Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 8) Regulations 2005
- Act Code: SFA2001-S85-2005
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Citation: S 85/2005 (SL 85/2005)
- Commencement: 18 February 2005
- Status: Current version as at 27 March 2026 (per legislation portal)
- 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. 8) Regulations 2005 (“Stabilising Exemption Regulations”) is a targeted regulatory instrument made under the Securities and Futures Act (“SFA”). In plain terms, it creates a narrow exemption from certain market conduct rules for a specific type of market activity—“stabilising action”—carried out in relation to a particular bond issuance.
The Regulations are not a general framework for stabilisation. Instead, they are transaction-specific: they define “Notes” as the 3-year fixed rate senior notes due February 2008 issued by Equitable PCI Bank, Inc. (up to US$150 million), and they define “stabilising action” as stabilisation-related dealing activity in Singapore or elsewhere by J.P. Morgan Securities Ltd. (or its related corporations). The exemption is then limited to stabilising actions taken within a defined time window after issuance.
Accordingly, the Regulations sit at the intersection of (i) the SFA’s market conduct regime (including restrictions on certain dealings around issuance and trading), and (ii) the practical realities of capital markets where stabilisation is sometimes used to support orderly trading and reduce volatility immediately after a new issuance. The exemption allows stabilisation to occur without triggering the prohibitions in the specified SFA provisions, but only if the conditions are met.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the legal identity and effective date. The Regulations may be cited by their full title and come into operation on 18 February 2005. For practitioners, this matters because the exemption’s availability depends on the timing of stabilising action relative to the issuance and the statutory window.
Section 2 (Definitions) is central because it tightly constrains the scope of the exemption. Two defined terms do the work:
(a) “Notes” means the 3-year fixed rate senior notes due February 2008 issued by Equitable PCI Bank, Inc. for a principal amount of up to US$150 million. This definition is highly specific—if the instrument is not those notes (or not within the stated issuance parameters), the exemption does not apply.
(b) “stabilising action” means an action taken in Singapore or elsewhere by J.P. Morgan Securities Ltd. (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 captures not only actual purchases but also offers or agreements to purchase—important for compliance because conduct can occur at the level of commitments and conditional arrangements, not just executed trades.
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the Act shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with the stabilising action being taken with 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.
While the extract does not reproduce Sections 197, 198, 274, and 275(2), the structure indicates a classic conditional exemption: the market conduct prohibitions in Sections 197 and 198 are carved out only for stabilisation activity that (i) relates to the defined Notes, (ii) is carried out by the defined stabilising actor (per the definition of stabilising action), (iii) occurs within the specified 30-day post-issuance window, and (iv) is conducted in dealings with the specified categories of counterparties.
For legal practice, the counterparty condition is particularly significant. The exemption is not a blanket permission to stabilise in any market context. It is limited to stabilising action “with” persons falling within the SFA’s defined categories (section 274) or with sophisticated investors (section 275(2)). This means compliance teams must verify both the timing (within 30 days from the date of issue) and the counterparty classification for each dealing or arrangement that could be characterised as stabilising action.
Finally, the enacting formula includes the making date: the Regulations were made on 27 January 2005 by the Managing Director of the Monetary Authority of Singapore (“MAS”), but they commence on 18 February 2005. Practitioners should note the distinction between “made” and “commenced” dates when assessing whether conduct fell within the regulatory framework at the relevant time.
How Is This Legislation Structured?
The Regulations are extremely concise and consist of three substantive provisions:
Section 1 sets out the citation and commencement.
Section 2 provides definitions that determine the scope of the exemption—specifically, what counts as the “Notes” and what counts as “stabilising action”.
Section 3 creates the exemption from the SFA’s market conduct provisions (Sections 197 and 198) and sets out the conditions: the stabilising action must be in respect of the defined Notes, within 30 days from issue, and conducted with the specified categories of persons (section 274 persons or sophisticated investors under section 275(2)).
Who Does This Legislation Apply To?
Although the exemption is framed as applying to “stabilising action” in relation to the Notes, the practical beneficiaries are the entities that may conduct such stabilising action. The definition of stabilising action restricts the relevant actor to J.P. Morgan Securities Ltd. and its related corporations. Therefore, the exemption is effectively tailored to that stabilising dealer group.
In addition, the exemption is conditional on the counterparty category. Stabilising action must be taken “with” either persons referred to in section 274 of the SFA or with a sophisticated investor as defined in section 275(2). This means that even where the stabilising dealer is within scope, the exemption may not apply if the stabilising dealings are conducted with counterparties outside those categories.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct regime accommodates capital markets practices while maintaining regulatory control. Stabilisation can involve buying activity around issuance that, absent an exemption, might be caught by prohibitions in the SFA designed to prevent manipulative or unfair market conduct. By carving out Sections 197 and 198 for a limited period and limited counterparties, the Regulations provide legal certainty for a specific issuance and stabilisation programme.
From a practitioner’s perspective, the key value lies in the precision of the conditions. The exemption is not merely about “stabilising action” in general; it is about stabilising action in respect of a particular bond, by a particular dealer group, within a specific post-issuance timeframe, and with specified counterparty types. Compliance failures in any of these elements could mean the exemption does not apply, exposing the stabilising activity to the underlying prohibitions in Sections 197 and 198.
In practice, this requires careful documentation and controls. Legal and compliance teams should ensure that:
- the instrument being dealt in is the defined “Notes” (including confirming the issuance details and principal amount parameters);
- the stabilising activity is within 30 days from the date of issue (requiring accurate determination of the issue date);
- the dealing activity falls within the definition of stabilising action (including offers or agreements to buy, not only executed trades); and
- counterparties are verified as persons under section 274 or as sophisticated investors under section 275(2), with appropriate evidence retained.
Moreover, because the Regulations are current as at 27 March 2026 (per the portal status), practitioners should still treat them as operative for the relevant issuance context, while also checking whether any later amendments or related instruments affect the broader market conduct landscape.
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 context)
- Stabilising Act (as referenced in the legislation metadata context)
- Timeline (legislation portal timeline for version verification)
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.