Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 56) Regulations 2005
- Act Code: SFA2001-S789-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 8 December 2005
- Legislation Number: SL 789/2005
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Status (as provided): Current version as at 27 Mar 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 56) Regulations 2005 is a targeted regulatory instrument. In plain terms, it creates a specific exemption from certain “market conduct” rules in the Securities and Futures Act for stabilising activities carried out in relation to a particular issuance of notes.
Market conduct provisions in Singapore’s securities framework are designed to prevent manipulation and unfair trading practices—especially practices that could artificially influence the price or liquidity of securities. However, in some capital markets transactions, stabilisation is a recognised practice: market makers or arrangers may support the price of a newly issued security for a limited period to reduce volatility and improve orderly trading.
This set of Regulations permits such stabilising action in respect of a defined set of “Notes” (a particular 5-year fixed rate guaranteed secured notes issuance) during a limited window after issuance. The exemption is not general; it is tightly defined by the type of notes, the stabiliser, the time period, and the categories of persons who may participate.
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 8 December 2005. For practitioners, this matters because the exemption only becomes available from the commencement date, and it frames the regulatory context for any stabilising activity undertaken thereafter.
2. Definitions (Regulation 2)
Regulation 2 is crucial because it defines the scope of the exemption. Three defined terms drive the analysis:
(a) “Notes”
The Regulations define “Notes” as the 5-year fixed rate guaranteed secured notes due December 2010 issued by Adaro Finance B.V. for a principal amount of up to US$500 million. The definition further specifies that the notes are unconditionally and irrevocably guaranteed by PT Adaro Indonesia and PT Indonesia Bulk Terminal. This means the exemption is tied to a particular instrument and issuer/guarantor structure, not to any generic “notes” offering.
(b) “securities”
“securities” has the same meaning as in section 239(1) of the Securities and Futures Act. This cross-reference ensures that the exemption operates within the Act’s established classification of securities.
(c) “stabilising action”
“stabilising action” is defined as an action taken in Singapore or elsewhere by Goldman Sachs (Singapore) Pte or any of its related corporations. The action must involve buying, or offering or agreeing to buy, any of the Notes in order to stabilise or maintain the market price of the Notes in Singapore or elsewhere. This definition is highly restrictive: it identifies the stabilising entity (Goldman Sachs (Singapore) Pte and related corporations) and ties the purpose of the trades to stabilisation/price maintenance.
3. The exemption from Sections 197 and 198 of the Act (Regulation 3)
The operative provision is Regulation 3. It states that Sections 197 and 198 of the Securities and Futures Act shall not apply to stabilising action taken in respect of the Notes, within 30 days from the date of issue of the Notes, provided the stabilising action is taken by one of the specified categories of persons.
For a practitioner, the key legal effect is that the market conduct prohibitions (contained in Sections 197 and 198) are carved out for stabilising action that meets all conditions. While the extract does not reproduce Sections 197 and 198, the typical function of such provisions in market conduct regimes is to prohibit manipulative or misleading conduct and certain trading practices. The exemption therefore allows stabilisation that would otherwise be unlawful or restricted under those sections.
Time limit: The exemption applies only to stabilising action taken within 30 days from the date of issue. This is a classic stabilisation feature: it limits the period during which price support may occur, reducing the risk of prolonged market distortion.
Eligible persons (Regulation 3(a)–(c)): Stabilising action must be taken with respect to the Notes by one of the following:
(a) an institutional investor;
This category captures sophisticated market participants. The precise meaning of “institutional investor” would be determined by the Securities and Futures Act framework (not reproduced in the extract), but the intent is to limit stabilisation to professional participants rather than retail actors.
(b) a “relevant person” as defined in section 275(2) of the Act;
This is another Act-based cross-reference. “Relevant person” is typically used in Singapore’s market conduct and licensing/regulated activity context to define persons who are within a regulatory perimeter (for example, persons connected to the offer, intermediaries, or persons subject to particular obligations). The exemption therefore depends on the statutory definition.
(c) a person who acquires the Notes as principal where the consideration 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.
This is a minimum consideration threshold. It functions as a gatekeeping mechanism: it ensures that stabilisation-related acquisitions by principal are only permitted where the transaction size is sufficiently large. The threshold applies regardless of whether the consideration is cash or non-cash (including exchange of securities or other assets), which is important for structured deals where consideration may be settled through asset exchanges.
Practical compliance point: Because Regulation 3 requires that stabilising action be taken “with” the specified categories of persons, market participants must be able to document that the stabilisation trades were executed by (or for) eligible persons and that the transaction consideration (where reliance is on Regulation 3(c)) meets the $200,000 threshold per transaction.
4. Making and signature
The Regulations were made on 2 December 2005 by Heng Swee Keat, Managing Director of the Monetary Authority of Singapore (MAS). The enacting formula and signature are relevant for validity and for confirming MAS’s exercise of the delegated power under section 337(1) of the Securities and Futures Act.
How Is This Legislation Structured?
Despite being a short instrument, the Regulations have a clear structure:
Regulation 1 sets out the citation and commencement date.
Regulation 2 provides definitions that determine the scope of “Notes” and “stabilising action,” and cross-references the Act’s definition of “securities.”
Regulation 3 contains the substantive exemption, specifying (i) which Act provisions are disapplied, (ii) the time window (30 days from issue), and (iii) the eligible categories of persons (institutional investor, relevant person, or principal acquirer meeting the minimum consideration threshold).
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to a specific notes issuance. In practice, it applies to the stabilising entity and the persons involved in the stabilisation trades, but only to the extent the action falls within the defined “stabilising action” and the defined “Notes.”
Because “stabilising action” is defined as actions taken by Goldman Sachs (Singapore) Pte or its related corporations, the exemption is effectively available to that stabiliser (and related corporations) when they conduct stabilisation trades in the Notes. Additionally, the trades must be taken within 30 days of issue and must involve one of the eligible categories of persons: an institutional investor, a relevant person under section 275(2), or a principal acquirer meeting the $200,000 per transaction threshold.
Why Is This Legislation Important?
This Regulations matters because it illustrates how Singapore’s market conduct framework balances two competing objectives: preventing market manipulation and enabling orderly market functioning during new issuance. Stabilisation can be legitimate and beneficial, but it can also resemble prohibited conduct if not carefully constrained. By carving out stabilising action from Sections 197 and 198, MAS permits a controlled form of price support while maintaining the overall integrity of the market conduct regime.
For practitioners advising issuers, arrangers, dealers, and institutional investors, the Regulations provide a clear compliance roadmap. The exemption is not automatic; it is conditional. Lawyers must assess whether the instrument qualifies as “Notes” under the definition, whether the stabilisation activity is performed by the defined stabiliser (Goldman Sachs (Singapore) Pte or related corporations), whether the trades occur within the 30-day window from the date of issue, and whether the counterparty/participant fits within the eligible person categories.
From an enforcement perspective, the exemption also signals MAS’s approach: exemptions are narrow, time-limited, and tied to specific transaction structures. This reduces regulatory uncertainty and helps market participants implement stabilisation programmes with appropriate documentation and internal controls.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly Sections 197, 198, 239(1), 275(2), and the enabling power in section 337(1)
- Futures Act (as referenced in the provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- Timeline (legislation timeline reference as provided in the metadata)
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. 56) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.