Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 59) Regulations 2005
- Act Code: SFA2001-S802-2005
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Citation: SL 802/2005
- Commencement: 14 December 2005
- Status: Current version as at 27 March 2026 (per the provided extract)
- Key Provisions: Sections 1–3; definitions in section 2; exemption in section 3; Schedule (relevant subsidiaries)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 59) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument. It creates a specific exemption from certain market conduct rules in the Securities and Futures Act (“SFA”) for stabilising activity conducted in relation to a particular set of debt securities—namely, specified notes issued by Ocean Grand Holdings Limited.
In plain language, the Regulations recognise that, during the early period after a bond or note is issued, market participants may undertake “stabilising action” to help maintain orderly trading and avoid excessive price volatility. However, stabilising activity can resemble prohibited conduct if it is not carefully bounded. This legislation therefore carves out a narrow exemption, allowing stabilisation to occur without triggering the relevant prohibitions—provided strict conditions are met.
The scope is deliberately narrow: it applies only to stabilising action taken in respect of the defined “Notes”, only by the defined stabiliser (ABN AMRO Bank N.V. and its related corporations), and only within a limited time window after issuance. It also limits who may be involved in the exempted transactions (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 formal citation and states that the Regulations come into operation on 14 December 2005. For practitioners, this matters because the exemption is time-bound and tied to the issuance date of the Notes; knowing the commencement date helps confirm that the exemption is available for the relevant issuance period.
2. Definitions (Regulation 2)
The Regulations define key terms that determine their practical reach:
- “Notes”: The Notes are specifically identified as the 5-year 9.25% notes due December 2010 issued by Ocean Grand Holdings Limited for a principal amount of up to US$125 million. They are also described as being unconditionally and irrevocably guaranteed by the “relevant subsidiaries” of Ocean Grand Holdings Limited.
- “relevant subsidiaries”: This term points to the Schedule, which lists the entities whose guarantees are relevant. The Schedule is crucial because the definition of “Notes” depends on the guarantee structure.
- “securities”: This adopts the meaning in section 239(1) of the SFA, ensuring consistency with the Act’s broader regulatory framework.
- “stabilising action”: Stabilising action is defined as an action taken in Singapore or elsewhere by ABN AMRO Bank N.V. (or any of its related corporations) to buy or offer or agree to buy the Notes in order to stabilise or maintain the market price of the Notes in Singapore or elsewhere.
For legal analysis, the definition is significant in two ways. First, it restricts the stabiliser to ABN AMRO and its related corporations. Second, it clarifies that stabilising conduct may occur outside Singapore, but the exemption is still relevant because the Notes’ market price may be stabilised “in Singapore or elsewhere”.
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 the Notes, within 30 days from the date of issue, provided the stabilising action involves one of the specified categories of counterparties.
While the extract does not reproduce sections 197 and 198 themselves, the structure indicates that those sections contain prohibitions relevant to market conduct—typically rules that prevent manipulative or deceptive trading practices, or otherwise restrict certain dealings that could distort market prices. The exemption therefore functions as a regulatory “safe harbour” for stabilising activity, but only within tightly defined boundaries.
Counterparty conditions
Regulation 3 permits the exemption where the stabilising action is 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 foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
Time condition
The exemption is limited to stabilising action taken within 30 days from the date of issue. This is a critical compliance point. Even if the stabilising activity is otherwise consistent with the definition, conduct outside the 30-day window would not benefit from the exemption and could expose the firm to enforcement risk under the underlying SFA provisions.
Practical compliance implications
For practitioners advising issuers, arrangers, or dealers, the exemption raises several practical questions that should be addressed contractually and operationally:
- Documenting the stabilising purpose: the conduct must be to “stabilise or maintain” the market price, not for other commercial reasons.
- Ensuring the stabiliser is within the defined group: only ABN AMRO Bank N.V. or its related corporations qualify under the definition of stabilising action.
- Counterparty eligibility: trades must be with institutional investors, relevant persons, or qualifying principal acquirers meeting the $200,000 minimum consideration threshold per transaction.
- Transaction-by-transaction consideration tracking: where principal acquirers are involved, the minimum consideration requirement must be evidenced and monitored, including when consideration is paid by exchange of securities or other assets.
- Time tracking from the “date of issue”: firms should define and record the issuance date and implement controls to ensure stabilising activity ceases at the end of the 30-day period.
How Is This Legislation Structured?
The Regulations are concise and structured around three main components:
- Regulation 1 (Citation and commencement): sets the name and effective date.
- Regulation 2 (Definitions): provides the legal meaning of “Notes”, “relevant subsidiaries”, “securities”, and “stabilising action”. The definition of “Notes” is particularly important because it ties the exemption to a specific issuance and guarantee structure.
- Regulation 3 (Exemption): the operative safe harbour, specifying the SFA sections excluded, the 30-day time limit, and the permitted counterparty categories.
- The Schedule: lists the “relevant subsidiaries” that guarantee the Notes. Even though the extract does not show the Schedule contents, it is integral to the definition of the Notes and therefore to whether a given instrument is within the exemption.
From a drafting perspective, the Regulations follow a typical Singapore approach for targeted exemptions: define the instrument and stabiliser precisely, then exempt specified conduct for a limited period and with specified counterparties.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to the defined Notes. In practice, it applies to the entities that may undertake stabilising activity—specifically ABN AMRO Bank N.V. and its related corporations—when they take the defined stabilising steps (buying, offering, or agreeing to buy the Notes) within the permitted timeframe.
However, the exemption also depends on the counterparty. The Regulations require that the stabilising action be taken with an institutional investor, a relevant person (as defined in section 275(2) of the SFA), or a principal acquirer meeting the $200,000 minimum consideration per transaction threshold. Therefore, even if the stabiliser is eligible, trades must be structured to fall within one of those counterparty categories.
Why Is This Legislation Important?
This legislation matters because it provides a controlled legal pathway for market stabilisation in Singapore’s capital markets. Without such an exemption, stabilising trades could potentially be characterised as prohibited market conduct under the SFA. The Regulations therefore support market functioning—particularly in the immediate post-issuance period—while maintaining regulatory safeguards.
For practitioners, the key value is the certainty the exemption offers when its conditions are met. The Regulations specify: (i) the exact Notes, (ii) the stabiliser, (iii) the time window (30 days from issue), and (iv) the eligible counterparties and consideration threshold. This makes the exemption administrable through compliance controls, trade monitoring, and documentation.
From an enforcement and risk perspective, the narrowness of the exemption is equally important. Any deviation—such as stabilising outside the 30-day window, trading with ineligible counterparties, failing to meet the principal consideration threshold, or involving a stabiliser not within the defined group—could mean the exemption does not apply. In that scenario, the firm would need to rely on other legal bases or face potential exposure under the underlying SFA provisions referenced in Regulation 3.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 239(1), 275(2), and the authorising power in section 337(1).
- Futures Act (as referenced in the provided metadata context)
- Stabilising Act (as referenced in the provided metadata context)
- 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. 59) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.