Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 9) Regulations 2006
- Act Code: SFA2001-S105-2006
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) (“SFA”)
- Authorising Power: Section 337(1) of the SFA
- Citation: SL 105/2006
- Commencement: 23 February 2006
- Status: Current version as at 27 March 2026 (per provided extract)
- Key Sections: Section 2 (Definitions); Section 3 (Exemption); Section 1 (Citation and commencement)
- Regulatory Authority: Monetary Authority of Singapore (“MAS”)
- Document Date / Made By: Made 20 February 2006 by Heng Swee Keat (Managing Director, MAS)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 9) Regulations 2006 is a targeted regulatory instrument that creates a specific exemption from certain market conduct rules under the Securities and Futures Act (SFA). In practical terms, it allows specified parties to take “stabilising action” in relation to a particular set of debt securities (the “Notes”) without breaching the general prohibitions that would otherwise apply.
Stabilising action is a well-known feature of securities markets, particularly in connection with new issuances. When a bond or note is first issued, trading can be thin and price volatility can be high. Market participants may therefore take limited steps—such as buying or offering to buy—to help stabilise or maintain the market price of the newly issued instrument. However, stabilisation can also raise concerns about market manipulation. The SFA therefore contains provisions designed to prevent improper conduct, including restrictions that can capture stabilisation activity.
This set of Regulations addresses that tension by carving out an exemption for stabilising action in respect of a defined issuance: 7-year Euro floating rate notes due February 2013 issued by The Export-Import Bank of Korea, up to a specified principal amount. The exemption is time-limited (within 30 days from the date of issue) and conditional (limited to certain categories of counterparties and minimum consideration thresholds). The Regulations thus provide legal certainty for stabilisation activities that are consistent with the intended market practice.
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides the short title of the Regulations and states that they come into operation on 23 February 2006. For practitioners, this matters mainly for determining whether stabilising conduct occurred within the regulatory framework and for aligning compliance timelines with the issuance date and the 30-day exemption window.
Section 2 (Definitions) is the core interpretive section. It defines three key terms that determine the scope of the exemption:
- “Notes” are precisely identified as the 7-year Euro floating rate notes due February 2013 issued by The Export-Import Bank of Korea for a principal amount of up to EURO 325 million.
- “securities” is defined by reference to section 239(1) of the SFA, ensuring that the term is aligned with the SFA’s general definitional framework.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by Deutsche Bank AG, London 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.
This definition is significant because it narrows the exemption to stabilisation activity by a specific stabilising entity (Deutsche Bank AG, London Branch) and its related corporations. It also clarifies that the conduct must be directed at stabilising or maintaining market price, rather than being incidental or unrelated trading.
Section 3 (Exemption) 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, within 30 days from the date of issue, with respect to stabilising action undertaken with certain categories of counterparties or acquisition structures.
Although the extract does not reproduce the text of sections 197 and 198, the legal effect is clear: those SFA provisions would otherwise restrict or prohibit certain market conduct. The Regulations remove that restriction for the specified stabilisation activity, but only within the defined parameters.
The exemption is further conditioned by the “with –– (a) … (b) … (c) …” structure. Stabilising action must be taken in circumstances involving one of the following:
- (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, provided that the consideration for the acquisition 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.
For practitioners, the practical compliance takeaway is that stabilisation is not a blanket permission. It is permission only when the stabilising purchases (or offers/agreements to buy) are made in qualifying counterpart arrangements. The minimum consideration threshold in paragraph (c) is particularly important for structuring and documentation: it sets a quantitative floor that must be satisfied per transaction, and it applies regardless of whether consideration is paid in cash or via securities/asset exchange.
Finally, the Regulations specify the temporal limitation: the stabilising action must occur within 30 days from the date of issue. This is a common feature of stabilisation regimes—designed to allow short-term price support while limiting the risk of longer-term market distortion.
How Is This Legislation Structured?
The Regulations are concise and consist of a small number of provisions:
- Section 1: Citation and commencement (when the Regulations take effect).
- Section 2: Definitions (defining “Notes”, “securities”, and “stabilising action”).
- Section 3: Exemption (the operative carve-out from SFA sections 197 and 198, subject to time, entity, and counterparty/consideration conditions).
From a practitioner’s perspective, the structure is designed for quick application: once the issuance and stabilising entity are identified, the exemption turns on whether the stabilisation occurs within the 30-day window and whether the transactions fall within the qualifying categories in section 3.
Who Does This Legislation Apply To?
The exemption is directed at stabilising action undertaken by Deutsche Bank AG, London Branch or its related corporations. Therefore, the primary regulated “doers” are the stabilising entities conducting the relevant buy (or offer/agree to buy) activity in relation to the specified Notes.
However, the exemption also depends on the counterparty context of the stabilising transactions. Section 3 requires that stabilising action be taken with (i) an institutional investor, (ii) a relevant person (as defined in the SFA), or (iii) a principal acquirer meeting the minimum consideration threshold. Accordingly, while the stabiliser is the entity performing the action, the exemption’s availability is affected by how the stabiliser’s trades are structured and with whom the stabiliser trades.
Why Is This Legislation Important?
This Regulations matters because it provides a legally recognised pathway for market stabilisation in Singapore for a specific bond issuance. Without such an exemption, stabilising purchases or offers to buy could potentially be captured by the SFA’s market conduct prohibitions, exposing the stabilising entity and related parties to regulatory risk.
For issuers, arrangers, and stabilisation agents, the exemption offers certainty that stabilisation activity—if conducted within the defined scope—will not be treated as contravening the specified SFA provisions. This is particularly important in cross-border transactions where stabilisation may occur both in Singapore and elsewhere, and where compliance teams must align trading activity with local legal requirements.
From an enforcement and risk-management perspective, the conditional nature of the exemption is equally important. The exemption is limited by: (1) the identity of the Notes; (2) the identity of the stabilising entity; (3) the time window (30 days from issue); and (4) the counterparty/consideration conditions. These limitations reflect the policy objective of permitting legitimate stabilisation while constraining the conduct that could otherwise be used to influence prices improperly.
In practice, lawyers advising on stabilisation programmes should treat this Regulations as a checklist instrument. Compliance should confirm that the Notes match the defined issuance, that the stabilising activity is performed by the specified entity or related corporations, that trades occur within the 30-day period, and that counterparties and transaction values satisfy the section 3 conditions. Documentation should be sufficient to demonstrate compliance with each element—particularly the minimum consideration threshold for principal acquisitions under section 3(c).
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular:
- Section 197 (market conduct provision exempted by section 3 of these Regulations)
- Section 198 (market conduct provision exempted by section 3 of these Regulations)
- Section 239(1) (definition of “securities”)
- Section 275(2) (definition of “relevant person”)
- Section 337(1) (power enabling MAS to make these Regulations)
- Stabilising Act (as referenced in the provided metadata)
- Futures Act (as referenced in the provided 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 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.