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
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 14 December 2005
- Status: Current version (as at 27 March 2026)
- Key Provisions: Sections 1–3; Schedule (Relevant Subsidiaries)
- Regulatory Focus: Exemption from market conduct prohibitions for stabilising actions relating to specified notes
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 exemption instrument made under the Securities and Futures Act (“SFA”). In plain terms, it allows certain market participants to take “stabilising action” in relation to a particular set of debt securities (the “Notes”) without being caught by specific statutory market conduct rules that would otherwise restrict dealing and related conduct.
Stabilisation is a familiar concept in securities markets. When new notes are issued, the issuer or its financial intermediaries may take steps to support the trading price in the immediate aftermath of issuance. Such activity can reduce volatility and help ensure orderly trading. However, stabilisation can also raise concerns about market manipulation. Singapore’s market conduct framework therefore generally prohibits conduct that could distort the market, unless a lawful exemption applies.
This Regulations’ scope is narrow and fact-specific: it defines the Notes by reference to issuer, maturity, coupon, currency/amount, and the guarantee structure. It also defines stabilising action by reference to a particular stabilising entity (ABN AMRO Bank N.V. and its related corporations) and limits the exemption to stabilising actions taken within a defined time window after issuance. The result is a controlled “safe harbour” for stabilisation in respect of these specified Notes.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the short title and confirms that the Regulations came into operation on 14 December 2005. This matters for practitioners because the exemption only applies to stabilising actions that occur within the relevant statutory time window after the Notes’ issue date, and the Regulations’ commencement date establishes the legal basis for that exemption.
Section 2 (Definitions) is central to determining whether conduct falls within the exemption. The Regulations define:
- “Notes”: the “5-year 9.25 per cent notes due December 2010” issued by Ocean Grand Holdings Limited for up to US$125 million, which are unconditionally and irrevocably guaranteed by the “relevant subsidiaries” listed in the Schedule.
- “relevant subsidiaries”: the entities set out in the Schedule (the extract provided does not list them, but the Schedule is a required reference point for eligibility).
- “stabilising action”: an action taken in Singapore or elsewhere by ABN AMRO Bank N.V. (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.
- “securities”: carries the meaning in section 239(1) of the SFA.
For legal analysis, the definitions operate like a gatekeeping mechanism. If the instrument is not the specified Notes, or if the stabilising action is not taken by ABN AMRO Bank N.V. or its related corporations, the exemption will not apply. Likewise, if the Notes are not guaranteed by the relevant subsidiaries as defined, the exemption is not triggered.
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 the Notes within 30 days from the date of issue, provided the stabilising action is taken with one of the following counterparties:
- (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 foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets.
Practically, Section 3 does two things: (1) it limits the exemption to a 30-day post-issuance period, and (2) it restricts the exemption to stabilising actions conducted in specified transactional contexts (institutional investors, relevant persons, or principal acquirers meeting a minimum consideration threshold). This design reflects a policy balance: allow stabilisation but constrain it to professional/large-scale market participants and a short timeframe.
Although the extract does not reproduce sections 197 and 198 of the SFA, the exemption’s structure indicates that those sections impose prohibitions or restrictions relevant to market conduct (often including dealing-related prohibitions that could be characterised as manipulative or otherwise unlawful). The Regulations effectively carve out stabilisation for the defined Notes and defined actors, thereby preventing the stabilisation from being treated as an offence or breach under those provisions.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, practitioner-friendly format:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of the exemption (notably the definition of “Notes” and “stabilising action”).
- Section 3 contains the exemption from specified SFA provisions, including the 30-day limit and the categories of counterparties/transaction conditions.
- The Schedule lists the relevant subsidiaries that guarantee the Notes. This is essential for confirming whether the Notes fall within the defined instrument category.
There are no additional parts or complex sub-schemes in the extract. The Schedule’s role is nevertheless critical: because the Notes are defined by reference to the guarantee structure, the Schedule effectively determines whether the exemption applies to the Notes actually issued.
Who Does This Legislation Apply To?
The Regulations apply to stabilising actions taken in relation to the defined Notes, but only where the stabilising action is taken by ABN AMRO Bank N.V. or its related corporations. Therefore, the primary regulated actors are the entities conducting stabilisation trades or arrangements (including offers or agreements to buy) for the purpose of stabilising the market price.
In addition, the exemption is conditional on the counterparty category for the stabilising action: institutional investors, relevant persons (as defined in the SFA), or principal acquirers meeting the $200,000 minimum consideration threshold per transaction. Accordingly, the exemption’s practical reach extends beyond the stabiliser to the market counterparties involved in the stabilisation transactions.
Why Is This Legislation Important?
This Regulations is important because it provides a narrowly tailored legal basis for stabilisation activity in Singapore’s market conduct regime. Without such an exemption, stabilising purchases or arrangements to buy could potentially be characterised as conduct prohibited under the SFA’s market conduct provisions. The Regulations therefore reduces legal uncertainty for underwriting and stabilisation teams involved in structured debt issuance.
From a compliance perspective, the Regulations’ value lies in its specificity. It defines the Notes precisely (issuer, instrument characteristics, amount cap, and guarantee structure) and defines the stabilising actor (ABN AMRO Bank N.V. and related corporations). It also imposes a clear time limit (within 30 days from issue) and transaction constraints (institutional investors, relevant persons, or principal acquirers meeting a minimum consideration threshold). These are the kinds of parameters that practitioners can operationalise in trading controls, documentation, and audit trails.
For practitioners advising issuers, arrangers, or financial institutions, the Regulations also highlights the need for careful mapping between (i) the actual terms and guarantee structure of the issued notes, (ii) the identity and corporate status of the stabilising entity, and (iii) the identity and status of counterparties in stabilisation trades. Any mismatch could mean the exemption does not apply, exposing the stabilisation activity to potential regulatory enforcement under the underlying SFA provisions.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, sections 197, 198, 239(1), 275(2), and the regulation-making power in section 337(1)
- Futures Act — referenced in the legislation metadata context (relevant for broader market conduct framework, though not the direct authorising act for these Regulations)
- Stabilising Act — referenced in the legislation metadata context (likely a shorthand for stabilisation-related regulatory concepts within the broader legal framework)
- Timeline — for version control and confirming the applicable text as at the relevant date
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.