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 (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 6 December 2005
- Regulation Number: SL 783/2005
- 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
- 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 specific exemption that allows certain market participants to take “stabilising action” in relation to a particular issuance of notes without being caught by two market conduct prohibitions in the SFA.
Stabilisation is a common feature of capital markets transactions. When new securities are issued, market makers or arrangers may take limited steps to support the trading price in the immediate aftermath of issuance. The policy rationale is to reduce volatility and support orderly trading during the initial period when liquidity may be thin. However, because stabilisation can resemble market manipulation, the SFA contains prohibitions designed to prevent improper conduct.
This legislation resolves that tension by carving out an exemption for stabilising action in respect of a defined set of “Notes” (described in the regulations) and within a defined time window (30 days from the date of issue). The exemption is not open-ended: it is limited to stabilising action taken by specified persons and subject to minimum consideration thresholds for certain categories of participants.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and states that the regulations come into operation on 6 December 2005. For practitioners, this matters primarily for determining whether the exemption was available for stabilising activities conducted after that date, and for aligning transaction timelines with the regulatory framework.
2. Definitions (Regulation 2)
Regulation 2 is crucial because the exemption depends entirely on the defined scope of the “Notes” and the meaning of “stabilising action”. The regulations define:
- “Notes” as 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” by reference to the SFA definition in section 239(1). This cross-reference ensures that the regulatory regime is applied consistently with the SFA’s broader concept of “securities”.
- “stabilising action” 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.
Two practical points follow from these definitions. First, the exemption is transaction-specific: it is tied to a particular Kookmin Bank notes issuance. Second, the exemption is participant-specific: it is linked to Barclays Bank PLC and its related corporations, and to stabilising conduct that involves buying (or offering/agreeing to buy) the Notes.
3. The exemption from SFA market conduct provisions (Regulation 3)
The operative provision is Regulation 3. 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, with respect to stabilising action involving:
- (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 where the consideration 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.
In effect, Regulation 3 creates a narrow safe harbour: stabilising action is exempt from the SFA’s prohibitions only when it is carried out within the first 30 days after issuance and only in dealings involving the specified counterparties (institutional investors, relevant persons, or qualifying principal acquirers with a minimum consideration threshold).
Why the counterparty categories matter
The inclusion of institutional investors and relevant persons reflects a regulatory approach that assumes these counterparties are more sophisticated and subject to existing governance and disclosure expectations. The “relevant person” concept is a defined category under the SFA, and practitioners should treat it as a technical gatekeeper.
The principal-acquirer limb is particularly important for deal structuring. It introduces a minimum consideration threshold of $200,000 per transaction. This threshold is designed to exclude small-lot retail-style participation from the exemption’s protective scope. For lawyers advising on documentation, allocations, or settlement mechanics, the threshold may need to be tracked at the level of each transaction and across any non-cash consideration arrangements (including exchanges of securities or other assets).
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 that determine the scope of the exemption (notably “Notes” and “stabilising action”).
- Regulation 3 contains the exemption itself, specifying the SFA sections excluded, the 30-day time limit, and the counterparty categories and consideration threshold.
There are no additional parts or complex procedural requirements in the extract provided. The legal effect is therefore concentrated in Regulation 3, with Regulation 2 doing the essential scoping work.
Who Does This Legislation Apply To?
Although the regulations are made under the SFA and refer to market conduct provisions, their practical application is limited. The exemption is available only for stabilising action as defined—i.e., actions taken by Barclays Bank PLC or its related corporations to buy (or offer/agree to buy) the specified Kookmin Bank notes to stabilise or maintain market price.
Additionally, the exemption is limited by the counterparty involved in the stabilising transactions. The stabilising action must be taken in dealings with an institutional investor, a relevant person, or a principal acquirer meeting the $200,000 minimum consideration per transaction requirement. Accordingly, the exemption is not a general permission for any market participant or any type of counterparty; it is a carefully bounded carve-out.
Why Is This Legislation Important?
This legislation is important because it demonstrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing manipulative or improper trading practices and (2) allowing legitimate market stabilisation in connection with securities issuance. By exempting stabilising action from specific SFA provisions, the regulations provide legal certainty to arrangers and market makers who would otherwise face potential regulatory risk when engaging in price-support activities.
For practitioners, the value lies in the precision of the exemption. The regulations define the exact notes issuance, identify the stabilising actor (Barclays and related corporations), impose a 30-day post-issuance window, and restrict counterparties through defined categories and a minimum consideration threshold. This means compliance is not merely conceptual; it is operational. Lawyers advising on stabilisation programmes, dealing arrangements, and documentation should ensure that:
- the notes fall within the defined “Notes” description (issuer, tenor, security type, and issuance size);
- the stabilising activity is carried out by the defined entity or its related corporations;
- the activity occurs within the 30-day period from the date of issue;
- deal counterparties are within the permitted categories; and
- for principal acquirers, the $200,000 per transaction threshold is satisfied, including where consideration is non-cash.
Finally, the exemption’s interaction with Sections 197 and 198 of the SFA underscores that stabilisation is not automatically lawful. Instead, it is lawful only to the extent the statutory carve-out applies. In practice, this means that stabilisation programmes should be reviewed for both eligibility (scope and timing) and for any residual obligations that may still apply under the SFA or other regulatory regimes (for example, general disclosure, licensing, or conduct requirements not displaced by the exemption).
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197 and 198 (market conduct provisions referenced for exemption) and the “relevant person” definition in section 275(2); also section 239(1) for the definition of “securities”.
- Futures Act — referenced in the statute metadata (contextual linkage within the broader regulatory framework).
- Stabilising Act — referenced in the statute metadata (contextual linkage within the broader stabilisation framework).
- 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. 54) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.