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
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Authorising Provision: Section 337(1) of the Securities and Futures Act
- Regulation Number: SL 789/2005
- Commencement: 8 December 2005
- Status (as provided): Current version as at 27 Mar 2026
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
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 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. In essence, it creates a narrow exemption from certain market conduct rules in the Securities and Futures Act (“SFA”) for specific “stabilising action” relating to a particular issuance of notes.
Market conduct provisions in the SFA are designed to prevent manipulative or misleading trading practices and to ensure that market participants do not artificially influence prices or create a false impression of market demand. However, in certain capital markets transactions—particularly bond and note issuances—market stabilisation practices may be used to support orderly trading and mitigate volatility immediately after issuance. This legislation recognises that reality by carving out a controlled exemption.
Importantly, the exemption is not general. It applies only to stabilising action taken in respect of a defined set of “Notes” (a specific 5-year fixed rate guaranteed secured notes issuance) and only within a defined time window after issue. It also applies only when stabilising action is undertaken by a defined market participant (Goldman Sachs (Singapore) Pte and its related corporations) and when the stabilising activity is directed at specified categories of counterparties.
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 is time-bound and depends on the issuance date and the conduct occurring within the statutory window. The commencement date confirms that the exemption framework was effective from the date specified in the instrument.
2. Definitions (Regulation 2)
Regulation 2 is critical because it tightly constrains the scope of the exemption. The Regulations define three key terms:
- “Notes”: These are specifically defined as the 5-year fixed rate guaranteed secured notes due December 2010 issued by Adaro Finance B.V. for up to US$500 million, and unconditionally and irrevocably guaranteed by PT Adaro Indonesia and PT Indonesia Bulk Terminal.
- “securities”: This adopts the meaning given in section 239(1) of the SFA, ensuring that the exemption operates within the SFA’s defined regulatory universe.
- “stabilising action”: This is defined as an action taken in Singapore or elsewhere by Goldman Sachs (Singapore) Pte 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 mean that stabilisation must be (i) in relation to the specified notes, (ii) undertaken by the specified stabiliser (Goldman Sachs (Singapore) Pte or related corporations), and (iii) directed at stabilising or maintaining market price. Any stabilising activity outside these parameters would not benefit from the exemption.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
The operative provision is Regulation 3. It states that sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue of the Notes, provided the stabilising action is taken with certain categories of persons.
While the extract does not reproduce sections 197 and 198, the practical effect is that the exemption removes the application of those market conduct restrictions to the stabilising conduct described. In other words, the stabiliser can carry out stabilisation trades without being treated as breaching the relevant prohibitions in those SFA sections—so long as all conditions are satisfied.
Counterparty conditions
Regulation 3 limits the exemption to stabilising action taken with:
- (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 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 structure is designed to ensure that stabilisation is conducted with counterparties that are either sophisticated (institutional investors), within a defined regulatory category (“relevant persons”), or meet a minimum investment threshold (principal acquirers with at least $200,000 consideration per transaction). The threshold is also flexible: it can be satisfied by cash or by exchanging securities or other assets, which is common in structured issuance and allocation arrangements.
Time limitation
The exemption is also strictly time-limited: stabilising action must occur within 30 days from the date of issue of the Notes. This is a common feature of stabilisation regimes internationally. For practitioners, the key compliance task is to document the date of issue and ensure that stabilisation orders, trades, and offers to buy (including agreements to buy) fall within the 30-day window.
Who makes the exemption and formalities
The Regulations were made by the Monetary Authority of Singapore (“MAS”) on 2 December 2005, signed by Heng Swee Keat, Managing Director of MAS. This confirms the legal authority and formal enactment process under section 337(1) of the SFA.
How Is This Legislation Structured?
The Regulations are short and consist of an enacting formula and three substantive provisions:
- Regulation 1 (Citation and commencement): sets the short title and commencement date (8 December 2005).
- Regulation 2 (Definitions): defines “Notes”, “securities”, and “stabilising action”. These definitions are the gatekeepers for whether conduct is within scope.
- Regulation 3 (Exemption): provides the exemption from the application of SFA sections 197 and 198, subject to the 30-day limit and the counterparty conditions.
There are no additional parts or complex schedules in the extract provided. The legislative design is therefore “precision by definition”: the exemption is narrow because the definitions and conditions are narrow.
Who Does This Legislation Apply To?
Although the Regulations are framed as an exemption from provisions of the SFA, the practical beneficiaries are the entities that may conduct stabilising action in relation to the defined Notes. By definition, “stabilising action” is limited to actions taken by Goldman Sachs (Singapore) Pte or its related corporations. Accordingly, the exemption is effectively aimed at that stabilisation activity.
However, the exemption also depends on the counterparty to the stabilisation trades or offers. The Regulations therefore indirectly affect other market participants involved in the issuance and trading of the Notes—particularly institutional investors, “relevant persons” under the SFA, and principal acquirers meeting the minimum consideration threshold.
For lawyers advising issuers, arrangers, dealers, or investors, the key point is that the exemption is not a blanket permission to stabilise. It is a conditional carve-out that must be matched to the defined stabiliser, the defined notes, the defined time period, and the defined counterparty categories.
Why Is This Legislation Important?
This Regulations matters because it demonstrates how Singapore’s market conduct framework balances two competing objectives: (i) preventing market manipulation and improper conduct, and (ii) allowing legitimate market stabilisation practices in the context of securities issuance. By exempting stabilising action from specified SFA provisions, MAS provides regulatory certainty to the stabilising dealer and reduces the risk that ordinary stabilisation trades could be treated as prohibited conduct.
From a practitioner’s perspective, the most significant value of this instrument lies in its compliance boundaries. The exemption is only available if the stabilisation activity is within 30 days from the date of issue and is conducted with eligible counterparties. These are precisely the facts that compliance teams must track: trade dates, offer/agree-to-buy dates, counterparty classification, and transaction consideration (for principal acquirers).
In addition, the Regulations illustrate the drafting approach used in Singapore for stabilisation exemptions: rather than creating a broad stabilisation regime, MAS issues targeted regulations for particular issuances. This means that legal advice must be issuance-specific. A stabilisation strategy that works for one note issuance may not be covered for another unless a similar exemption exists.
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 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.