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) (specifically section 337(1))
- Commencement: 14 December 2005
- Legislative Status: Current version (as at 27 March 2026)
- Primary Purpose (as reflected in the text): Provide a targeted exemption from market conduct prohibitions for “stabilising action” in relation to specified notes
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (“Notes”, “securities”, “stabilising action”)
- Section 3: Exemption from sections 197 and 198 of the SFA for stabilising action within a defined period and subject to defined counterparties/consideration thresholds
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 narrowly tailored set of regulations made under the Securities and Futures Act (SFA). In plain language, it creates a limited “safe harbour” that allows certain market participants to take stabilising actions in relation to specific debt securities (the “Notes”) without breaching particular market conduct rules.
Stabilising action is a practice commonly associated with securities offerings. During the period immediately after issuance, stabilisation may be used to help maintain an orderly market price for the new instruments. However, market conduct regimes typically prohibit manipulative or misleading conduct, and may also restrict certain trading behaviours. This legislation addresses that tension by carving out an exemption—so that stabilisation can occur in a controlled and predictable way, rather than being treated as unlawful market manipulation.
Importantly, the exemption is not general. It is confined to (i) particular Notes issued by a specified issuer and guaranteed by specified guarantors, (ii) stabilising actions taken by specified stabilising entities, and (iii) stabilising transactions carried out within a defined timeframe and with specified categories of counterparties or minimum consideration thresholds.
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations come into operation on 14 December 2005. For practitioners, this matters mainly for determining the temporal scope of the exemption—i.e., whether stabilising activities fall within the regulatory framework.
Section 2 (Definitions) is the core of the legislation’s precision. The Regulations define the scope of the exemption by defining “Notes” and “stabilising action”. The definition of “Notes” is highly specific: it covers two tranches of guaranteed senior notes issued by Galaxy Entertainment Finance Company Limited, unconditionally and irrevocably guaranteed by Galaxy Casino, S.A. and certain subsidiaries. The Notes are:
- 7-year fixed rate guaranteed senior notes due December 2012 for a principal amount of up to US$500 million; and
- 5-year floating rate guaranteed senior notes due December 2010 for a principal amount of up to US$500 million.
This specificity is a major practical point: stabilising action in respect of other notes, other issuers, or notes without the same guarantee structure would not automatically qualify.
Section 2 also defines “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 has several implications:
- Geographical reach: stabilising action may occur “in Singapore or elsewhere”.
- Permitted conduct: it includes buying, offering to buy, or agreeing to buy (not just completed purchases).
- Purpose requirement: the action must be taken to stabilise or maintain market price.
- Entity limitation: only the named stabilisers (and their related corporations) are covered.
Section 3 (Exemption) is the operative provision. 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, provided the stabilising action is carried out with one of the following categories:
- (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, where 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.
For practitioners, the key elements to verify in any stabilisation programme are therefore: (1) the Notes must match the defined instruments; (2) the stabilising entity must be within the definition; (3) the stabilising action must occur within the 30-day window from the date of issue; and (4) the counterparty must fall within one of the specified categories, including the $200,000 minimum consideration threshold where the counterparty is a principal acquirer.
Although the extract does not reproduce sections 197 and 198 of the SFA, the structure indicates that those sections contain market conduct prohibitions that would otherwise apply to trading or dealings. The exemption effectively suspends the application of those prohibitions for qualifying stabilising action, thereby reducing regulatory risk for compliant stabilisation activities.
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three substantive provisions:
- Part/Section 1: Citation and commencement.
- Part/Section 2: Definitions that determine the scope of “Notes” and “stabilising action”.
- Part/Section 3: The exemption clause, specifying which SFA provisions are disapplied, the timeframe (30 days from issue), and the permitted counterparty/consideration conditions.
There are no additional parts or complex schedules in the extract. The legislative technique is to use definitions to tightly confine the exemption, and then to use a single operative section to disapply specified SFA provisions subject to clear conditions.
Who Does This Legislation Apply To?
In practical terms, the Regulations apply to parties involved in stabilising action in relation to the defined Notes. The exemption is designed for the stabilising entities named in the definition of “stabilising action”—namely Merrill Lynch (Singapore) Pte. Ltd. and Morgan Stanley & Co. International Limited (and their related corporations). If other market participants attempt to stabilise the Notes, they would not benefit from this specific exemption unless another exemption applies.
The Regulations also apply indirectly to counterparties to stabilising transactions. The exemption conditions require that stabilising action be taken with an institutional investor, a relevant person (as defined in the SFA), or a principal acquirer meeting the $200,000 minimum consideration per transaction threshold. Therefore, compliance is not only about the stabiliser’s conduct, but also about who the stabiliser trades with and the economic terms of those transactions.
Why Is This Legislation Important?
This Regulations is important because it provides regulatory clarity for stabilisation activities in a specific issuance context. Market conduct rules can be broad and may capture trading patterns that, in an offering context, are intended to support orderly price formation. By disapplying sections 197 and 198 of the SFA for qualifying stabilising action, the Regulations reduce uncertainty and help ensure that stabilisation can occur without triggering enforcement risk—provided the conditions are met.
From a practitioner’s perspective, the value lies in the precision of the exemption. The Regulations do not offer a blanket permission to stabilise any security. Instead, they require careful factual alignment with the defined Notes, the defined stabilising entities, the 30-day timeframe, and the counterparty/consideration conditions. This means that legal review should focus on documentation and transaction records: confirming the identity of the Notes, the date of issue, the identity of the stabilising entity and its related corporations, the counterparties’ classification, and the consideration threshold where relevant.
Finally, the Regulations illustrate a broader regulatory approach in Singapore’s market conduct framework: stabilisation is permitted in controlled circumstances, but the law still aims to prevent manipulative conduct. Even where an exemption applies, firms should still ensure that stabilising activity is consistent with the exemption’s purpose (stabilising or maintaining market price) and does not stray into conduct that could be characterised as misleading or manipulative outside the exemption.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — in particular:
- Section 337(1) (power to make these Regulations)
- Sections 197 and 198 (market conduct provisions disapplied by the exemption)
- Section 275(2) (definition of “relevant person” referenced in Section 3(b))
- Section 239(1) (definition of “securities” referenced in Section 2)
- Futures Act (listed in the metadata as related legislation)
- Stabilising Act (listed in the metadata as related legislation)
- Timeline (legislation versioning reference)
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.