Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 8) Regulations 2006
- Act Code: SFA2001-S104-2006
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Section 337(1) of the Securities and Futures Act
- Commencement: 23 February 2006
- Regulations: 3 sections (Sections 1–3)
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “Notes” and “stabilising action”)
- Section 3: Exemption from Sections 197 and 198 of the Act for specified stabilising action in respect of specified Notes
- Notes (defined instrument): 5-year US$ fixed rate notes due February 2011 issued by The Export-Import Bank of Korea for up to US$600 million
- Stabilising party (defined): Deutsche Bank Securities Inc. or related corporations
- Time window for exemption: Within 30 days from the date of issue of the Notes
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 8) Regulations 2006 is a narrow, instrument-specific set of regulations that creates a regulatory exemption for certain “stabilising actions” taken in connection with a particular issuance of notes.
In plain terms, the Regulations recognise that, during the initial period after a new debt instrument is issued, market participants may undertake stabilisation activities—such as buying the instrument or offering to buy it—to help maintain orderly trading and reduce excessive price volatility. However, the Securities and Futures Act contains general market conduct provisions that can restrict or regulate such dealings. These Regulations carve out a targeted exception so that stabilisation can occur without breaching the relevant statutory prohibitions, provided strict conditions are met.
Importantly, the exemption is not open-ended. It is limited to (i) stabilising action taken in respect of the defined “Notes”, (ii) stabilising action taken by the defined stabilising party (Deutsche Bank Securities Inc. or its related corporations), (iii) a defined time period (30 days from issue), and (iv) stabilising counterparties falling within specified categories (institutional investors, “relevant persons”, or principal purchasers meeting a minimum consideration threshold).
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title and states that the Regulations came into operation on 23 February 2006. For practitioners, this matters when assessing whether stabilising activities were conducted within the regulatory framework applicable at the time of the issuance and early trading period.
Section 2 (Definitions) is the core interpretive section. It defines three key terms that determine the scope of the exemption:
- “Notes” are defined very specifically: 5-year US$ fixed rate notes due February 2011 issued by The Export-Import Bank of Korea, with a principal amount of up to US$600 million. This definition is crucial because the exemption is not available for other issuances or other maturities or currencies.
- “securities” has the same meaning as in section 239(1) of the Securities and Futures Act. This cross-reference ensures that the regulatory framework aligns with the Act’s broader classification of financial instruments.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by Deutsche Bank Securities Inc. (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. The definition is broad enough to include not only actual purchases but also offers or agreements to purchase.
From a compliance perspective, the definition captures both the conduct (buying or agreeing to buy) and the purpose (stabilise or maintain market price). Lawyers advising issuers or dealers should therefore focus on contemporaneous documentation and the factual basis for characterising transactions as stabilisation rather than ordinary trading or distribution.
Section 3 (Exemption) provides the operative relief. It states that Sections 197 and 198 of the Act shall not apply to any stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with stabilising action counterparties falling within one of three categories:
- (a) an institutional investor
- (b) a “relevant person” as defined in section 275(2) of the Act
- (c) a person who acquires the Notes as principal, provided the consideration is not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether paid in cash or by exchange of securities or other assets
Practically, this means the exemption is conditional not only on the stabilising party and the instrument, but also on the type of counterparty and (for principal acquisitions) a minimum transaction value. The $200,000 threshold is designed to ensure that the exemption applies to larger, more sophisticated or institutional-type transactions rather than small retail dealings.
For practitioners, the most important interpretive questions typically include:
- What counts as “within 30 days from the date of issue”? The exemption is time-bound; advisers should confirm the “date of issue” used in the offering documentation and ensure stabilisation trades fall within that window.
- How to evidence that the action is “stabilising”? Because the definition includes the stabilisation purpose, firms should maintain internal records (e.g., stabilisation plans, approvals, trade rationale) demonstrating that the trades were undertaken to stabilise or maintain market price.
- How to apply the counterparty categories—especially the “relevant person” definition and the principal acquisition threshold. Where trades are executed through intermediaries, counsel should consider whether the legal counterparty to the transaction fits the statutory category.
How Is This Legislation Structured?
The Regulations are structured as a short, three-section instrument:
- Section 1 sets out the citation and commencement date.
- Section 2 provides definitions that determine the scope of the exemption, including the specific “Notes” and the meaning of “stabilising action”.
- Section 3 contains the exemption clause, specifying that Sections 197 and 198 of the Securities and Futures Act do not apply to qualifying stabilising action within a specified period and subject to counterparty conditions.
Because the Regulations are so concise, the legal effect is concentrated in Section 3. There are no separate schedules or detailed procedural requirements in the text provided; instead, practitioners must read Section 3 together with the referenced provisions in the Securities and Futures Act (Sections 197, 198, and the “relevant person” definition in section 275(2)).
Who Does This Legislation Apply To?
The exemption is designed for market conduct compliance in the context of a specific debt issuance. It applies to stabilising actions taken by Deutsche Bank Securities Inc. or its related corporations (as defined), in respect of the defined “Notes”. The exemption is therefore not a general authorisation for any dealer to stabilise any notes; it is tightly tied to the defined stabilising party and the defined instrument.
In terms of counterparties, Section 3 limits the exemption to stabilising actions involving transactions with institutional investors, relevant persons, or principal acquirers meeting the $200,000 minimum consideration threshold per transaction. Accordingly, advisers should treat the Regulations as a compliance “gate” that depends on both the stabilisation conduct and the identity and status/value of the counterparty.
Why Is This Legislation Important?
This Regulations matters because it reconciles two competing policy objectives: (i) preventing improper market manipulation or misleading market conduct, and (ii) allowing legitimate stabilisation practices that can support price discovery and orderly trading in the immediate aftermath of a new issuance.
By exempting qualifying stabilising action from Sections 197 and 198 of the Securities and Futures Act, the Regulations provide legal certainty to the stabilising dealer and its compliance teams. Without such an exemption, stabilisation trades—particularly purchases or agreements to purchase—could potentially be characterised as prohibited conduct under the Act’s market conduct regime. The exemption therefore reduces regulatory risk and supports structured underwriting and distribution strategies.
From a practitioner’s standpoint, the key practical impact is that counsel must ensure that stabilisation programmes are implemented within the statutory boundaries: correct instrument identification, correct stabilising party, correct time window, and correct counterparty categories and thresholds. Failure to meet any condition could mean the exemption does not apply, exposing the firm and relevant individuals to potential enforcement under the underlying Act provisions.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Sections 197 and 198 (the provisions from which stabilising action is exempted)
- Section 275(2) (definition of “relevant person”)
- Section 239(1) (definition of “securities”)
- Section 337(1) (power to make these Regulations)
- Futures Act (not directly quoted in the extract, but referenced in the provided metadata as part of the broader regulatory ecosystem)
- Stabilising Act (referenced in the provided metadata; practitioners should verify whether this is a separate instrument or a shorthand reference in the platform’s taxonomy)
- Timeline (platform reference to versioning; relevant for confirming the “current version” as at 27 March 2026)
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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.