Statute Details
- Title: Securities and Futures (Market Conduct) (Exemptions) Regulations 2006
- Act Code: SFA2001-S148-2006
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Citation: S 148/2006
- Commencement: 6 March 2006 (as stated in regulation 1)
- Status: Current version (as at 27 Mar 2026)
- Key provisions (from extract): Regulations 1–5B; Schedule (Maximum Prices for Stabilising Action)
- Notable amendments (from timeline): S 426/2010; S 648/2018 (including changes to definitions and stabilising-action framework)
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemptions) Regulations 2006 (“Market Conduct (Exemptions) Regulations”) create targeted exemptions from certain market conduct rules under the Securities and Futures Act (the “SFA”). In broad terms, the Regulations recognise that certain trading activity around an offer—particularly “stabilising action”—may be permitted to support orderly price formation during the listing or offering process, provided strict conditions are met.
The Regulations focus on stabilising action taken by a “stabilising manager” (appointed by the issuer) and dealers acting on the stabilising manager’s behalf. Stabilising action is defined as buying, or offering or agreeing to buy, relevant specified products to stabilise or maintain market price. The exemption framework is designed to balance two competing policy goals: (i) preventing market manipulation and misleading price signals, and (ii) allowing limited, regulated intervention that can reduce volatility during new listings.
In addition to stabilising action, the Regulations provide an exemption in “bond dealings” (regulation 4) and carve out certain applications of specific SFA provisions relating to dealing restrictions and insider/connected-person scenarios (regulations 5, 5A and 5B). These exemptions are narrow and conditional, reflecting the SFA’s overarching objective of maintaining integrity in capital markets.
What Are the Key Provisions?
1. Citation, commencement, and definitions (regulations 1 and 2)
Regulation 1 sets the citation and commencement date: the Regulations come into operation on 6 March 2006. Regulation 2 then supplies key definitions that practitioners will rely on when assessing whether an exemption is available.
Several definitions are particularly important:
- “Offer” covers an offer for subscription or purchase of specified products in conjunction with listing on an approved exchange, and also offers where listing is on both an approved exchange and an overseas exchange.
- “Offer document” includes notices, circulars, advertisements and other public documents inviting applications or offers, and expressly includes prospectuses and profile statements (as defined in the SFA) and certain offer information statements.
- “Stabilising action” is the core concept: action taken in Singapore or elsewhere by a stabilising manager (or a dealer on its behalf) to buy or offer/agree to buy relevant specified products to stabilise or maintain market price.
- “Stabilising manager” must be appointed in writing by the issuer and the appointment must be notified to the approved exchange, with timing requirements depending on whether the stabilising action is under regulation 3A or 3B.
- “Dealer” is defined differently depending on whether stabilising action is undertaken in Singapore (requires a capital markets services licence to deal in capital markets products) or outside Singapore (requires licensing/approval/authorisation under foreign law).
2. Exemption where stabilising action relates to products not listed on an approved exchange (regulation 3)
Regulation 3 provides a straightforward exemption: sections 197, 198, 218(2) and 219(2) of the SFA do not apply to stabilising action taken in respect of an offer where the relevant specified products are not listed, and are not intended to be listed, on any approved exchange.
This is a threshold-based exemption. If the listing condition is absent (no listing on an approved exchange and none intended), the specified SFA market conduct provisions are disapplied for stabilising action in that scenario.
3. The main stabilising-action exemption for offers with listing on approved/overseas exchanges (regulation 3A)
Regulation 3A is the most operationally significant provision. It states that sections 197, 198, 218(2) and 219(2) of the SFA shall not apply to stabilising action referred to in paragraph (2) if and only if the stabilising manager and every dealer acting on its behalf comply with detailed conditions in paragraphs (3) to (15).
From the extract, regulation 3A(2) sets out conditions that must be satisfied for the offer to qualify. Key conditions include:
- Exchange venue: if the products are or will be listed on an approved exchange, stabilising action must be taken on that approved exchange; if listed on both an approved and an overseas exchange, stabilising action may be taken on either (or both) of those venues.
- Size threshold: the total value of the specified products based on the offer price must be at least $25 million (or equivalent in foreign currency).
- Debenture cap: where the products are debentures, the total nominal value of debentures the stabilising manager buys for stabilising action must not exceed 20% of the total nominal value of debentures offered prior to any over-allotment (if applicable).
- Non-debenture cap: where the products are not debentures, the total number of specified products bought for stabilising action must not exceed 20% of the total number offered prior to any over-allotment (if applicable).
- Disclosure in the offer document: the offer document must state that stabilising action may be taken, and (as the extract indicates) must also include further details such as the maximum period for stabilising action and likely other limits (the remainder of the provision is truncated in the extract, but the structure signals comprehensive disclosure requirements).
Practically, regulation 3A is a “compliance package”: the exemption is not automatic even if the offer meets the value and cap thresholds. The stabilising manager and dealers must also comply with the procedural and conduct conditions in paragraphs (3) to (15), which typically include timing, price limits, and reporting/notification obligations.
4. Exemption for stabilising action not taken on an approved exchange or overseas exchange (regulation 3B)
While the extract truncates the text of regulation 3B, its placement in the Regulations indicates a parallel exemption regime to regulation 3A. The purpose is to address stabilising action in circumstances where the stabilising action is not taken on an approved exchange or overseas exchange (or does not fit the regulation 3A venue conditions). Like regulation 3A, regulation 3B is conditional and is designed to ensure that any permitted stabilising conduct remains bounded, transparent, and consistent with market integrity.
For practitioners, the key takeaway is that the Regulations treat “where” stabilising action occurs as legally relevant. Venue determines which exemption regime applies and what compliance steps must be taken (including the timing of exchange notification of the stabilising manager’s appointment).
5. Exemption in bond dealings (regulation 4)
Regulation 4 provides that sections 197 and 198 of the SFA shall not apply to dealings in bonds entered into by a corporation. Although the extract does not reproduce the full text, the legal effect is clear: certain market conduct restrictions in the SFA are disapplied for specified bond dealings by corporate entities.
This kind of exemption is often relevant to corporate treasury operations, hedging, or other structured dealing activities. However, because the exemption is limited to “dealings in bonds entered into by a corpora” (as shown in the extract), counsel should confirm the exact statutory wording (including whether “corporation” is defined elsewhere and whether there are additional conditions not captured in the extract).
6. Exemptions from SFA dealing/insider provisions (regulations 5, 5A and 5B)
The Regulations also carve out specific applications of SFA provisions:
- Regulation 5: sections 218(2) and 219(2) do not apply in certain circumstances.
- Regulation 5A: section 218(3) does not apply to a person who is connected to a corporation and who… (the extract truncates the remainder, but the structure indicates a narrow connected-person exemption).
- Regulation 5B: section 219(3) does not apply to an insider mentioned in section 219(1(… (again, truncated), suggesting an insider-related exemption with defined conditions).
These provisions are important for compliance teams because they may determine whether a person’s trading activity is prohibited or restricted under the SFA’s market conduct and insider dealing framework. Even where an exemption exists, practitioners must verify the precise factual predicate: the person’s status (connected person/insider), the transaction type, and the circumstances contemplated by the Regulations.
7. Schedule: Maximum Prices for Stabilising Action
The Regulations include a Schedule setting out maximum prices for stabilising action. This is a critical safeguard: stabilising action must not be conducted in a way that artificially inflates prices beyond permitted levels. In practice, the Schedule functions as a quantitative constraint that stabilising managers and dealers must operationalise in their trading systems and documentation.
How Is This Legislation Structured?
The Regulations are structured as follows:
- Regulation 1: Citation and commencement.
- Regulation 2: Definitions (including stabilising action, stabilising manager, dealer, offer, offer document, and related concepts).
- Regulation 3: Exemption for stabilising action during an offer where relevant products are not listed (and not intended to be listed) on an approved exchange.
- Regulation 3A: Exemption for stabilising action taken on an approved exchange or overseas exchange, subject to strict conditions and compliance by stabilising manager and dealers.
- Regulation 3B: Exemption for stabilising action not taken on an approved exchange or overseas exchange (parallel conditional regime).
- Regulation 4: Exemption in bond dealings (disapplying sections 197 and 198 for specified corporate bond dealings).
- Regulations 5, 5A and 5B: Additional exemptions from specific SFA provisions relating to dealing restrictions and connected-person/insider scenarios.
- Regulation 6: Revocation.
- Regulation 7: Deleted.
- Schedule: Maximum prices for stabilising action.
Who Does This Legislation Apply To?
The Regulations primarily apply to market participants involved in securities offerings and trading around listings—especially issuers, stabilising managers, and dealers that undertake or facilitate stabilising action. The exemption is framed around who performs the stabilising action and where it is performed, and it requires that the stabilising manager’s appointment be properly notified to the relevant exchange.
Separately, the Regulations also apply to corporations engaging in certain bond dealings (regulation 4) and to persons whose trading may otherwise be caught by SFA provisions on dealing restrictions, including connected persons and insiders (regulations 5A and 5B). For these exemptions, eligibility depends on the person’s legal status and the transaction circumstances.
Why Is This Legislation Important?
For practitioners, the Regulations matter because stabilising action is a common feature of underwriting and distribution of securities, particularly in initial public offerings and other listing-related offers. Without a clear exemption, stabilising conduct could be treated as prohibited market conduct. The Regulations provide a structured pathway to permit stabilising activity while maintaining guardrails.
The most significant practical impact is that the exemption is conditional and document-driven. Counsel must ensure that the offer document contains the required disclosures, that the stabilising manager is properly appointed and notified, and that trading stays within quantitative limits (including the 20% caps and the Schedule’s maximum prices). Compliance failures can expose parties to regulatory action or civil consequences under the SFA framework.
Finally, the connected-person and insider exemptions (regulations 5A and 5B) can be decisive in advising whether a particular trade is lawful. Because these provisions are narrow and fact-specific, lawyers should treat them as targeted “risk filters” rather than broad permissions.
Related Legislation
- Securities and Futures Act (Cap. 289) (including sections 197, 198, 218, 219, and provisions referenced in the definitions)
- Futures Act
- Companies Act
- Bankruptcy Act
- Stabilising Act (as listed in the provided metadata)
- Legislation timeline / amendments (e.g., S 426/2010; S 648/2018)
Source Documents
This article provides an overview of the Securities and Futures (Market Conduct) (Exemptions) Regulations 2006 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.