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 (SFA) (specifically section 337(1))
- Regulation Number: SL 124/2004
- Commencement: 23 March 2004
- Status: Current version (as at 27 March 2026)
- Key Provisions: 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 (“Stabilising Action (Notes) Regulations”) creates a targeted regulatory exemption within Singapore’s market conduct framework. In substance, it allows certain market participants to take “stabilising action” in relation to a specific set of debt securities—namely, fixed rate notes issued by SK Telecom Co., Ltd.—without being caught by particular prohibitions in the Securities and Futures Act.
Singapore’s market conduct regime is designed to prevent manipulation and unfair practices that could distort the price or market for securities. However, the law also recognises that stabilisation—when conducted in a controlled and time-limited manner around issuance—can be a legitimate market practice. Stabilisation is commonly used to mitigate volatility immediately after a new issuance and to support orderly trading, provided it is carried out within strict boundaries.
This particular set of Regulations is narrow and issuance-specific. It does not create a general stabilisation regime for all notes. Instead, it grants an exemption for stabilising action in respect of “Notes” defined by reference to a particular issuer, maturity, and issuance size. The exemption is further limited by who may be involved (certain categories of persons) and by a hard time cap (no stabilising action after 30 calendar days from issuance).
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
The Regulations may be cited as the “Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 7) Regulations 2004” and come into operation on 23 March 2004. For practitioners, this matters because the exemption only becomes available from the commencement date, and any stabilising activity outside the permitted window could remain subject to the underlying prohibitions in the Securities and Futures Act.
2. Definitions (Regulation 2)
The Regulations define two central concepts: “Notes” and “stabilising action”.
“Notes” are defined as fixed rate notes due April 2011 issued by SK Telecom Co., Ltd. for a principal amount of up to US$500 million. This definition is critical: stabilising action must relate to these specific notes. If the stabilisation relates to different instruments (even if issued by the same issuer), the exemption would not apply.
“Stabilising action” is defined as 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. This definition is equally important because it identifies both the actor (Credit Suisse First Boston (Europe) Limited and related corporations) and the permitted conduct type (buying or offering/agreeing to buy). It also ties the purpose to stabilisation/price maintenance.
3. The exemption from sections 197 and 198 of the Act (Regulation 3)
The heart of the Regulations is Regulation 3, which provides the exemption.
Regulation 3(1) states that, subject to paragraph (2), sections 197 and 198 of the Securities and Futures Act shall not apply to any stabilising action carried out in respect of any of the Notes with respect to stabilising action carried out involving either:
- (a) a person referred to in section 274 of the Act; or
- (b) a sophisticated investor as defined in section 275(2) of the Act.
For a practitioner, the practical effect is that stabilising action meeting the definition and involving the specified counterparties is carved out from the prohibitions contained in sections 197 and 198. While the extract provided does not reproduce the text of those sections, in market conduct contexts these provisions typically relate to restrictions on certain dealing practices and conduct that could be characterised as market manipulation or improper dealing. The exemption therefore functions as a compliance “safe harbour” for stabilisation, but only when the conditions are satisfied.
4. Time limitation (Regulation 3(2))
Regulation 3(2) imposes a strict temporal boundary: 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 the issuance of the Notes. This is a hard stop. Even if the stabilisation is otherwise within the defined actor and counterparty categories, stabilisation beyond the 30-day window would fall outside the exemption and could expose the stabilising party to the underlying statutory prohibitions.
From a compliance perspective, this time limit requires careful operational controls: accurate identification of the issuance date, monitoring of dealing dates, and documentation that any stabilising trades fall within the permitted period.
How Is This Legislation Structured?
The Regulations are structured in a simple, functional manner with three main provisions:
- Regulation 1 sets out the citation and commencement date.
- Regulation 2 provides definitions that narrow the scope of the exemption to specific notes and specific stabilising conduct by specified entities.
- Regulation 3 creates the exemption from specified sections of the Securities and Futures Act, subject to counterparty categories and a 30-calendar-day limitation.
Notably, the Regulations do not include extensive procedural requirements in the extract. Instead, they rely on definitional precision and conditional limitations (counterparty categories and time window) to manage regulatory risk.
Who Does This Legislation Apply To?
Although the exemption is framed as a carve-out from the Securities and Futures Act, its practical application is limited to the parties and transactions that fall within the Regulations’ definitions. The stabilising action must be carried out by Credit Suisse First Boston (Europe) Limited or its related corporations. Therefore, the exemption is not available to all dealers or issuers; it is tied to the specified stabilising arranger/dealer group.
Further, the exemption applies only when the stabilising action is carried out with counterparties that fall within either section 274 persons or sophisticated investors under section 275(2). This means that even within the permitted actor and instrument scope, the exemption may not apply if the stabilising dealings are conducted with other categories of persons. Practitioners should therefore treat counterparty classification as a gating issue for eligibility.
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct law balances two competing policy goals: (1) preventing market manipulation and improper dealing, and (2) permitting legitimate market practices such as stabilisation around issuance. By granting a targeted exemption, MAS allows stabilisation to occur without triggering the prohibitions in sections 197 and 198—provided that the stabilisation is tightly bounded.
For market participants, the compliance value lies in the clarity of conditions. The exemption is narrow: it is limited to specific notes (SK Telecom fixed rate notes due April 2011, up to US$500 million), a specified stabilising actor (Credit Suisse First Boston (Europe) Limited and related corporations), specified counterparty categories (section 274 persons or sophisticated investors), and a strict time limit (no stabilising action after 30 calendar days from issuance). This structure reduces uncertainty and supports operational compliance planning.
From an enforcement and risk perspective, the time limitation is particularly significant. Stabilisation is often most sensitive immediately after issuance, and regulators typically expect stabilising activity to be short-lived and transparent. If stabilising activity continues beyond the 30-day period, the exemption ceases to apply, and the stabilising party could face regulatory action or other consequences under the underlying Act provisions. Accordingly, legal teams should ensure that dealing instructions, trading systems, and compliance monitoring are aligned with the 30-day cutoff.
Related Legislation
- Securities and Futures Act (SFA) (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 provided metadata)
- Stabilising Act (as referenced in the provided metadata)
- 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. 7) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.