Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 53) Regulations 2005
- Act Code: SFA2001-S754-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289), specifically section 337(1)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Commencement: 1 December 2005
- Key provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “stabilising action” and the specific note series)
- Section 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising actions
- Schedule: “Relevant subsidiaries” (entities guaranteeing the notes)
- Regulatory status (as provided): Current version as at 27 March 2026
- Legislative identifier: SL 754/2005
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 53) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted exemption instrument made under the Securities and Futures Act (the “SFA”). In plain language, it allows certain market participants to take “stabilising action” in relation to specific bond/notes issuances without breaching particular market conduct prohibitions in the SFA.
Market stabilisation is a practice commonly associated with new securities offerings. Under normal market conduct rules, conduct that has the effect of artificially influencing the price or creating a misleading appearance of market demand can be prohibited. However, regulators often recognise that stabilisation—when done within strict boundaries—can serve a legitimate purpose: reducing volatility and helping the market absorb a new issuance.
This Regulations does not create a general stabilisation regime for all securities. Instead, it is narrow and issuance-specific. It identifies three particular note series—“2013 Floating Rate Notes”, “2013 Fixed Rate Notes”, and “2015 Fixed Rate Notes”—and then provides a time-limited exemption for stabilising actions taken within 30 days from the date of issue, subject to conditions relating to the counterparty type (institutional investor, “relevant person”, or principal acquisition with a minimum consideration threshold).
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the short title and sets the commencement date as 1 December 2005. This matters for practitioners because the exemption only becomes available from that date, and the relevant note issuance and stabilisation activities must be assessed against the timing requirements in Section 3.
2. Definitions (Section 2)
Section 2 is critical because it defines the scope of what is being exempted. It introduces several defined terms:
- “2013 Floating Rate Notes”: 7-year 6-month floating rate guaranteed senior notes due June 2013, issued by Avago entities, up to US$500 million, guaranteed by the “relevant subsidiaries”.
- “2013 Fixed Rate Notes”: 8-year fixed rate guaranteed senior notes due December 2013, up to US$800 million.
- “2015 Fixed Rate Notes”: 10-year fixed rate guaranteed senior subordinated notes due December 2015, up to US$600 million.
- “relevant subsidiaries”: entities listed in the Schedule (i.e., the guarantors).
- “securities”: adopts the meaning in section 239(1) of the SFA.
- “stabilising action”: an action taken in Singapore or elsewhere by specified stabilising parties (Lehman Brothers Inc., Citigroup Global Markets Singapore Pte. Ltd., and Credit Suisse First Boston (Singapore) Limited, and their related corporations) to buy, or to offer or agree to buy, the specified notes in order to stabilise or maintain their market price in Singapore or elsewhere.
From a legal risk perspective, the definition of “stabilising action” is both geographically broad (“in Singapore or elsewhere”) and conduct-specific (buying, offering to buy, or agreeing to buy). It also restricts the stabilising actors to the named investment banks and their related corporations. If a different entity undertakes stabilisation, the exemption may not apply.
3. The exemption from SFA sections 197 and 198 (Section 3)
The operative provision is Section 3. It states that sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of the specified notes, within a defined period, and with specified counterparties.
Time limit: For each note series, the exemption applies only to stabilising action taken within 30 days from the date of issue of that note series. This is a hard temporal boundary. Practitioners should ensure that any stabilisation program, trade logs, and settlement dates are mapped to the “date of issue” and the 30-day window.
Counterparty / participant conditions: For each note series, stabilising action must be taken with one of the following categories:
- (a) an institutional investor
- (b) a “relevant person” as defined in section 275(2) of the SFA
- (c) a person who acquires the notes as principal, provided the consideration for each transaction is not less than $200,000 (or its equivalent in foreign currency), whether paid in cash or by exchange of securities or other assets.
Practical implications of the $200,000 threshold: The exemption is not simply “any buyer.” It is designed to limit stabilisation to transactions involving sophisticated or large-value counterparties. The threshold applies per transaction and covers both cash and non-cash consideration (including exchanges of securities or other assets). Lawyers advising issuers, arrangers, or stabilising agents should therefore scrutinise deal documentation to confirm that the consideration structure satisfies the minimum amount and that the counterparty is acquiring “as principal”.
Note series coverage: Section 3(1) covers the 2013 Floating Rate Notes; Section 3(2) covers the 2013 Fixed Rate Notes; and Section 3(3) covers the 2015 Fixed Rate Notes. The exemption is therefore not interchangeable across issuances; each series has its own 30-day period from its own date of issue.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, three-part format:
- Section 1 (Citation and commencement): sets the legal identity and start date.
- Section 2 (Definitions): provides the interpretive framework, including the specific note series and the definition of “stabilising action”.
- Section 3 (Exemption): contains the substantive exemption, specifying the SFA provisions excluded, the time window, and the permitted counterparty categories.
In addition, the Schedule lists the “relevant subsidiaries” that guarantee the notes. While the extract provided does not reproduce the Schedule text, its function is to anchor the definition of the note series to the correct guarantor entities. For practitioners, the Schedule is often essential when verifying whether a particular issuance falls within the exemption (for example, where corporate restructuring or changes to guarantor entities occur).
Who Does This Legislation Apply To?
This Regulations applies to stabilising action in relation to the specified note series issued by the defined Avago entities and guaranteed by the “relevant subsidiaries” in the Schedule. It is not a general market conduct exemption for all securities or all stabilisation activities.
In terms of persons, the exemption is relevant primarily to the stabilising actors and their counterparties. The definition of “stabilising action” restricts the stabilising parties to Lehman Brothers Inc., Citigroup Global Markets Singapore Pte. Ltd., and Credit Suisse First Boston (Singapore) Limited, and their related corporations. However, the exemption’s practical operation also depends on the counterparty category in Section 3—institutional investors, “relevant persons”, or principal acquirers meeting the $200,000 minimum consideration threshold.
Why Is This Legislation Important?
For practitioners, the importance of this Regulations lies in its role as a precision legal safe harbour within Singapore’s market conduct framework. Sections 197 and 198 of the SFA (not reproduced in the extract) are market conduct provisions that can capture conduct resembling price manipulation or misleading market activity. By carving out stabilising action for specified notes under specified conditions, the Regulations reduces uncertainty for underwriting syndicates and stabilising agents.
From a compliance and enforcement standpoint, the exemption is valuable because it clarifies that certain stabilisation conduct—when performed within the 30-day window and with permitted counterparties—will not trigger the prohibitions in sections 197 and 198. This can be crucial in advising on:
- the design of stabilisation programmes for note issuances;
- trade execution and documentation practices (including evidence of counterparty status and consideration amount);
- internal approvals and compliance sign-offs for stabilisation activities; and
- risk assessments for cross-border stabilisation (since “in Singapore or elsewhere” is expressly contemplated).
Finally, because the exemption is issuance-specific, it also illustrates a broader regulatory approach: MAS may permit stabilisation where the market impact is controlled and where the regulator can tie the exemption to identifiable securities, issuers, guarantors, and stabilising intermediaries. Lawyers should therefore treat this Regulations as a model of how stabilisation exemptions are drafted—narrowly, with defined actors, defined securities, and strict conditions.
Related Legislation
- Securities and Futures Act (Cap. 289): In particular, sections 197, 198, 239(1), 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the provided metadata context).
- Stabilising Act (as referenced in the provided metadata context).
- Timeline / Legislation timeline (for confirming the correct version as at the relevant date).
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. 53) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.