Also known as stabilisation. The process whereby the market price of a security is manipulated in order to achieve a successful offer. The manipulation of the market price is for the limited purpose of preventing or slowing down a decline in the price of the security. It is done, broadly, by one of the bookrunners in respect of a new issue of shares or bonds (commonly called the stabilising manager) buying and selling the securities in the open market. Stabilisation creates the impression that there is demand for the securities at a particular price or at various prices.

For the purposes of the market abuse regime, stabilisation means a purchase or offer to purchase securities, or a transaction in associated instruments equivalent thereto, which is undertaken by a credit institution or an investment firm in the context of a significant distribution of such securities exclusively for supporting the market practice of those securities for a predetermined period of time, due to a selling pressure in such securities (Article 3(2)(d), UK Market Abuse Regulation).

For further information, see Practice note, Stabilisation.