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)
- Enacting Power: Powers conferred by section 337(1) of the Securities and Futures Act
- Commencement: 23 February 2006
- Regulatory Instrument Number: SL 105/2006
- Status (as provided): Current version as at 27 March 2026
- 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 2006 (“Stabilising Action Exemption Regulations”) creates a targeted exemption from certain market conduct rules in the Securities and Futures Act (“SFA”) for stabilising activities carried out in relation to a specific issuance of notes.
In plain language, the Regulations recognise that, in some bond/notes markets, market participants may take limited steps shortly after issuance to help stabilise trading conditions—often to reduce volatility and support orderly price formation. However, stabilising conduct can resemble prohibited market manipulation if it is not carefully bounded. The Regulations therefore carve out a narrow permission: stabilising action is allowed for a defined class of notes, within a defined time window, and only when undertaken by specified categories of persons and under specified conditions.
Importantly, this is not a general “free pass” for stabilisation. It is a bespoke exemption tied to a particular instrument: 7-year Euro floating rate notes due February 2013 issued by the Export-Import Bank of Korea, up to EURO 325 million. The exemption is also time-limited (within 30 days from the date of issue) and person-limited (institutional investors, certain “relevant persons”, and principal acquirers meeting a minimum consideration threshold).
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and confirms that they came into operation on 23 February 2006. For practitioners, this matters when assessing whether stabilising conduct occurred within the legal framework of the exemption.
Section 2 (Definitions) sets the scope and meaning of key terms. The definitions are central because the exemption in Section 3 depends entirely on whether the conduct falls within these defined boundaries.
First, “Notes” is defined very specifically 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. This means the exemption cannot be invoked for other notes, even if they are similar in nature or issued by the same issuer.
Second, “stabilising action” is defined as an action taken in Singapore or elsewhere by Deutsche Bank AG, London Branch (and 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 notable for several reasons:
- It identifies the stabilising actor(s): Deutsche Bank AG, London Branch and its related corporations.
- It includes not only actual purchases but also offers or agreements to buy, which can capture conduct that is preparatory or contractual in nature.
- It is purpose-driven: the action must be taken to stabilise or maintain market price. A different commercial purpose would likely fall outside the definition.
- It has a geographic element: the action may be taken in Singapore or elsewhere, but the stabilisation objective is linked to the market price in Singapore or elsewhere.
Third, the Regulations incorporate by reference the SFA meaning of “securities” (section 239(1) of the Act) and define “relevant person” by reference to section 275(2) of the Act (used in Section 3).
Section 3 (Exemption) is the operative provision. It states that Sections 197 and 198 of the SFA shall not apply to any stabilising action taken in respect of the Notes within 30 days from the date of issue, provided the stabilising action is taken with respect to any of the following categories of persons:
- (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, where 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 key legal effect is that the stabilising action—if it satisfies the defined conditions—will be exempt from the application of the SFA’s market conduct provisions in Sections 197 and 198. While the extract does not reproduce those sections, the practical takeaway is that the exemption is designed to prevent stabilising purchases (or offers/agreements to buy) from being treated as unlawful market conduct, provided they are conducted within the permitted parameters.
Several practical constraints should be highlighted:
- Time limit: the stabilising action must occur within 30 days from the date of issue. Conduct outside that window would not benefit from this exemption.
- Instrument specificity: only the defined “Notes” are covered.
- Actor specificity: stabilising action must be taken by Deutsche Bank AG, London Branch or its related corporations (as per the definition).
- Counterparty/person categories: stabilising action must relate to transactions with the specified categories (institutional investor, relevant person, or principal acquirer meeting the minimum consideration threshold).
- Minimum consideration threshold: for principal acquirers, the exemption requires consideration of at least $200,000 per transaction (or equivalent), and it expressly includes payment by exchange of securities or other assets, not only cash.
How Is This Legislation Structured?
The Regulations are short and structured as a typical Singapore subsidiary instrument with a small number of provisions:
- Section 1 sets out the citation and commencement.
- Section 2 provides definitions that determine the scope of the exemption, including the precise description of the Notes and the meaning of stabilising action.
- Section 3 contains the exemption from specified SFA provisions (Sections 197 and 198), including the 30-day time limit and the categories of persons for which the exemption applies.
There are no additional parts or complex schedules in the extract provided; the legal work is largely done through the defined terms and the single operative exemption clause.
Who Does This Legislation Apply To?
Although the exemption is framed as a modification to the application of the SFA, it is practically relevant to parties involved in the issuance and early trading of the specified Notes. The Regulations apply to stabilising action taken by Deutsche Bank AG, London Branch and its related corporations, because the definition of “stabilising action” is actor-specific.
In addition, the exemption is conditional on the counterparty category involved in the stabilising transactions: institutional investors, “relevant persons” (as defined in the SFA), or principal acquirers meeting the $200,000 per transaction minimum consideration threshold. Accordingly, the exemption is not merely about who performs the stabilising action; it is also about who the stabilising action is directed at (or who acquires the Notes in the relevant transactions).
Why Is This Legislation Important?
This Regulations is important because it illustrates how Singapore’s market conduct framework balances two competing objectives: (1) preventing manipulation and improper trading practices, and (2) allowing legitimate market stabilisation practices that are common in certain debt capital markets.
From an enforcement and compliance perspective, the exemption reduces legal uncertainty for stabilising activities that are structured to be limited, time-bound, and counterparty-restricted. Without such an exemption, stabilising purchases or contractual commitments to buy could risk being characterised as conduct prohibited under the SFA’s market conduct provisions. By carving out stabilising action within 30 days and for specified counterparties, the Regulations provide a clearer compliance pathway.
For practitioners advising issuers, arrangers, dealers, or institutional counterparties, the Regulations also serve as a reminder that exemptions in Singapore are often narrowly drafted and fact-specific. A careful legal review is required to confirm: (i) the instrument is the correct “Notes”; (ii) the stabilising actor is within the defined group; (iii) the action is taken within the 30-day window; and (iv) the counterparty fits one of the enumerated categories, including the minimum consideration requirement for principal acquirers.
Related Legislation
- Securities and Futures Act (Cap. 289) — including Sections 197, 198, 239(1), 275(2), and the regulation-making power in Section 337(1)
- Futures Act (referenced in metadata)
- Stabilising Act (referenced in metadata)
- Timeline (legislation timeline reference)
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.