Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 54) Regulations 2005
- Act Code: SFA2001-S783-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Commencement: 6 December 2005
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “Notes” and “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the Securities and Futures Act for specified stabilising action
- Regulation Number: SL 783/2005
- Status (as provided): Current version as at 27 March 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 54) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted set of subsidiary regulations made under the Securities and Futures Act (SFA). In plain terms, it creates a narrow legal “safe harbour” that allows certain market participants to take stabilising actions in relation to a specific issuance of notes, without breaching the general market conduct prohibitions in the SFA.
Stabilisation is a common feature of certain debt and capital market transactions. During the initial period after issuance, market makers or arrangers may take limited steps to support the trading price or liquidity of the newly issued instrument. However, stabilising conduct can overlap with statutory prohibitions against market manipulation or improper trading practices. This legislation addresses that tension by exempting specified stabilising actions from particular SFA provisions, provided strict conditions are met.
Importantly, the regulations are not a general stabilisation regime for all securities. They are transaction-specific: the definition of “Notes” is tied to a particular 5-year US$ senior unsecured notes issuance by Kookmin Bank, and the definition of “stabilising action” is tied to Barclays Bank PLC (and its related corporations). The exemption is therefore best understood as a bespoke regulatory permission for a particular deal structure and participant set.
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and confirms that the regulations came into operation on 6 December 2005. For practitioners, this matters primarily for determining whether stabilising activities could be conducted lawfully during the relevant post-issuance window.
Section 2 (Definitions) is the core interpretive gateway. It defines three key terms:
- “Notes” means: the 5-year US$ senior unsecured notes due December 2010 issued by Kookmin Bank for a principal amount of up to US$500 million.
- “securities” has the same meaning as in section 239(1) of the SFA (so the exemption operates within the SFA’s definitional framework).
- “stabilising action” means 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.
From a compliance perspective, the definitions are restrictive in two ways. First, stabilising action must be carried out by Barclays Bank PLC or its related corporations. Second, the stabilising conduct must be directed to buying (or offering/agreement to buy) the Notes to stabilise or maintain market price. If a different entity performs similar conduct, or if the conduct is not aimed at stabilisation/price maintenance, the exemption may not apply.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the SFA shall not apply to any stabilising action 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 following categories of counterparties:
- (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, but only if the consideration for the acquisition is not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
Practically, this means the exemption is conditional on both timing (within 30 days from issuance) and counterparty/transaction characteristics. The $200,000 threshold in paragraph (c) is particularly significant. It is designed to limit the exemption to higher-value transactions and reduce the risk that stabilisation could be used to influence retail or low-value trading in ways that the SFA’s market conduct provisions are intended to prevent.
For lawyers advising on transaction execution, the exemption’s structure suggests a compliance checklist: (i) confirm the instrument is within the defined “Notes”; (ii) confirm the stabilising activity is performed by Barclays Bank PLC or its related corporations; (iii) confirm the stabilising activity occurs within the 30-day post-issue period; and (iv) confirm the counterparty falls within one of the three permitted categories and, where relevant, that the minimum consideration threshold is satisfied.
How Is This Legislation Structured?
The regulations are concise and consist of a short enacting framework followed by three substantive provisions:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that control the scope of the exemption, including the specific notes and the specific stabilising actor.
- Section 3 grants the exemption from specified SFA provisions (sections 197 and 198) for stabilising action meeting the timing and counterparty conditions.
There are no additional parts or schedules in the extract provided. The drafting approach is “definition-led”: the exemption is narrow because the definitions are narrow, and the operative exemption in section 3 is correspondingly limited.
Who Does This Legislation Apply To?
Although the regulations are made under the SFA and refer to “securities” and “relevant persons”, the exemption is effectively directed at the parties who may conduct stabilising action in relation to the specified Notes. The definition of “stabilising action” restricts the permitted stabiliser to Barclays Bank PLC and its related corporations. Therefore, the exemption is most relevant to Barclays group entities involved in the issuance or market-making/stabilisation activities.
However, the exemption also depends on the counterparty to the stabilising trades. Section 3 permits stabilising action only when the stabilising trades are with (a) institutional investors, (b) relevant persons (as defined in the SFA), or (c) principal acquirers meeting the minimum consideration threshold. Accordingly, even if the stabiliser is within the Barclays group, the exemption may not cover trades with counterparties outside these categories or trades that fail the $200,000 threshold where paragraph (c) applies.
Why Is This Legislation Important?
This legislation is important because it reconciles two regulatory objectives: (1) maintaining market integrity through prohibitions on improper market conduct, and (2) permitting legitimate market practices that support orderly trading in the immediate aftermath of issuance. By exempting stabilising action from specific SFA provisions, MAS allows transaction participants to carry out stabilisation in a controlled and legally recognised manner.
For practitioners, the key value of the regulations lies in their precision. The exemption is not a blanket permission for any stabilisation. It is limited by instrument identity (“Notes”), actor identity (Barclays group), time window (30 days from issue), and counterparty/consideration conditions. This precision reduces ambiguity and supports defensible compliance decisions—particularly in disputes or enforcement inquiries where the question is whether the conduct fell within the statutory exemption.
From an enforcement and risk-management perspective, the regulations also highlight that stabilisation is treated as potentially sensitive. The SFA’s market conduct provisions (sections 197 and 198) remain the baseline rule; the exemption is an exception that must be strictly satisfied. Lawyers advising issuers, arrangers, and trading desks should therefore treat the exemption as requiring documented compliance with each condition, including evidence of the issuance date, the identity of the Notes, the identity of the stabilising entity, and the classification/value of counterparties.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — particularly sections 197, 198, 239(1), 275(2), and the regulation-making power in section 337(1).
- Futures Act — referenced in the provided metadata as part of the broader regulatory landscape (though not directly engaged in the extract).
- Stabilising Act — referenced in the provided metadata; the extract indicates this is part of the context for stabilisation concepts.
- Timeline / Legislation timeline — for verifying 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. 54) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.