Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 57) Regulations 2005
- Act Code: SFA2001-S790-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Legislative Instrument No.: SL 790/2005
- Citation: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 57) Regulations 2005
- Commencement: 9 December 2005
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Status: Current version as at 27 March 2026 (per the legislation record)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 57) Regulations 2005 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct prohibitions under the Securities and Futures Act (SFA). In plain terms, it allows specified parties to take “stabilising action” in relation to a particular bond issuance—without triggering the prohibitions that would otherwise apply.
Stabilising action is a common feature of capital markets transactions. When new debt securities are issued, market liquidity and price discovery can be volatile. Under certain conditions, market participants may buy (or offer to buy) the securities to help maintain orderly trading and reduce extreme price fluctuations. However, stabilisation can resemble prohibited conduct if it is not carefully bounded. This legislation therefore balances two objectives: (i) permitting stabilisation that supports orderly markets, and (ii) preserving the integrity of the market by limiting when, how, and by whom stabilisation may occur.
Importantly, this exemption is not general. It is tailored to a specific set of “Notes” and to stabilising action taken by a specific firm (Morgan Stanley & Co. International Limited) and its related corporations. It also imposes time and consideration thresholds, and it limits the exemption to stabilising action taken within 30 days from the date of issue of the Notes.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal name of the Regulations and states that they came into operation on 9 December 2005. For practitioners, this matters when assessing whether stabilising trades occurred after the Regulations took effect.
Section 2 (Definitions) is central because the exemption depends entirely on whether the relevant instrument and conduct fall within the defined terms. The Regulations define:
- “Notes” as the 10-year fixed rate senior notes due December 2015 issued by Chinese Future Corporation for up to US$400 million, and unconditionally and absolutely guaranteed by Chinese Future Limited.
- “securities” by reference to the SFA definition in section 239(1), ensuring that the Notes are treated within the SFA’s securities framework.
- “stabilising action” as an action taken in Singapore or elsewhere by Morgan Stanley & Co. International Limited (or any of its related corporations) to buy, or 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.
This definition is practitioner-relevant in two ways. First, it restricts stabilisation to a particular stabiliser group (Morgan Stanley and related corporations). Second, it clarifies that stabilisation can occur outside Singapore, but the purpose is to stabilise or maintain the market price “in Singapore or elsewhere.” That language supports the cross-border nature of bond trading and issuance.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of the Notes, within 30 days from the date of issue, with respect to stabilising action taken by any of the following categories of persons:
- (a) an institutional investor;
- (b) a relevant person as defined in section 275(2) of the SFA; or
- (c) a person who acquires the Notes as principal, provided 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.
In practical terms, the exemption operates as a “safe harbour” from the SFA’s market conduct prohibitions in the specified circumstances. The key conditions are:
- Time window: stabilising action must be taken within 30 days from the date of issue of the Notes.
- Instrument specificity: the conduct must relate to the defined Notes (the Chinese Future Corporation issuance guaranteed by Chinese Future Limited).
- Conduct specificity: the action must fall within the defined “stabilising action” (buying, offering, or agreeing to buy by Morgan Stanley and related corporations for stabilisation purposes).
- Counterparty/participant categories: the exemption applies only where the stabilising action is taken by one of the listed categories (institutional investor; relevant person; or principal acquirer meeting the $200,000 minimum consideration threshold).
For lawyers advising on compliance, the most common risk is inadvertent conduct outside the boundaries—e.g., stabilisation beyond the 30-day period, stabilisation by an entity not within the defined stabiliser group, or transactions that do not meet the minimum consideration threshold for principal acquisitions. The Regulations’ structure makes these boundaries explicit.
How Is This Legislation Structured?
The Regulations are concise and consist of three main provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of the exemption—particularly the definitions of “Notes” and “stabilising action”.
- Section 3 contains the exemption from the SFA’s market conduct provisions (sections 197 and 198), subject to the time limit and the specified categories of persons.
There are no additional parts or schedules in the extract provided, reflecting the Regulations’ purpose as a transaction-specific exemption instrument rather than a broad regulatory framework.
Who Does This Legislation Apply To?
This legislation applies to stabilising action in relation to the defined Notes. While the exemption is framed as an exemption from the SFA’s sections 197 and 198, it is triggered only when the stabilising action meets the definition in section 2—namely, actions taken by Morgan Stanley & Co. International Limited or its related corporations to buy (or offer/agree to buy) the Notes for stabilisation purposes.
Additionally, the exemption is limited to stabilising action taken within the 30-day post-issue period and involving persons in one of the three categories in section 3: institutional investors, relevant persons (as defined by reference to section 275(2) of the SFA), or principal acquirers meeting the $200,000 minimum consideration per transaction threshold. This means that even if the stabiliser is within the defined Morgan Stanley group, the exemption’s availability depends on the participant category and transaction economics.
Why Is This Legislation Important?
From a market integrity perspective, stabilisation is a sensitive area. Without exemptions, stabilisation activity could be interpreted as conduct that undermines fair price formation. This Regulations instrument is therefore important because it provides legal certainty for a specific issuance and stabilisation programme, reducing the risk of enforcement exposure for trades that are genuinely intended to stabilise the market price within defined limits.
For practitioners, the value lies in its precision. The Regulations do not attempt to redefine stabilisation generally; instead, they create a narrow exemption for a particular bond issue and a particular stabiliser group. This is typical of transaction-specific exemptions in Singapore’s regulatory approach: regulators can permit necessary market practices while still maintaining the integrity of the broader market conduct regime.
In day-to-day advisory work, this instrument would typically be used when reviewing:
- the legal basis for stabilisation trades during the post-issue period;
- whether the relevant entity qualifies as an institutional investor or relevant person (or whether the transaction is a principal acquisition meeting the minimum consideration threshold);
- documentation and trade records demonstrating that the trades were undertaken for stabilisation purposes; and
- timing controls to ensure stabilisation does not continue beyond the 30-day window.
Because the exemption is time-bound and instrument-specific, compliance teams should implement monitoring and record-keeping that can demonstrate eligibility if questioned by the regulator.
Related Legislation
- Securities and Futures Act (Cap. 289) — including sections 197, 198, 239(1), 275(2), and the authorising power in section 337(1)
- Futures Act (as referenced in the platform metadata)
- Stabilising Act (as referenced in the platform metadata)
- Legislation Timeline (for version control and amendment history)
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. 57) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.