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 (SFA) 2001
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 27 December 2005
- Legislative Status: Current version as at 27 March 2026 (per the provided extract)
- Legislation Number: SL 851/2005
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulatory Authority: Monetary Authority of Singapore (MAS)
- Relevant SFA Provisions Affected: Sections 197 and 198 of the Securities and Futures Act
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 is a targeted regulatory instrument. In plain terms, it creates a limited exemption from certain market conduct rules in the Securities and Futures Act (SFA) for “stabilising action” carried out in relation to a specific set of debt securities (“Notes”).
Stabilising action is a practice used around the issuance and early trading of securities. Market participants may take steps—such as buying (or offering to buy) securities—to support or maintain the market price during the initial period after issuance. While stabilisation can be legitimate, regulators are concerned that it may be used to mislead investors or distort price discovery. Accordingly, the SFA contains provisions restricting market conduct that could amount to market manipulation or improper price support.
This Regulations’ core function is to carve out a narrow exception: it allows stabilising action to occur without the prohibition in sections 197 and 198 of the SFA, but only if strict conditions are met. The exemption is time-bound (limited to 30 days from the date of issue) and person- and transaction-structured (limited to certain categories of counterparties and minimum consideration thresholds).
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the short title and confirms that the Regulations come into operation on 27 December 2005. For practitioners, this matters because the exemption only applies to stabilising action taken within the relevant statutory period and after the Regulations are in force.
Section 2 (Definitions) is crucial because the exemption is drafted around defined terms. The Regulations define:
- “Notes”: the 7-year 6.75 per cent convertible subordinated notes due December 2012 issued by Perseverance Corporation Limited, for a principal amount of up to AUD 37 million.
- “securities”: adopts the meaning in section 239(1) of the Act, ensuring consistency with the SFA’s general framework.
- “stabilising action”: an action taken in Singapore or elsewhere by Barclays Bank PLC (or its related corporations) to buy, or 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.
From a legal compliance perspective, these definitions mean the exemption is not generic. It is tied to a particular issuer, a particular instrument, and a particular stabilising actor (Barclays Bank PLC and related corporations). If stabilising activity is carried out by a different entity, or in relation to different notes, the exemption would not apply.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Act shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, provided the stabilising action is taken with one of the following categories of counterparties:
- (a) an institutional investor;
- (b) a “relevant person” as defined in section 275(2) of the Act; or
- (c) a person who acquires the Notes as principal, where 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.
Practically, section 3 creates a structured permission: stabilising action is allowed only during a limited window and only when counterparties fall into regulated categories or meet a minimum investment size threshold. This reduces the risk that stabilisation could be used to influence retail investors or to create artificial demand through small, fragmented transactions.
Two additional compliance points flow from the drafting:
- Geographic scope: “stabilising action” may be taken “in Singapore or elsewhere,” and the stabilisation objective may relate to maintaining the market price “in Singapore or elsewhere.” This indicates that the exemption is not confined to domestic trading venues.
- Instrument-specificity: the exemption is limited to the defined “Notes.” Even if the stabilising actor is the same, stabilisation in respect of other securities would not be covered.
How Is This Legislation Structured?
The Regulations are short and consist of an enacting formula and three substantive provisions:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that determine the scope of the exemption (notably “Notes” and “stabilising action”).
- Section 3 contains the exemption from specified SFA provisions (sections 197 and 198), subject to time, counterparty, and transaction consideration conditions.
Because the Regulations are narrowly tailored, there are no additional parts dealing with reporting, record-keeping, or enforcement mechanisms in the text provided. Those matters, if any, would typically be governed by the underlying SFA provisions and MAS guidance, rather than by these Regulations alone.
Who Does This Legislation Apply To?
In scope are stabilising actions taken by Barclays Bank PLC or its related corporations in relation to the defined Perseverance Corporation Limited convertible subordinated notes. The exemption is therefore most relevant to the stabilising dealer and its corporate group, as well as to the counterparties with whom stabilising transactions are executed.
However, the exemption’s effect is conditional on the nature of the counterparty and the transaction economics. The stabilising action must be taken within 30 days from the date of issue and with either an institutional investor, a relevant person (per the SFA definition), or a principal acquirer meeting the $200,000 minimum consideration threshold per transaction (or its foreign currency equivalent). This means that even where stabilisation is performed by the permitted actor, it must be structured to meet the counterparty and consideration requirements to benefit from the exemption.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing policy objectives: (1) allowing legitimate market practices that support orderly trading around issuance, and (2) preventing manipulative or misleading conduct. By exempting stabilising action from sections 197 and 198 of the SFA, the Regulations acknowledges that stabilisation can be a standard feature of certain note offerings—provided it is constrained and transparent in its mechanics.
For practitioners advising issuers, dealers, or investors, the key value of the Regulations lies in its precision. It is not a broad “stabilisation regime” applicable to all securities. Instead, it is a bespoke exemption tied to a specific instrument and a specific stabilising actor, with a short post-issuance window and strict counterparty/consideration conditions. This precision reduces uncertainty for the parties involved in that particular issuance, but also creates a compliance trap: stabilisation activities that fall outside the defined scope may still be subject to the SFA prohibitions.
From an enforcement and risk perspective, the exemption’s narrowness means that legal teams should treat it as a checklist exercise. Counsel should confirm: (i) the exact instrument being stabilised; (ii) the identity of the stabilising entity; (iii) the timing (within 30 days from issue); (iv) the counterparty category; and (v) where relevant, the minimum consideration threshold per transaction. Failure on any of these elements could expose the stabilising conduct to regulatory scrutiny under the underlying SFA market conduct provisions.
Related Legislation
- Securities and Futures Act (SFA) 2001 — particularly sections 197, 198, 239(1), 275(2), and the regulation-making power in 337(1).
- Futures Act (as referenced in the provided metadata context)
- Stabilising Act (as referenced in the provided metadata context)
- Timeline (legislation timeline reference for version control)
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.