No. S 11
Securities and Futures Act
(Chapter 289)
Securities and Futures (Market Conduct) (Exemption for Stabilising Action in Respect of Dealings in Preference Shares) Regulations 2007
In exercise of the powers conferred by section 337(1) of the Securities and Futures Act, the Monetary Authority of Singapore hereby makes the following Regulations:
Citation and commencement
1.  These Regulations may be cited as the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Preference Shares) Regulations 2007 and shall come into operation on 12th January 2007.
Definitions
2.  In these Regulations, unless the context otherwise requires —
“closing date”, in relation to an offer, means the date of issue of the relevant preference shares;
“dealer” means a person who is the holder of a capital markets services licence to deal in securities and includes a person who is licensed, approved, authorised or otherwise regulated under the laws, codes or other requirements of any foreign jurisdiction in respect of dealing in securities;
“Euro Preference Shares” means the fixed to floating rate non-cumulative perpetual preferred securities issued in January 2007 by MUFG Capital Finance 4 Limited for a principal amount of up to EUR 1,000,000,000;
“issuer”, in relation to an offer, means the person who issues the relevant preference shares being offered;
“offer” means an offer for subscription or purchase of the relevant preference shares in conjunction with the listing of such relevant preference shares on a securities exchange;
“offer document” means any notice, circular, material, advertisement, publication or other document inviting offers to subscribe for or purchase the relevant preference shares in conjunction with the listing of such relevant preference shares on a securities exchange;
“offer price”, in relation to an offer, means the price of the relevant preference shares being offered after deducting any concession, commission, brokerage, transaction fee or levy;
“over-allotment”, in relation to an offer, means the allotment or sale of a number of the relevant preference shares in excess of the number of the relevant preference shares available for subscription or purchase under the offer;
“relevant preference shares” means the Euro Preference Shares or the Sterling Preference Shares, as the case may be;
“stabilising action” means an action taken in Singapore or elsewhere by the stabilising manager, or by a dealer on behalf of the stabilising manager, to buy, or to offer or agree to buy —
(a)any of the Euro Preference Shares in order to stabilise or maintain the market price of the Euro Preference Shares in Singapore or elsewhere; or
(b)any of the Sterling Preference Shares in order to stabilise or maintain the market price of the Sterling Preference Shares in Singapore or elsewhere;
“stabilising manager” means Mitsubishi UFJ Securities International plc or any of its related corporations;
“Sterling Preference Shares” means the fixed to floating rate non-cumulative perpetual preferred securities issued in January 2007 by MUFG Capital Finance 5 Limited for a principal amount of up to £700,000,000.
Exemption
3.—(1)  Sections 197, 198, 218(2) and 219(2) of the Act shall not apply to any stabilising action taken in respect of the relevant preference shares described in paragraph (2) and which is undertaken by the stabilising manager, or by a dealer on behalf of the stabilising manager, subject to paragraphs (3) to (14) being complied with.
(2)  For the purposes of paragraph (1), the stabilising action taken shall be in respect of an offer of the relevant preference shares where —
(a)the total value of the relevant preference shares being offered, calculated based on the offer price, is not less than $25 million (or its equivalent in a foreign currency);
(b)the total number of the relevant preference shares that the stabilising manager buys to undertake stabilising action does not exceed 20% of the total number of the relevant preference shares being offered prior to any over-allotment, if applicable;
(c)the offer document states —
(i)that stabilising action may be taken in respect of the relevant preference shares;
(ii)the maximum period during which stabilising action may be taken;
(iii)the total number of the relevant preference shares which are the subject of an over-allotment option, if applicable; and
(iv)the total number of the relevant preference shares that the stabilising manager may buy to undertake the stabilising action, which shall not exceed the number prescribed in sub-paragraph (b);
(d)a public announcement has been made, through the securities exchange on which the relevant preference shares are or are intended to be listed, on the business day of that securities exchange immediately following the closing date of the offer, stating —
(i)that stabilising action may be taken in respect of the relevant preference shares;
(ii)the maximum period during which stabilising action may be taken;
(iii)the total number of the relevant preference shares which are the subject of an over-allotment option, if applicable; and
(iv)the total number of the relevant preference shares that the stabilising manager may buy to undertake the stabilising action, which shall not exceed the number prescribed in sub-paragraph (b); and
(e)the offer is on cash terms and is to be, is or has been, made at a specific price payable in any currency.
(3)  The stabilising manager shall —
(a)take stabilising action only after he is reasonably satisfied that the price of the relevant preference shares is not false or misleading; and
(b)continue with the stabilising action only after he is reasonably satisfied that the price of the relevant preference shares has not become false or misleading other than by reason of any stabilising action.
(4)  No stabilising action shall be taken before the date on which the earliest public announcement of the offer which states the offer price is made through the securities exchange on which the relevant preference shares are or are intended to be listed.
(5)  No stabilising action shall be taken after the earlier of the following dates:
(a)the date of expiry of the period of 30 calendar days from the date of commencement of trading in the relevant preference shares being offered on the securities exchange, or the date of expiry of the period of 60 calendar days from the date on which the earliest public announcement of the offer which states the offer price is made through the securities exchange on which the relevant preference shares are or are intended to be listed, whichever is the earlier;
(b)the date on which the stabilising manager has bought, whether on the securities exchange or otherwise, the total number of the relevant preference shares that the stabilising manager may buy to undertake the stabilising action as stated in the offer document under paragraph (2)(c).
(6)  Subject to paragraph (7), the stabilising manager shall not effect or cause to be effected, directly or indirectly, any sell order of the relevant preference shares prior to the date of commencement of each stabilising action or during the period in which stabilising action is permitted under this regulation.
(7)  Nothing in paragraph (6) shall prohibit —
(a)the stabilising manager; or
(b)an associate of the stabilising manager, in the associate’s capacity as a dealer,
from —
(i)executing any sell order of the relevant preference shares for a person who is not an associate of the issuer of the offer of the relevant preference shares; or
(ii)selling the relevant preference shares on behalf of the issuer as part of the offer (including pursuant to any underwriting commitment).
(8)  The stabilising manager shall —
(a)keep a register in such form as the securities exchange on which the relevant preference shares are listed may require; and
(b)record in the register the particulars of each transaction to buy the relevant preference shares entered into in connection with the stabilising action, including the price, quantity and name of the dealer, before the end of the day on which the transaction is entered into.
(9)  Where the register referred to in paragraph (8) is kept in Singapore, it shall be made available by the stabilising manager for inspection by the Authority, or the securities exchange on which the relevant preference shares are listed, within such time as may be stipulated by the Authority or that securities exchange, as the case may be.
(10)  Where the register referred to in paragraph (8) is kept outside Singapore —
(a)it shall be capable of being brought into Singapore and made available by the stabilising manager for inspection by the Authority, or the securities exchange on which the relevant preference shares are listed, within such time as may be stipulated by the Authority or that securities exchange, as the case may be; or
(b)if it is not capable of being brought into Singapore, a copy of the register certified to be a true copy by the stabilising manager shall be brought into Singapore and made available by the stabilising manager for inspection by the Authority, or the securities exchange on which the relevant preference shares are listed, within such time as may be stipulated by the Authority or that securities exchange, as the case may be.
(11)  The stabilising manager shall —
(a)before the closing date of the offer of the relevant preference shares, inform the securities exchange on which the relevant preference shares are or are intended to be listed of the name of any dealer, whether in Singapore or elsewhere, appointed by the stabilising manager to take the stabilising action; and
(b)inform that securities exchange of any subsequent change of dealer immediately upon such change.
(12)  The stabilising manager shall make a public announcement through the securities exchange on which the relevant preference shares are listed of the cessation of any stabilising action, whether in Singapore or elsewhere, no later than the start of the trading day of that securities exchange immediately following the day of cessation of the stabilising action.
(13)  No stabilising action in respect of an offer shall be taken after the public announcement of the cessation referred to in paragraph (12).
(14)  For the purposes of this regulation, whether a person is an associate of another person shall be ascertained in accordance with section 4(6) of the Act.
Made this 11th day of January 2007.
HENG SWEE KEAT
Managing Director,
Monetary Authority of Singapore.
[SFD ENFD 012/2002 Pt. 28; AG/LEG/SL/289/2005/1 Vol. 11]
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