Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 60) Regulations 2005
- Act Code: SFA2001-S851-2005
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 27 December 2005
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
- Legislative Basis: Made in exercise of powers conferred by section 337(1) of the Securities and Futures Act
- Instrument Identifier (as published): SL 851/2005
- Notes Covered: 7-year 6.75% convertible subordinated notes due December 2012 issued by Perseverance Corporation Limited (up to AUD 37 million)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 60) Regulations 2005 (“Stabilising Action Exemption Regulations”) creates a targeted exemption from certain market conduct rules in the Securities and Futures Act (the “SFA”) for stabilising activities relating to a specific issuance of convertible subordinated notes.
In plain terms, the Regulations recognise that, in some debt and capital market transactions, market participants may take limited steps to stabilise the trading price of newly issued securities. Such stabilisation can help reduce volatility immediately after issuance. However, stabilising conduct can also resemble prohibited market manipulation if not carefully bounded. The Regulations therefore carve out a narrow legal pathway: stabilising action is permitted for specified persons and within a defined time window, without triggering the SFA provisions that would otherwise apply.
Importantly, this is not a general stabilisation regime for all securities. It is an instrument-specific exemption tied to a particular set of “Notes” issued by Perseverance Corporation Limited, and it applies only for a limited period after the Notes are issued. This makes the Regulations highly relevant for practitioners advising issuers, arrangers, and counterparties involved in the distribution and early trading of these Notes.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and states that they come into operation on 27 December 2005. For legal practice, this matters because the exemption is time-bound and must be assessed against the issuance date and the relevant trading period.
Section 2 (Definitions) is the core interpretive section. It defines the scope of the exemption by defining “Notes” and “stabilising action,” and it also cross-references the SFA for the meaning of “securities.”
Under Section 2, “Notes” means the 7-year 6.75% convertible subordinated notes due December 2012 issued by Perseverance Corporation Limited for a principal amount of up to AUD 37 million. This is a critical limitation: stabilising action must relate to these specific Notes, not to other tranches, other issuances, or other instruments with similar features.
Section 2 also defines “stabilising action” as an action taken in Singapore or elsewhere by Barclays Bank PLC (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. This definition is practitioner-relevant in two ways. First, it identifies the permitted stabilising actor: Barclays Bank PLC and its related corporations. Second, it clarifies the conduct: buying (or offering/agreement to buy) the Notes for stabilisation purposes.
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 any of the Notes, within 30 days from the date of issue of the Notes, with respect to stabilising action taken by or involving certain categories of persons.
While the extract does not reproduce Sections 197 and 198, the legal effect is clear: those SFA provisions would otherwise restrict or prohibit certain market conduct (commonly associated with market manipulation or improper trading practices). The Regulations remove that risk for stabilising action that meets the conditions.
Section 3 then sets out three categories of persons/transactions for which the exemption applies:
- (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 that 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.
For practitioners, the practical compliance question is whether the stabilising trades fall within one of these categories. The exemption is not simply “any stabilising action by Barclays.” It is stabilising action “with” the relevant counterparty category, and within the 30-day post-issuance period.
The $200,000 threshold in Section 3(c) is particularly important. It is transaction-based (“for each transaction”) and it is satisfied either by cash or by exchange of securities or other assets. This suggests that stabilisation-related acquisitions by principal investors are only exempt where the investor’s consideration is sufficiently large, consistent with a policy of limiting the exemption to sophisticated or substantial market participants.
Finally, the time limit—within 30 days from the date of issue—is a hard boundary. Stabilising action outside that window would fall outside the exemption and could expose the relevant parties to the operation of Sections 197 and 198 of the SFA.
How Is This Legislation Structured?
The Regulations are structured as a short, instrument-specific subsidiary legislative text with three substantive components:
(1) Section 1 sets out the citation and commencement date.
(2) Section 2 provides definitions that determine the scope of the exemption, including the precise identification of the “Notes” and the definition of “stabilising action.” It also cross-references the SFA definition of “securities” and the SFA definition of “relevant person.”
(3) Section 3 contains the exemption itself, specifying which SFA provisions are disapplied, the time window, and the categories of persons/transactions that qualify.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in respect of the specified Notes, but the exemption is operationally relevant to multiple stakeholders: the stabilising actor (Barclays Bank PLC and its related corporations), the counterparties to stabilising trades, and any persons involved in acquiring the Notes as principal.
In terms of counterparty categories, Section 3 limits the exemption to stabilising action involving (i) institutional investors, (ii) “relevant persons” under the SFA, or (iii) principal acquirers who meet the minimum consideration threshold of $200,000 (or equivalent) per transaction. Accordingly, advisers should assess not only the identity of the stabilising party but also the nature and size of the counterparty transaction.
Because the exemption is tied to a specific issuance and a specific stabilising actor, it is unlikely to be invoked for unrelated issuances or for stabilising conduct by other market participants. Practitioners should therefore treat it as a narrow, transaction-specific regulatory permission rather than a general market conduct safe harbour.
Why Is This Legislation Important?
This Regulations matters because it reconciles two competing regulatory objectives: (1) preventing market manipulation and improper trading conduct, and (2) allowing legitimate stabilisation practices that can support orderly price formation in the immediate post-issuance period.
For lawyers advising on capital markets transactions, the exemption provides a structured way to permit stabilising trades without automatically breaching the SFA’s market conduct provisions. The value of the exemption is not merely theoretical; it affects how stabilisation programmes are designed, documented, and monitored—particularly around the 30-day post-issuance deadline and the counterparty categories.
From an enforcement and risk-management perspective, the Regulations also highlight the importance of precision. The exemption is limited to: (i) the specific Notes, (ii) stabilising action by Barclays Bank PLC (or related corporations), (iii) the defined trading purpose (stabilising or maintaining market price), (iv) the geographic scope (action taken in Singapore or elsewhere), (v) the time window (within 30 days from issue), and (vi) the counterparty/transaction conditions (institutional investor, relevant person, or principal acquirer meeting the $200,000 threshold).
In practice, counsel should ensure that stabilising activity is supported by contemporaneous records demonstrating compliance with these conditions. This includes verifying the issuance date, tracking the timing of stabilising trades, confirming the status of counterparties (institutional investor or relevant person), and documenting consideration amounts where the principal-acquirer route is used.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, Sections 197 and 198 (disapplied by the exemption) and Section 337(1) (the enabling provision), as well as Section 275(2) (definition of “relevant person”).
- Futures Act — referenced in the legislation metadata as part of the broader regulatory framework.
- Stabilising Act — referenced in the legislation metadata, indicating a policy context for stabilisation-related market conduct.
- Timeline / Legislation timeline — for confirming the correct version as at the relevant date (the instrument is shown as current as at 27 March 2026, with the original publication date 27 December 2005).
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. 60) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.