Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 9) Regulations 2004
- Act Code: SFA2001-S185-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Regulation Number (SL): SL 185/2004
- Citation: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 9) Regulations 2004
- Commencement: 7 April 2004
- Status: Current version as at 27 March 2026 (per provided extract)
- Key Provisions: Section 1 (citation and commencement); 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. 9) Regulations 2004 is a targeted regulatory instrument that creates a narrow exemption from certain market conduct rules under the Securities and Futures Act (SFA). In practical terms, it addresses a common feature of securities issuance: “stabilising action”. Stabilisation is typically undertaken to support orderly trading and reduce excessive price volatility immediately after issuance.
However, stabilisation can also resemble conduct that market conduct rules are designed to prevent—such as manipulative trading or misleading market activity. This is why the SFA generally regulates (and in some cases prohibits) certain dealing practices. These Regulations carve out a specific exception, but only for stabilising action relating to a particular set of notes and only within defined boundaries.
Importantly, the exemption is not open-ended. It is limited by (i) the identity and characteristics of the notes, (ii) the identity of the counterparty categories involved in the stabilising transactions, and (iii) a strict time window after issuance. This makes the Regulations highly relevant for legal teams advising issuers, dealers, and trading desks involved in post-issuance market support activities.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal legal entry point. The Regulations may be cited by their short title and come into operation on 7 April 2004. For practitioners, this matters when determining whether stabilising activities were carried out while the exemption was available.
Section 2 (Definitions) is central because it defines the scope of the exemption with precision. Two defined terms drive the entire regime:
- “Notes” are defined narrowly as 10-year US dollar fixed rate subordinated notes due March 2014 issued by PT Bank Danamon Indonesia Tbk for a principal amount of up to US$300 million.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by Deutsche Bank AG London (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 compliance perspective, these definitions mean that the exemption is not a general stabilisation licence. It is a bespoke exemption tied to a specific issuance and a specific stabilising actor (Deutsche Bank AG London and its related corporations). If a different institution conducts stabilisation, or if the instrument is not within the defined “Notes”, the exemption would not apply.
Section 3 (Exemption) sets out the operative legal effect. The Regulations provide that, subject to 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 either of the following counterparties:
- Section 3(1)(a): a person referred to in section 274 of the Act; or
- Section 3(1)(b): a sophisticated investor as defined in section 275(2) of the Act.
While the extract does not reproduce sections 197, 198, 274, or 275, the structure signals a classic regulatory approach: the exemption is available only when stabilising transactions are conducted with particular categories of counterparties—typically those that are better able to understand market conduct risks and the nature of stabilisation activities. For counsel, the key task is to confirm whether the relevant counterparty qualifies under the referenced SFA provisions (including whether it is a “sophisticated investor” under the statutory definition).
Section 3(2) (Time limitation) imposes a hard stop. The exemption does not apply to stabilising action carried out at any time after the expiry of 30 calendar days from the date of issuance of the Notes.
This time limitation is often the most operationally sensitive element. Legal teams should ensure that trading policies, dealing instructions, and monitoring systems are aligned to the issuance date and that any stabilisation activity beyond the 30-day period is either avoided or separately assessed for compliance outside the exemption.
How Is This Legislation Structured?
These Regulations are structured in a straightforward three-part format:
- Section 1 sets out the citation and commencement date.
- Section 2 contains definitions that define the exact “Notes” and the “stabilising action” covered.
- Section 3 provides the exemption, specifying (i) which SFA provisions are disapplied (sections 197 and 198), (ii) the permitted counterparty categories (section 274 persons and sophisticated investors), and (iii) the temporal limit (30 calendar days from issuance).
Notably, the Regulations do not include extensive procedural requirements in the extract provided. Instead, they rely on the SFA’s broader market conduct framework and the precision of the exemption’s conditions. Practitioners should therefore read these Regulations together with the relevant SFA provisions they reference.
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined “Notes” and when carried out by the defined stabilising actor (Deutsche Bank AG London or its related corporations). In practice, this means the exemption is relevant to:
- the stabilising dealer and its related entities conducting the relevant buy/offer-to-buy activities; and
- the counterparties to those stabilising transactions, insofar as the exemption depends on whether the counterparty falls within section 274 of the SFA or is a sophisticated investor under section 275(2).
Because the exemption is conditional, it is not enough that the stabilisation is “for market price maintenance”. The counterparty must fall within the specified categories, and the stabilisation must occur within the 30-day post-issuance window. Parties outside these conditions may still be subject to sections 197 and 198 of the SFA, which remain applicable.
Why Is This Legislation Important?
These Regulations are important because they illustrate how Singapore’s market conduct regime balances two competing objectives: (1) preventing manipulative or improper market behaviour, and (2) allowing legitimate market stabilisation practices during the immediate post-issuance period. By disapplying sections 197 and 198 for a defined set of stabilising activities, the Regulations provide legal certainty for market participants engaged in stabilisation.
For practitioners, the value lies in the compliance “guardrails” embedded in the exemption. The defined scope reduces ambiguity: the notes are identified by issuer, instrument type, maturity, currency, and maximum principal amount; the stabilising actor is identified; the permitted counterparties are tied to statutory categories; and the time window is fixed at 30 calendar days. This makes it possible to design transaction workflows that can be documented and defended.
From an enforcement and risk perspective, the Regulations also highlight where stabilisation can become problematic. If stabilisation is conducted outside the permitted counterparty categories or after the 30-day period, the exemption falls away and the underlying market conduct prohibitions (sections 197 and 198 of the SFA) may apply. Counsel should therefore advise on monitoring, record-keeping, and internal approvals to ensure that stabilising trades remain within the exemption boundaries.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1)
- Futures Act (listed in provided metadata as related legislation)
- Stabilising Act (listed in provided metadata as related legislation)
- Timeline (legislation timeline reference for version control)
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. 9) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.