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
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 23 February 2006
- Regulation Number: SL 104/2006
- 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. 8) Regulations 2006 (“Stabilising Action Exemption Regulations”) creates a targeted regulatory exemption within Singapore’s market conduct framework. In essence, it allows certain “stabilising action” to be taken in relation to a specific issuance of notes—without triggering the prohibitions in sections 197 and 198 of the Securities and Futures Act (SFA).
In plain language, the Regulations recognise that stabilisation activities are sometimes used in capital markets to help maintain orderly trading conditions after a new issue. However, stabilisation can overlap with conduct that would otherwise be prohibited as market manipulation or improper dealing. This instrument resolves that tension by carving out a narrow exemption, but only if the stabilising activity meets strict conditions (including timing, the identity of counterparties, and minimum acquisition consideration).
Importantly, the exemption is not general. It is tied to a particular set of “Notes” (defined precisely in the Regulations) and to stabilising action taken by a specified market participant (Deutsche Bank Securities Inc., and related corporations). This makes the Regulations highly relevant for counsel advising on underwriting, distribution, and post-issuance market support activities for that specific transaction.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and states that the Regulations come into operation on 23 February 2006. For practitioners, this matters primarily for confirming the temporal scope of the exemption and aligning compliance advice with the issuance and trading timeline.
2. Definitions (Regulation 2)
Regulation 2 is central because it defines the scope of the exemption with precision. Three definitions drive the analysis:
- “Notes”: The Regulations define the Notes as 5-year US$ fixed rate notes due February 2011 issued by The Export-Import Bank of Korea for a principal amount of up to US$600 million. This is a transaction-specific definition; stabilisation in relation to other notes would not fall within the exemption.
- “securities”: “Securities” has the same meaning as in section 239(1) of the SFA. This cross-reference ensures that the exemption operates within the SFA’s established definitional architecture.
- “stabilising action”: Stabilising action means 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.
From a legal risk perspective, the definition requires both (i) the actor (Deutsche Bank Securities Inc. / related corporations) and (ii) the purpose (stabilising or maintaining market price). Counsel should therefore ensure that internal documentation and trading instructions reflect the stabilisation rationale, not an alternative commercial objective.
3. The exemption from sections 197 and 198 (Regulation 3)
Regulation 3 is the operative provision. It states that sections 197 and 198 of the SFA shall not apply to stabilising action taken in respect of any of the Notes, provided the stabilising action occurs within 30 days from the date of issue of the Notes and is undertaken with specified categories of counterparties.
The exemption is conditional in two key ways:
- Timing condition: Stabilising action must be taken within 30 days from the date of issue of the Notes. This is a hard temporal limit. Any stabilisation outside the 30-day window would fall back into the general SFA prohibitions.
- Counterparty / acquisition condition: The stabilising action must be carried out with one of the following categories:
- (a) an institutional investor
- (b) a “relevant person” as defined in section 275(2) of the SFA
- (c) a person who acquires the Notes as principal, but only if 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.
Practical implications of the $200,000 threshold. The Regulations include a minimum consideration requirement for principal acquisitions. This threshold is designed to limit the exemption to transactions of a certain size and to reduce the risk of stabilisation being used in smaller, potentially more manipulative dealings. For legal practitioners, this means advising on deal structuring and ensuring that trade confirmations, settlement documentation, and any non-cash consideration arrangements (e.g., exchange of securities or assets) can evidence compliance with the threshold.
Interaction with sections 197 and 198. While the extract does not reproduce the text of sections 197 and 198, the structure indicates that those sections contain prohibitions that would otherwise apply to the relevant conduct. The exemption therefore functions as a statutory “safe harbour” (though narrower than a typical safe harbour) for stabilisation activities meeting the defined conditions.
4. Making date and signature
The Regulations were made on 20 February 2006 by Heng Swee Keat, Managing Director of MAS. For practitioners, the making date can be relevant when considering whether any stabilisation occurred before formal enactment, although the commencement date is expressly stated as 23 February 2006.
How Is This Legislation Structured?
The Regulations are concise and comprise only three substantive provisions:
- Regulation 1 (Citation and commencement): sets the short title and commencement date.
- Regulation 2 (Definitions): defines “Notes,” “securities,” and “stabilising action,” thereby controlling the scope of the exemption.
- Regulation 3 (Exemption): provides the exemption from the SFA prohibitions in sections 197 and 198, subject to timing and counterparty/consideration conditions.
Because the instrument is so short, the legal analysis largely turns on the defined terms and the conditions in Regulation 3. There are no additional parts or complex procedural requirements in the text provided.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action in relation to the defined Notes. In practice, it primarily benefits the specified stabiliser: Deutsche Bank Securities Inc. and its related corporations. However, the exemption also depends on the identity and status of the counterparties involved in the stabilising trades—namely institutional investors, “relevant persons” under the SFA, or principal acquirers meeting the minimum consideration threshold.
Accordingly, the Regulations are relevant to:
- Deal counsel advising on underwriting and distribution arrangements for the Export-Import Bank of Korea notes;
- Trading and compliance teams responsible for market conduct controls and post-issuance trading policies;
- Counterparties (institutional investors and other relevant persons) whose participation may affect whether stabilisation is exempt.
Because the “Notes” definition is transaction-specific, the Regulations do not generally apply to stabilisation of other issuances. Counsel should therefore confirm the exact instrument and issuance details before relying on the exemption.
Why Is This Legislation Important?
This Regulations matters because it provides a narrow legal pathway for market stabilisation activities that might otherwise be prohibited under Singapore’s market conduct regime. For issuers, arrangers, and financial institutions, stabilisation can be commercially important to support price discovery and reduce volatility immediately after issuance. Without an exemption, stabilisation could expose participants to regulatory enforcement risk.
At the same time, the Regulations demonstrate MAS’s approach: exemptions are not automatic. They are tightly bounded by (i) the identity of the stabiliser, (ii) the specific notes, (iii) a strict 30-day post-issue window, and (iv) counterparty and consideration constraints. These limitations are designed to ensure that stabilisation remains a controlled market support mechanism rather than a vehicle for improper market influence.
For practitioners, the most important compliance takeaway is evidentiary and process-based. To rely on the exemption, firms should be able to show that stabilising trades were executed within the permitted period, involved eligible counterparties, and met the minimum consideration requirement where principal acquisitions are involved. This typically requires coordinated documentation across legal, compliance, and trading desks, including trade capture systems, approvals, and post-trade records.
Related Legislation
- Securities and Futures Act (SFA) (Cap. 289) — including sections 197, 198, 239(1), 275(2), and the enabling power in section 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline / Legislation timeline (for version control and amendments tracking)
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.