Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 8) Regulations 2004
- Act Code: SFA2001-S146-2004
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289) — powers under section 337(1)
- Commencement: 29 March 2004
- Legislation Status: Current version as at 27 March 2026 (per the platform timeline)
- Regulation Number: SL 146/2004
- Key Provisions: Section 2 (definitions), Section 3 (exemption)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Enacting Date: 23 March 2004
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 8) Regulations 2004 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption from certain market conduct rules under the Securities and Futures Act (SFA). In plain terms, it allows specified financial institutions to take “stabilising action” in relation to a particular bond issuance—without triggering the prohibitions that would otherwise apply.
The regulations are narrow in scope. They do not create a general exemption for all stabilisation activities. Instead, they are tied to a defined set of “Notes” (a specific 10-year fixed rate subordinated notes issuance by Korea Highway Corporation) and a defined set of stabilising participants (named market intermediaries and their related corporations). The exemption is also time-limited: it does not apply to stabilising action carried out after a 30-calendar-day period from the date of issuance.
Practically, the legislation reflects a common market practice in capital markets: stabilisation is used to help maintain orderly trading and reduce extreme price volatility immediately after issuance. However, stabilisation can resemble prohibited conduct if not properly framed. These regulations reconcile the policy tension by permitting stabilisation in a controlled manner, while still preserving the general market integrity framework under the SFA.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and commencement date. The regulations “shall come into operation on 29th March 2004.” For practitioners, this matters for determining whether stabilising activities undertaken around the issuance period fall within the regulatory framework.
2. Definitions (Regulation 2)
Regulation 2 is central because it defines the scope of the exemption. Two defined terms drive the entire instrument:
- “Notes” means the 10-year fixed rate subordinated notes due April 2014 issued by Korea Highway Corporation for a principal amount of up to US$750 million.
- “stabilising action” means an action taken in Singapore or elsewhere by Citigroup Global Markets Inc., Deutsche Bank Securities Inc., JP Morgan Securities Ltd, or any of their 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.
These definitions are deliberately restrictive. The exemption is not available for stabilisation of other securities, other issuers, or by other intermediaries. Even within the relevant Notes, the exemption is limited to the named stabilising entities (and their related corporations) and to stabilisation actions aimed at maintaining market price.
3. Exemption from sections 197 and 198 of the SFA (Regulation 3)
The operative provision is Regulation 3. It provides that, subject to the conditions in paragraph (2), sections 197 and 198 of the Act shall not apply to stabilising action carried out in respect of any of the Notes with:
- 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 excerpt does not reproduce sections 197, 198, 274, and 275, the structure indicates that the SFA generally restricts certain market conduct and/or trading behaviours, and that those restrictions apply differently depending on the counterparty category (e.g., persons within section 274 and sophisticated investors under section 275(2)). This exemption carves out stabilising action from those prohibitions, but only when the stabilising action is carried out with the specified categories of counterparties.
4. Time limitation (Regulation 3(2))
Regulation 3(2) imposes a hard stop: the exemption “shall 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 the issuance of the Notes.”
For compliance and documentation, this is a key operational constraint. Market participants must be able to evidence the issuance date and ensure that any stabilisation activity ceases within the 30-day window. The phrase “at any time after the expiry” suggests that even stabilisation occurring on day 31 (or later) would fall outside the exemption, potentially exposing the conduct to the underlying prohibitions in sections 197 and 198.
How Is This Legislation Structured?
The regulations are extremely concise and consist of:
- Regulation 1 — Citation and commencement (29 March 2004).
- Regulation 2 — Definitions of “Notes” and “stabilising action”.
- Regulation 3 — The exemption: it excludes the application of sections 197 and 198 of the SFA to qualifying stabilising action, subject to (i) the counterparty category and (ii) the 30-calendar-day limit.
There are no additional parts, schedules, reporting obligations, or procedural steps in the excerpted text. As a result, the legal effect is primarily determined by the defined scope in Regulation 2 and the conditions in Regulation 3.
Who Does This Legislation Apply To?
In terms of persons, the exemption is relevant to the stabilising intermediaries identified in the definition of “stabilising action”: Citigroup Global Markets Inc., Deutsche Bank Securities Inc., JP Morgan Securities Ltd, and their related corporations. It is also relevant to the categories of counterparties specified by reference to the SFA—namely persons referred to in section 274 and sophisticated investors under section 275(2).
In terms of transactions, it applies only to stabilising action carried out “in respect of” the defined Notes (Korea Highway Corporation’s 10-year fixed rate subordinated notes due April 2014, up to US$750 million). The exemption is therefore not a general market conduct relief; it is a transaction-specific and participant-specific carve-out.
Why Is This Legislation Important?
This instrument is important because it provides legal certainty for stabilisation activities in a regulated market environment. Without an exemption, stabilisation conduct—particularly buying, offering to buy, or agreeing to buy securities to influence price—could be characterised as prohibited market conduct under the SFA. By expressly disapplying sections 197 and 198 in defined circumstances, the regulations reduce the risk of inadvertent breach.
For practitioners advising issuers, arrangers, underwriters, and trading desks, the key value lies in the precision of the exemption. The regulations specify: (i) the exact security, (ii) the exact stabilising entities, (iii) the counterparty categories, and (iv) the time window. This precision supports a compliance approach grounded in transaction documentation (offering documents, stabilisation notices, internal trading authorisations) and in controls ensuring that stabilisation is confined to the permitted period.
From an enforcement perspective, the time limitation is likely the most operationally sensitive element. Stabilisation regimes are often scrutinised because they can affect price discovery. By limiting the exemption to the first 30 calendar days, MAS signals that stabilisation is acceptable only as a short-term market support mechanism. After that period, stabilisation actions would revert to the general market conduct framework, and the exemption would no longer protect the conduct.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 274, 275(2), and the exemption-making power in section 337(1).
- Futures Act (referenced in the statute metadata timeline context).
- Stabilising Act (referenced in the statute metadata timeline context).
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. 8) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.