Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 58) Regulations 2005
- Act Code: SFA2001-S801-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Legislative Citation: SL 801/2005
- Commencement: 14 December 2005
- Status: Current version as at 27 March 2026 (per the legislation record)
- Key Provisions: Section 2 (definitions); Section 3 (exemption from sections 197 and 198 of the SFA)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 58) Regulations 2005 is a targeted regulatory instrument. In essence, it creates a narrow exemption from certain market conduct prohibitions in the Securities and Futures Act (SFA) for “stabilising action” taken in relation to specified debt securities (“Notes”).
In plain language, the Regulations recognise that, in some capital markets transactions, market makers or underwriters may take limited steps to stabilise the trading price of newly issued securities during the immediate post-issuance period. Such activity can reduce volatility and support orderly trading. However, stabilising conduct can also resemble prohibited market manipulation if it is not carefully bounded. This Regulations therefore permits stabilising action—within defined limits—without triggering the SFA’s general prohibitions.
The scope is deliberately constrained. The exemption applies only to stabilising action taken in respect of particular Notes issued by Galaxy Entertainment Finance Company Limited and guaranteed by Galaxy Casino, S.A. and certain subsidiaries. It also applies only during a specific time window (30 days from the date of issue) and only where the stabilising counterparties fall within specified categories (institutional investors, certain “relevant persons”, or principal acquirers meeting a minimum consideration threshold).
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 14 December 2005. This is important for practitioners assessing whether stabilising conduct occurred within the legal framework and whether the exemption was available at the time of the relevant transactions.
2. Definitions (Regulation 2)
Regulation 2 is central because it defines the objects and actors to which the exemption applies.
(a) “Notes”
The exemption is tied to two specific tranches of debt securities:
- the 7-year fixed rate guaranteed senior notes due December 2012, for a principal amount of up to US$500 million; and
- the 5-year floating rate guaranteed senior notes due December 2010, for a principal amount of up to US$500 million.
These Notes are issued by Galaxy Entertainment Finance Company Limited and are unconditionally and irrevocably guaranteed by Galaxy Casino, S.A. and certain subsidiaries of Galaxy Casino, S.A. This specificity means that stabilising action in respect of other securities—even if issued by the same group—would not automatically qualify.
(b) “securities”
The term “securities” is defined by reference to section 239(1) of the SFA. This cross-reference ensures that the exemption operates within the SFA’s broader definitional framework.
(c) “stabilising action”
The Regulations define “stabilising action” as an action taken in Singapore or elsewhere by:
- Merrill Lynch (Singapore) Pte. Ltd.; and
- Morgan Stanley & Co. International Limited;
or any of their 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.
This definition is practitioner-relevant in two ways. First, it identifies the permitted stabilisers (and their related corporations). Second, it clarifies that the exempt conduct includes not only actual purchases but also offers or agreements to buy—meaning compliance teams must consider pre-trade communications and contractual arrangements, not just executed trades.
3. The exemption (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 the Notes, provided the conditions are met.
(a) Time limit: within 30 days from the date of issue
The exemption applies only to stabilising action taken within 30 days from the date of issue of the Notes. This is a strict temporal limitation. For legal and compliance purposes, the “date of issue” should be identified from the offering documentation and issuance mechanics (e.g., issue date specified in the relevant terms and conditions). Any stabilising activity outside the 30-day window would fall back into the general SFA prohibitions.
(b) Permitted counterparties
Regulation 3 further limits the exemption to stabilising action involving one of the following categories:
- an institutional investor;
- a relevant person as defined in section 275(2) of the SFA; or
- a person who acquires the Notes as principal, provided 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 stabilising activity is conducted with sophisticated or appropriately sized participants, reducing the risk that small or retail participants are indirectly affected by conduct that could otherwise be characterised as market manipulation.
(c) Minimum consideration threshold
The principal-acquirer limb includes a quantitative safeguard: $200,000 per transaction (or equivalent). Importantly, the Regulations allow the consideration to be paid either in cash or by exchange of securities or other assets. Practitioners should therefore ensure that internal valuation and documentation processes can substantiate that the consideration meets the threshold on a per-transaction basis.
Practical compliance note: Because Regulation 3 exempts stabilising action from specific SFA provisions, it is essential to understand what sections 197 and 198 prohibit. While this extract does not reproduce those sections, the exemption’s function is clear: it carves out stabilising conduct that would otherwise be unlawful under the market conduct regime. Compliance teams should map the exemption conditions to the transaction lifecycle (authorisation, execution, record-keeping, and post-trade monitoring) to demonstrate that the stabilising activity fits squarely within the exemption.
How Is This Legislation Structured?
The Regulations are short and structured around three provisions:
- Regulation 1 (Citation and commencement): sets the legal identity of the instrument and its effective date (14 December 2005).
- Regulation 2 (Definitions): defines the key terms that determine the scope of the exemption—especially “Notes” and “stabilising action”.
- Regulation 3 (Exemption): provides the substantive relief by disapplying sections 197 and 198 of the SFA to stabilising action meeting the specified conditions (time window and counterparty categories).
For practitioners, this compact structure means the legal analysis is largely driven by the definitions and the conditions in Regulation 3. There are no additional “Parts” or complex procedural requirements in the extract provided; the compliance task is therefore to ensure factual alignment with the defined Notes, the permitted stabilisers, the 30-day period, and the counterparty/consideration thresholds.
Who Does This Legislation Apply To?
The exemption is not a general permission for any market participant. It is directed at stabilising action taken by Merrill Lynch (Singapore) Pte. Ltd. and Morgan Stanley & Co. International Limited (and their related corporations) in relation to the specified Galaxy Notes. Accordingly, the primary regulated actors are the stabilising entities and their compliance functions.
However, the exemption also depends on the identity and status of the counterparty to the stabilising transactions. The stabilising action must involve either an institutional investor, a relevant person (as defined in section 275(2) of the SFA), or a principal acquirer meeting the $200,000 per transaction minimum consideration threshold. Therefore, the practical reach extends to how stabilising trades are structured and who is on the other side of those trades.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing manipulation and improper market practices, and (2) allowing legitimate stabilisation activities that can support orderly markets during issuance.
From an enforcement and risk perspective, the exemption is significant because it removes legal uncertainty for stabilisers acting within defined parameters. Without such an exemption, stabilising purchases or offers to buy could be argued to fall within prohibitions under the SFA. By disapplying sections 197 and 198 for qualifying stabilising action, the Regulations provide a clear compliance pathway—provided the conditions are met.
For practitioners advising issuers, arrangers, underwriters, and trading desks, the key practical impact is that compliance must be evidence-based and condition-driven. The exemption is narrow: it is tied to specific Notes, specific stabilising entities, a strict 30-day period, and specific counterparty categories and consideration thresholds. Legal teams should therefore ensure that offering documents, stabilisation notices (where applicable), internal trading policies, and trade capture systems can demonstrate compliance with each element of Regulation 3.
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 (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (legislation timeline record for version verification)
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. 58) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.