Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 7) Regulations 2005
- Act Code: SFA2001-S69-2005
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Regulation Number / Citation: SL 69/2005
- Citation and Commencement: 8 February 2005
- Status: Current version as at 27 March 2026
- Key Provisions: Section 2 (Definitions); Section 3 (Exemption)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 7) Regulations 2005 (“Stabilising Action (Notes) Regulations”) is a targeted regulatory instrument. In plain language, it creates a specific exemption from certain market conduct rules in the Securities and Futures Act (SFA) for a particular type of stabilising activity carried out in relation to a defined bond issuance.
Stabilisation is a common market practice in securities offerings. After issuance, an arranger or its related entities may buy (or offer to buy) securities to help maintain orderly trading and reduce excessive price volatility. However, stabilisation can overlap with prohibitions on market manipulation or improper dealing. This legislation addresses that tension by carving out a narrow exemption where stabilising action is conducted under defined conditions.
Importantly, the exemption is not general. It is tied to a specific instrument—“Notes” defined in the Regulations—and to stabilising action taken by BNP Paribas (and its related corporations). It also limits the time window for the stabilising activity and restricts the categories of counterparties involved.
What Are the Key Provisions?
Section 1: Citation and commencement confirms the legal identity and timing of the Regulations. 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 2005” and came into operation on 8 February 2005. For practitioners, commencement matters because the exemption can only be relied upon for stabilising action occurring within the statutory framework.
Section 2: Definitions sets the boundaries of the exemption. Two definitions are central:
- “Notes” are defined narrowly as the 5-year floating rate notes due February 2010 issued by Export-Import Bank of Thailand for a principal amount of up to US$150 million.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by BNP Paribas (or any of 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.
These definitions are crucial for compliance analysis. If the instrument is not the specified Notes, or if the stabiliser is not BNP Paribas (or a related corporation), the exemption will not apply. Likewise, the conduct must be directed to stabilisation/price maintenance, not to other commercial objectives.
Section 3: Exemption is the operative provision. It provides 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, provided the stabilising action is taken with a person in one of two categories:
- (a) a person referred to in section 274 of the SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
From a practitioner’s perspective, Section 3 does three things at once:
- It identifies the SFA provisions being disapplied (Sections 197 and 198). While the extract does not reproduce those sections, the legal effect is clear: the stabilising action is insulated from the relevant market conduct prohibitions that would otherwise apply.
- It imposes a strict temporal limit: the stabilising action must occur within 30 days from the date of issue. This is a classic stabilisation window and is likely intended to align with market practice and to reduce the risk of prolonged manipulation.
- It restricts counterparties to persons in section 274 or sophisticated investors. This counterparty limitation is a compliance safeguard: stabilisation is permitted only when the dealing is structured with eligible counterparties, reducing the likelihood of unfair dealing with retail investors.
In practical terms, a lawyer advising BNP Paribas or its related corporations would focus on documenting: (i) the exact Notes and issuance date; (ii) the stabilising strategy and whether it is genuinely aimed at stabilisation/price maintenance; (iii) the timing (within 30 days); and (iv) the identity and legal status of the counterparty (section 274 person or sophisticated investor).
How Is This Legislation Structured?
The Regulations are concise and consist of three sections:
- Section 1 (Citation and commencement) sets the effective date.
- Section 2 (Definitions) defines “Notes” and “stabilising action,” which are the two key concepts that determine the scope of the exemption.
- Section 3 (Exemption) provides the legal relief by disapplying specified SFA provisions (Sections 197 and 198) for stabilising action meeting the conditions (instrument, actor, timing, and counterparty category).
There are no additional parts or schedules in the extract provided. The structure reflects a common approach for stabilisation exemptions: rather than creating a broad framework, MAS issues targeted regulations tied to specific issuances and stabilising participants.
Who Does This Legislation Apply To?
The exemption is directed at stabilising actions taken by BNP Paribas or its related corporations in relation to the defined Export-Import Bank of Thailand notes. While the Regulations are “market conduct” rules, the exemption is actor-specific through the definition of “stabilising action.” Therefore, other market participants cannot rely on this exemption unless they fall within the definition (i.e., BNP Paribas or a related corporation) and act in relation to the specified Notes.
Additionally, the exemption is conditional on the counterparty category. The stabilising action must be taken with either (i) a person referred to in section 274 of the SFA or (ii) a sophisticated investor under section 275(2). This means that even where the stabiliser and instrument match, the exemption may fail if the stabilising trades are executed with ineligible counterparties.
Why Is This Legislation Important?
This Regulations is important because it clarifies how stabilisation can be conducted without triggering certain SFA market conduct prohibitions. For issuers, arrangers, dealers, and compliance teams, the exemption provides legal certainty for a practice that is commercially valuable but potentially risky from a regulatory perspective.
From an enforcement and compliance standpoint, the exemption is also a reminder that stabilisation is not a blanket permission. The exemption is tightly bounded by: (i) the specific Notes; (ii) the specific stabilising actor (BNP Paribas and related corporations); (iii) the timing window (within 30 days from issue); and (iv) the counterparty categories (section 274 persons or sophisticated investors). These constraints are likely designed to balance market integrity with the practical needs of post-issuance trading support.
For practitioners, the most significant work is usually not reading the exemption itself, but mapping it to the underlying SFA provisions being disapplied (Sections 197 and 198) and to the definitions and categories referenced (sections 274 and 275(2)). In advising clients, lawyers should also consider how stabilising activity is documented and reported internally, and how trade confirmations, dealing records, and counterparty classifications are maintained to demonstrate eligibility for the exemption.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — particularly Sections 197, 198, 274, 275(2), and the authorising power in section 337(1).
- Futures Act (as referenced in the legislation metadata context)
- Stabilising Act (as referenced in the legislation metadata context)
- Timeline (legislation versioning reference)
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.