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) (notably section 337(1))
- Commencement: 23 March 2004
- Enacting Formula: Made by the Monetary Authority of Singapore (MAS) under powers in section 337(1) of the Securities and Futures Act
- Status: Current version as at 27 March 2026 (per the legislation record)
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Regulation Number: SL 124/2004
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 that creates a narrow exemption from certain market conduct rules under the Securities and Futures Act (SFA). In practical terms, it addresses a specific type of market activity—“stabilising action”—that may occur around the issuance and trading of newly issued notes.
In capital markets practice, stabilisation is often used to reduce volatility and support orderly trading in the period immediately following issuance. However, stabilisation can also raise concerns about market manipulation or misleading price formation. The SFA therefore contains provisions that restrict or regulate conduct that could affect market prices. This set of Regulations carves out a limited exemption, allowing stabilising activity in relation to a particular issuance of notes, subject to strict conditions.
Importantly, the Regulations are not a general stabilisation regime. They are issuance-specific and counterparty-specific: they define “Notes” as a particular fixed rate notes programme issued by SK Telecom Co., Ltd. (due April 2011) up to a specified principal amount, and they define “stabilising action” as action taken by Credit Suisse First Boston (Europe) Limited (and related corporations) to buy or offer to buy the Notes to stabilise or maintain their market price. The exemption is therefore designed to facilitate a particular transaction while still maintaining overall market integrity.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the short title and confirms that the Regulations come into operation on 23 March 2004. For practitioners, this matters when assessing whether stabilising activity occurred within the legal framework created by these Regulations.
Section 2 (Definitions) is central because the exemption depends entirely on whether the relevant activity falls within the defined scope. Two definitions are provided:
- “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 compliance perspective, these definitions create a “closed set” of qualifying conduct. If the stabilising activity is performed by a different entity (not Credit Suisse First Boston (Europe) Limited or its related corporations), or if it relates to different notes, the exemption would not apply. Similarly, if the activity is not undertaken for the purpose of stabilising or maintaining the market price, it may fall outside the definition.
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 any stabilising action carried out in respect of any of the Notes 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.
Although the extract does not reproduce the text of sections 197 and 198, the structure indicates that those sections impose restrictions or prohibitions on certain market conduct. The Regulations effectively suspend those restrictions for the specified stabilising action, but only when the stabilising activity is carried out with the specified categories of counterparties (section 274 persons or sophisticated investors).
Section 3(2) (Time limitation) imposes a further and critical condition: the exemption does not apply to any 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 is a common feature of stabilisation exemptions—stabilisation is permitted only in the immediate post-issuance window, after which the exemption falls away and the general market conduct rules resume.
For transactional lawyers, the time condition is often the most operationally sensitive. It requires careful documentation of the issuance date and monitoring of trade dates (and potentially settlement dates, depending on how the SFA provisions are interpreted in enforcement practice). Practitioners should ensure that stabilising orders, offers, and actual purchases are tracked against the 30-calendar-day deadline.
How Is This Legislation Structured?
This subsidiary legislation is structured as a short instrument with three substantive provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of the exemption.
- Section 3 contains the exemption and its conditions, including the counterparty limitation and the 30-day time limit.
There are no additional parts or schedules in the extract, reflecting the Regulations’ narrow, transaction-specific purpose.
Who Does This Legislation Apply To?
The Regulations apply to parties engaging in stabilising action in relation to the defined Notes. In practice, the exemption is aimed at the stabilising arranger/market participant identified in the definition of “stabilising action”—namely Credit Suisse First Boston (Europe) Limited and its related corporations. However, the exemption also depends on who the stabilising action is carried out with, because section 3(1) limits the exemption to stabilising action carried out with:
- persons referred to in section 274 of the SFA, or
- sophisticated investors under section 275(2) of the SFA.
Accordingly, the exemption is not simply about the stabiliser’s identity; it is also about the counterparty category. Even if the stabilising activity is performed by the defined entity, it may not be exempt if the trades are conducted with counterparties outside the specified categories.
Because the Regulations are issuance-specific, they do not create a general permission for stabilisation in any notes market. They apply only to the defined SK Telecom notes (fixed rate notes due April 2011, up to US$500 million) and only during the permitted post-issuance period.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing objectives: (1) allowing legitimate market practices that support orderly trading, and (2) preventing conduct that could undermine market integrity. By exempting stabilising action from particular SFA provisions, MAS enables transaction execution while still embedding guardrails—most notably the counterparty limitation and the 30-day cap.
For practitioners, the value lies in the precision of the exemption. Stabilisation is often scrutinised because it can affect price discovery. The Regulations therefore provides a clear legal pathway for stabilising activity, but only when the activity is tightly within the defined parameters. This reduces uncertainty for arrangers and stabilising agents, provided they implement robust compliance controls to ensure that trades fall within the exemption.
From an enforcement and risk perspective, the time limitation is a key compliance checkpoint. If stabilising activity continues beyond the 30-calendar-day period, the exemption ceases and the general restrictions in sections 197 and 198 would apply. Similarly, if stabilising trades are executed with counterparties that do not qualify under section 274 or the sophisticated investor definition, the exemption would not protect those trades. Lawyers advising on documentation, trade surveillance, and post-trade reporting should therefore treat the exemption as conditional and auditable.
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 legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Legislation Timeline / MAS legislative timeline (for version control and amendment history)
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.