Act (as referenced in the legislation metadata timeline context).
- Legislation Timeline / MAS Legislation Portal (for version control and amendment history).
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.