Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 7) Regulations 2004
- Act Code: SFA2001-S124-2004
- 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 124/2004
- Commencement: 23 March 2004
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key provisions: Section 1 (Citation and commencement); Section 2 (Definitions); Section 3 (Exemption)
- Regulatory authority: Monetary Authority of Singapore (MAS)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 7) Regulations 2004 is a targeted regulatory instrument. In essence, it creates a narrow exemption from certain “market conduct” rules in the Securities and Futures Act (the “SFA”) for stabilising activities carried out in relation to a specific bond issuance: fixed rate notes due April 2011 issued by SK Telecom Co., Ltd.
Stabilising action is a familiar feature of capital markets underwriting and issuance. During the early period after a new debt security is issued, market makers or underwriters may take steps to support or maintain the security’s market price. However, stabilisation can intersect with statutory prohibitions designed to prevent market manipulation. This Regulations addresses that tension by carving out a permitted pathway—subject to defined conditions.
Practically, the Regulations does not “legalise” stabilisation broadly. It limits the exemption to stabilising actions taken by a specified stabilising party (Credit Suisse First Boston (Europe) Limited and its related corporations) and to dealings with specified categories of counterparties (persons referred to in section 274 of the SFA, or sophisticated investors as defined in section 275(2) of the SFA). It also imposes a hard time limit: the exemption does not apply to stabilising actions carried out after 30 calendar days from the date of issuance.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal commencement date and citation. These are procedural but important for compliance timelines. The Regulations came into operation on 23 March 2004, aligning with the issuance and market conduct framework applicable at that time.
Section 2 (Definitions) is central because it defines the scope of the exemption. Two defined terms drive the entire instrument:
- “Notes” means the fixed rate notes due April 2011 issued by SK Telecom Co., Ltd. for a principal amount of up to US$500 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Credit Suisse First Boston (Europe) Limited (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.
From a practitioner’s perspective, the definitions are not merely descriptive—they are the gatekeepers. If the instrument is not the specified SK Telecom notes, or if the stabilising activity is not undertaken by the specified stabiliser (or its related corporations), the exemption will not apply. Similarly, the definition is tied to stabilisation of market price, not general trading or liquidity provision.
Section 3 (Exemption) is the operative provision. It provides that, subject to paragraph (2), sections 197 and 198 of the SFA shall not apply to stabilising action carried out in respect of any of the Notes with certain counterparties.
While the extract does not reproduce the text of sections 197 and 198, the structure indicates that those sections contain prohibitions or restrictions relevant to market conduct—likely including rules that would otherwise constrain dealings that could be characterised as manipulative or misleading. The exemption therefore functions as a “permission” to engage in stabilising dealings without breaching those specific SFA prohibitions.
Section 3(1): permitted counterparties—the exemption applies only where stabilising action is carried out with either:
- a person referred to in section 274 of the Act; or
- a sophisticated investor as defined in section 275(2) of the Act.
This is a significant limitation. It means that stabilising action is not an open-ended activity with any market participant. Instead, it is restricted to dealings with counterparties that fall within the SFA’s defined categories. For counsel advising on execution, this requires careful counterpart identification and documentation—particularly where stabilising trades may be routed through intermediaries or executed in different jurisdictions.
Section 3(2): time limit—the exemption does not apply to stabilising action carried out at any time after the expiry of the period of 30 calendar days from the date of issuance of the Notes.
This time-bound feature is often the most operationally sensitive condition. It requires firms to (i) identify the “date of issuance” for the Notes, (ii) calculate the 30-day window precisely using calendar days, and (iii) ensure that any stabilising orders, offers, or agreements to buy are not executed (or become effective) after the cut-off. Because the definition of stabilising action includes not only buying but also offering or agreeing to buy, firms should also consider whether pre-arranged commitments could be construed as “stabilising action” if they remain outstanding beyond the period.
How Is This Legislation Structured?
This Regulations is short and structured in a conventional SL format:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that define the Notes and stabilising action, thereby delimiting the exemption’s subject matter and permitted conduct.
- Section 3 contains the exemption, specifying (i) which SFA provisions are disapplied (sections 197 and 198), (ii) the qualifying counterparties, and (iii) the 30-calendar-day limit.
There are no additional parts or schedules in the extract. The instrument’s brevity reflects its function as a bespoke exemption for a particular issuance and stabilisation programme.
Who Does This Legislation Apply To?
The Regulations applies to stabilising actions in respect of the specified SK Telecom notes, but only when those actions are carried out by the defined stabiliser: Credit Suisse First Boston (Europe) Limited or its related corporations. In other words, the exemption is not a general market facility for any dealer; it is tied to a particular stabilising arrangement.
It also applies depending on the counterparty to the stabilising dealings. The exemption is available only for stabilising action carried out with persons falling within section 274 of the SFA or with sophisticated investors under section 275(2). Therefore, even where the stabiliser is correct and the Notes are correct, the exemption may fail if the stabilising trades are executed with counterparties outside those categories.
Why Is This Legislation Important?
For practitioners, the Regulations is important because it demonstrates how Singapore’s market conduct framework accommodates legitimate market practices while maintaining safeguards against manipulation. Stabilisation can be a lawful and commercially necessary activity in primary issuance contexts, but it must be carefully bounded. This instrument provides a controlled exemption from specified SFA prohibitions, thereby enabling stabilisation programmes to proceed without triggering the prohibitions in sections 197 and 198—provided the conditions are met.
From an enforcement and compliance standpoint, the Regulations highlights three compliance “pressure points”: (1) scope of the security (only the defined Notes), (2) scope of the stabiliser (only the named stabilising entity and related corporations), and (3) scope of counterparties and timing (only section 274 persons or sophisticated investors, and only within the 30-calendar-day post-issuance window).
In practice, counsel advising issuers, underwriters, and stabilising agents should treat this exemption as a checklist-driven permission. Transaction documentation should identify the Notes, confirm the stabiliser’s identity and corporate relationships, confirm the counterparty classification under the SFA, and maintain an audit trail of trade dates to demonstrate that stabilising action did not occur after the 30-day expiry. Where stabilising activity occurs across jurisdictions (“in Singapore or elsewhere” is expressly contemplated), firms should also ensure that the operational execution aligns with the Singapore exemption conditions.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the legislation metadata; relevance depends on cross-references within the broader market conduct framework).
- Stabilising Act (as referenced in the legislation metadata; relevance depends on the specific stabilisation regime and how it is implemented in Singapore).
- Timeline (legislation portal timeline used to confirm the correct version as at 27 March 2026).
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. 7) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.