October 2021 – The End of Part 1 for MAS

October 2021 - The End of Part 1 for MAS

On 1 October 2021 the Monetary Authority of Singapore (MAS) implements the final phase of the reporting of OTC derivatives that it began in 2014. The Singapore regulator has extended the reach of its reporting obligations incrementally based on asset class, the type and size of the firm, and whether the OTC contracts were booked or traded in Singapore.

The upcoming October milestone sees the reporting of FX, equity and commodity contracts which began for the banks years earlier (2015 for FX and 2018 for EQ & CO) extended to other firm types. Essentially the buy-side is now obligated to report these three asset classes and this completes the rollout of the reporting rules as legislated in the Securities And Futures (Reporting Of Derivatives Contracts) 2013 Act.

Proceed with caution

The 2021 deadline was delayed a year due to the Covid-19 pandemic and marks the end of the line for the original reporting requirements after a series of consultations with the industry and a determinedly collaborative approach with MAS peers including ESMA and ASIC. However if the recent 5 July 2021 consultation is any indicator, the Singapore regulator is far from ready to rest on its laurels.

Slicing and dicing

Some regulators rolled out their reporting obligations incrementally based on factors like report type. For example ESMA staggered collateral and valuation reporting to commence six months after the transaction reporting began. In Singapore MAS has taken a far more granular approach and staggered the start dates based on four different criteria:

  • Asset class: credit, interest rate, FX, equity & commodity
  • Firm type:
    • banks and merchant banks licensed in Singapore
    • finance company licensed in Singapore
    • subsidiary of a bank incorporated in Singapore
    • insurers licensed in Singapore
    • holders of a capital markets services (CMS) licence
    • significant derivatives holders
  • Activity type: whether the OTC was ‘booked’ or ‘traded’ in Singapore
  • The groups of fields to be reported:
    • Main transaction and counterparty details
    • Additional transaction details
    • Trader and booking location details.

Additionally the insurers, bank subsidiaries and holders of CMS licenses are subject to a threshold and need to trade over S$5 billion annual aggregate gross notional amount of specified derivatives.

Stepping stones

  • April 2014 saw reporting begin for credit & interest rate contracts booked in Singapore, with banks and merchant banks licensed in Singapore being the first firm types obligated to report.Credit and interest rate reporting was quickly extended to other firms including bank subsidiaries, insurers, finance companies in July 2014, and significant holders of derivatives in October 2014.
  • May 2015 saw the banks and merchant banks begin reporting FX derivatives booked in Singapore
  • November 2015 was a busy month as the reporting obligation for the banks was expanded to include FX, credit and interest rates traded in Singapore
  • October 2018 saw the banks being asked to start reporting equity and commodity contracts booked or traded in Singapore
  • October 2020 was originally scheduled to extend the reporting of FX, equity and commodities begin for the other firms types (bank subsidiaries, insurers, finance companies etc.) but this was delayed a year due to the impact of the global pandemic
  • October 2021 therefore sees the completion of the journey with all Singapore firm types reporting all five asset classes, all fields and all trading/booking activities.

Further over the horizon

Seven and a half years of reporting implementations isn’t the end of the story by any means. Like many of its G20 counterparts, MAS has been closely following developments elsewhere and heavily engaged with harmonisation efforts such as CDE. And like its peers at the CFTC, ASIC, HKMA, ESMA and the JFSA, the Singapore regulator will be implementing its own rewrite of the reporting rules. As mentioned earlier in this piece the consultation processes are underway in Singapore and we will share our observations as this process evolves.

Is your MAS Reporting accurate and complete? Can you evidence this? If you are a buy-side firm preparing to report for the first time, we can help.  Contact us for a complementary consultation with one of our regulatory experts and find out how you can stay on the right side of the Singapore regulator.