Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Preference Shares) (No. 2) Regulations 2008
- Act Code: SFA2001-S359-2008
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Citation and commencement: Commenced on 11 July 2008
- Key provisions (from extract): Section 2 (Definitions); Section 3 (Exemption)
- Status: Current version as at 27 March 2026
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Preference Shares) (No. 2) Regulations 2008 (“Stabilising Action (No. 2) Regulations”) creates a targeted exemption from certain market conduct rules in the Securities and Futures Act (SFA). In plain terms, it allows a stabilising manager (and, in limited circumstances, dealers acting for that manager) to take “stabilising action” in relation to a specific type of preference share offering—without triggering the prohibitions that would otherwise apply.
Stabilising action is a common feature of securities offerings. It generally refers to buying (or offering to buy) securities in the market to help stabilise or maintain the trading price after an offer. However, because stabilisation can affect price discovery and may create risks of misleading the market, the SFA contains market conduct provisions that restrict certain trading behaviours. This subsidiary legislation carves out an exemption, but only if strict conditions are met.
Importantly, the regulations are not a general “free pass” for any stabilisation activity. They are tightly defined by reference to the specific preference shares, the stabilising manager, the size of the offer, the maximum stabilising purchases, disclosure requirements, timing limits, and recordkeeping/inspection obligations.
What Are the Key Provisions?
1. Definitions (Section 2). The regulations define key terms that determine when the exemption applies. Several definitions are particularly practical for counsel advising on compliance:
“stabilising action” means actions taken in Singapore or elsewhere by the stabilising manager (or a dealer on its behalf) to buy, or offer or agree to buy, preference shares in order to stabilise or maintain the market price of the preference shares in Singapore or elsewhere.
“stabilising manager” is identified as Goldman Sachs International or any of its related corporations.
“preference shares” are defined very specifically as Series B non-cumulative perpetual preferred securities issued in July 2008 by SMFG Preferred Capital USD 3 Limited for a principal amount of up to US$3,000,000,000.
“offer” and “offer document” are also defined by reference to an offer for subscription or purchase made in conjunction with listing on a securities exchange.
2. The exemption from specified SFA provisions (Section 3(1)). The core operative clause provides that Sections 197, 198, 218(2) and 219(2) of the SFA shall not apply to stabilising action taken in respect of the defined preference share offer, provided the conditions in paragraphs (3) to (14) are complied with.
While the extract does not reproduce the text of the referenced SFA sections, the legal effect is clear: certain market conduct restrictions are suspended for stabilising activity, but only within the regulatory “box” created by the conditions. For practitioners, this means the exemption is conditional—failure to comply with any condition may expose the stabilising manager and/or dealers to liability under the otherwise applicable SFA provisions.
3. Threshold and eligibility conditions (Section 3(2)). The exemption applies only where the stabilising action is in respect of an offer meeting specific quantitative and disclosure requirements. Key conditions include:
(a) Offer size threshold: the total value of the preference shares being offered (based on the offer price) must be not less than S$25 million (or equivalent).
(b) Maximum stabilising purchases: the stabilising manager’s purchases for stabilising action must not exceed 20% of the total number of preference shares offered prior to any over-allotment (if applicable).
(c) Offer document disclosure: the offer document must state (i) that stabilising action may be taken; (ii) the maximum period during which it may be taken; (iii) the number of preference shares subject to any over-allotment option; and (iv) the maximum number the stabilising manager may buy (capped by the 20% limit).
(d) Public announcement disclosure: a public announcement must be made through the relevant securities exchange on the business day immediately following the closing date of the offer, containing the same categories of information as in the offer document.
(e) Cash terms and fixed price: the offer must be on cash terms and made at a specific price payable in any currency.
4. Price integrity and timing controls (Sections 3(3)–(5)). The regulations impose “market integrity” constraints:
(3)(a) requires the stabilising manager to take stabilising action only after being reasonably satisfied that the price is not false or misleading.
(3)(b) requires the stabilising manager to continue only if reasonably satisfied that the price has not become false or misleading, except where the misleading character arises by reason of stabilising action itself.
(4) prohibits stabilising action before the date of the earliest public announcement of the offer that states the offer price through the securities exchange.
(5) imposes an outer limit: stabilising action must not be taken after the earlier of (i) the expiry of 30 calendar days from commencement of trading on the exchange, or 60 calendar days from the earliest public announcement stating the offer price (whichever is earlier); or (ii) the date when the stabilising manager has bought the maximum number of preference shares permitted under the offer document.
5. Trading restrictions and permitted exceptions (Sections 3(6)–(7)). The regulations restrict sell-side activity to reduce the risk of manipulative trading:
(6) provides that the stabilising manager must not effect or cause to be effected any sell order of the preference shares prior to the date of commencement of each stabilising action or during the period when stabilising action is permitted.
(7) then clarifies exceptions: it does not prohibit the stabilising manager (or an associate of the stabilising manager acting as a dealer) from executing sell orders for persons who are not associates of the issuer, or from selling preference shares on behalf of the issuer as part of the offer (including pursuant to underwriting commitments).
For counsel, this is a critical compliance point: it draws a line between stabilisation buying and prohibited sell-order behaviour, while still allowing ordinary client dealing and underwriting-related sales.
6. Recordkeeping and inspection (Sections 3(8)–(10) and beyond). The regulations require robust documentation of stabilising transactions:
(8) obliges the stabilising manager to keep a register (in the form required by the listing exchange) and to record particulars of each transaction to buy preference shares connected with stabilising action, including price, quantity, and name of the dealer, before the end of the day of the transaction.
(9) provides that if the register is kept in Singapore, it must be made available for inspection by the Authority (MAS) or the securities exchange within the time stipulated.
(10) addresses registers kept outside Singapore, requiring capability to be brought into Singapore and made available for inspection within stipulated time, or alternative arrangements if not capable (the extract truncates the remainder, but the direction is clear: inspection must be feasible).
Even where the extract truncates later paragraphs, the structure indicates that the regulations continue with operational compliance requirements—likely including additional recordkeeping, reporting, and/or further constraints on stabilising conduct.
How Is This Legislation Structured?
The Regulations are short and focused. Based on the enacting formula and the extract, the document comprises:
Section 1 (Citation and commencement) — sets the name and commencement date (11 July 2008).
Section 2 (Definitions) — defines terms such as “stabilising action”, “stabilising manager”, “offer”, “offer document”, “offer price”, “over-allotment”, and the specific “preference shares”.
Section 3 (Exemption) — the operative provision. It states the SFA sections that are disapplied, then sets out conditions (paragraphs (2) to (14)) governing when stabilising action is permitted, including eligibility thresholds, disclosure, timing, trading restrictions, and recordkeeping/inspection.
Who Does This Legislation Apply To?
The exemption applies to stabilising action taken in respect of the defined preference share offering, but only when undertaken by the stabilising manager (Goldman Sachs International or related corporations) or by a dealer on behalf of the stabilising manager. The definition of “dealer” is broad and includes persons licensed or regulated in Singapore or foreign jurisdictions to deal in securities.
Practically, the regulations are aimed at the parties involved in the stabilisation process: the stabilising manager, its related corporations, and dealers executing transactions for stabilisation purposes. The disclosure and announcement obligations also implicate the issuer and the offering team, because the offer document and exchange announcements must contain specified stabilisation information for the exemption to be available.
Why Is This Legislation Important?
This subsidiary legislation is important because it operationalises a balance between two competing regulatory goals: (1) allowing stabilisation to support orderly trading after an offering, and (2) preventing stabilisation from undermining market integrity or misleading investors. By disapplying specified SFA provisions only when detailed conditions are satisfied, the Regulations create a controlled pathway for stabilising activity.
For practitioners, the key significance lies in the conditional nature of the exemption. Compliance is not optional. The offer size threshold, the 20% cap on stabilising purchases, mandatory disclosure in the offer document and exchange announcements, strict timing limits, and prohibitions on sell orders during stabilisation are all elements that must be evidenced and monitored. In enforcement or dispute scenarios, regulators and exchanges will typically focus on whether the stabilising manager could demonstrate compliance with each condition.
Finally, the recordkeeping and inspection requirements underscore that stabilisation is a regulated activity subject to post-trade scrutiny. Counsel advising on stabilisation programmes should ensure that transaction capture, register maintenance, and inspection readiness are built into the trading workflow from day one.
Related Legislation
- Securities and Futures Act (Cap. 289) — including the market conduct provisions referenced in Section 3(1) (Sections 197, 198, 218(2), 219(2)) and the stabilising framework under the Act.
- Futures Act — referenced in the statute metadata timeline context (relevant where market conduct concepts intersect across regimes).
- Stabilising Act — referenced in the statute metadata (contextual for stabilisation concepts, though the operative instrument here is the SFA subsidiary regulation).
- Timeline / Legislation history materials — for confirming the correct version and amendments (as indicated by the legislation platform metadata).
Source Documents
This article provides an overview of the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Preference Shares) (No. 2) Regulations 2008 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.