Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 9) Regulations 2005
- Act Code: SFA2001-S95-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) — powers under section 337(1)
- Commencement: 23 February 2005
- Enacting authority: Monetary Authority of Singapore (MAS)
- Key provisions: Section 2 (definitions); Section 3 (exemption)
- Regulatory status: Current version as at 27 March 2026 (per the legislation record)
- Legislative instrument number: SL 95/2005
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 9) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted regulatory instrument that creates a narrow exemption from certain market conduct rules under the Securities and Futures Act (SFA). In plain terms, it allows specified market participants to take “stabilising action” in relation to a particular issuance of notes without breaching the general prohibitions that would otherwise apply.
Stabilisation is a common feature of securities issuance and trading. When new debt securities are issued, the market price may fluctuate sharply due to initial supply and demand. Stabilising activity—typically conducted by or through the issuer’s financial intermediary—aims to support orderly trading and reduce extreme price volatility. However, stabilisation can resemble prohibited conduct if it is not carefully constrained, disclosed, and limited to the relevant timeframe and circumstances.
This set of Regulations addresses that tension by carving out an exemption for stabilising action in respect of a defined set of “Notes” (a specific US$ fixed rate notes issuance by Rizal Commercial Banking Corporation). The exemption is time-limited (within 30 days from the date of issue) and restricted to stabilising action carried out by a defined group of persons, namely UBS AG Singapore Branch (and its related corporations), acting in Singapore or elsewhere.
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 2005. For practitioners, this matters because the exemption only applies to stabilising action taken after the Regulations commence (and, in any event, within the further time window specified in the exemption).
2. Definitions (Regulation 2)
Regulation 2 is crucial because the exemption is highly specific. It defines two key terms:
- “Notes”: The Regulations define the Notes as the 3-year US$ fixed rate notes due February 2008 issued by Rizal Commercial Banking Corporation, with a principal amount of up to US$300 million.
- “stabilising action”: This means an action taken in Singapore or elsewhere by UBS AG Singapore Branch (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.
Practically, these definitions mean that the exemption is not generic. It is tied to a particular instrument (the Rizal Commercial Banking Corporation notes) and to a particular stabilising actor (UBS AG Singapore Branch and its related corporations). If a different issuer, different notes, or a different intermediary is involved, the exemption may not apply.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
The operative provision is Regulation 3. It states that sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, provided the stabilising action is taken with one of the following categories of counterparties:
- (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.
In plain language, the exemption permits stabilising purchases (or offers/agreements to buy) of the specified notes during the first 30 days after issuance, but only when the stabilising transactions are conducted with either (i) the specific class of persons identified in section 274, or (ii) sophisticated investors. This is a compliance “gatekeeping” mechanism: it limits stabilisation to transactions involving counterparties that meet the SFA’s investor sophistication or eligibility framework.
4. Time and scope constraints
Even though Regulation 3 is short, it embeds multiple constraints that practitioners must treat as non-negotiable:
- Time limit: stabilising action must be taken within 30 days from the date of issue of the Notes.
- Instrument limit: the action must relate to the defined “Notes” issuance.
- Actor limit: the action must fall within the defined meaning of “stabilising action” (UBS AG Singapore Branch or its related corporations).
- Counterparty limit: the stabilising action must be taken with persons in section 274 or with sophisticated investors under section 275(2).
For legal and compliance teams, these constraints typically translate into documentation requirements (e.g., confirming the issuance date, confirming the notes’ identity, confirming the counterparty category, and maintaining evidence that the purpose was stabilisation/price maintenance).
How Is This Legislation Structured?
The Regulations are structured as a short instrument with three main provisions:
- Regulation 1 (Citation and commencement): sets the short title and commencement date.
- Regulation 2 (Definitions): defines “Notes” and “stabilising action,” which are essential to determining whether the exemption is available.
- Regulation 3 (Exemption): provides the legal carve-out from the application of sections 197 and 198 of the SFA, subject to the 30-day period and the specified counterparty categories.
Because the instrument is compact, the practitioner’s task is largely interpretive and compliance-oriented: ensuring that the stabilising activity fits precisely within the defined terms and conditions.
Who Does This Legislation Apply To?
Although the Regulations are made under the SFA and operate as a legal exemption from statutory provisions, their practical application is directed at the parties conducting stabilising activity in relation to the specified notes. The definition of “stabilising action” identifies UBS AG Singapore Branch and its related corporations as the relevant stabilising actors. Accordingly, the exemption is most relevant to UBS’s Singapore branch operations and any related corporate entities participating in the stabilisation process.
Additionally, the exemption is conditional on the identity of the counterparty. Regulation 3 requires that stabilising action be taken with either (i) persons referred to in section 274 of the SFA or (ii) sophisticated investors as defined in section 275(2). Therefore, the Regulations also indirectly govern the eligibility of counterparties for stabilising trades: counterparties must fall within those categories for the exemption to be available.
Why Is This Legislation Important?
This Regulations is important because it demonstrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing manipulative or improper trading practices, and (2) allowing legitimate market stabilisation in connection with securities issuance. By exempting stabilising action from certain SFA provisions, the Regulations provide legal certainty to market participants that stabilisation—when conducted within strict boundaries—will not automatically be treated as unlawful market conduct.
For practitioners, the key significance lies in the precision of the exemption. It is not a blanket permission for any stabilisation activity. Instead, it is limited to a specific notes issuance, a specific stabilising actor, a specific timeframe, and specific counterparty categories. This precision reduces regulatory ambiguity but increases the compliance burden: firms must be able to show that each element of the exemption is satisfied.
From an enforcement and risk perspective, the exemption also highlights that stabilisation is closely monitored. If stabilising activity falls outside the exemption—such as trading outside the 30-day window, dealing with ineligible counterparties, or involving notes not covered by the definition—then the general prohibitions in sections 197 and 198 may apply. Legal counsel and compliance officers should therefore treat the exemption as a conditional safe harbour rather than a general authorisation.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 197, 198, 274, 275(2), and the regulation-making power under section 337(1)
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (as referenced in the legislation metadata)
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 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.