Featured Product

    MAS Amends Notices on NSFR and Guide on Margin Rules for Derivatives

    April 08, 2020

    MAS published amendments to Notices 652 and 653 on net stable funding ratio (NSFR) requirements and NSFR disclosures, respectively. The amendments to Notices 652 and Notice 653 shall take effect on April 08, 2020. MAS also updated the guideline that set out on margin requirements for non-centrally cleared over-the-counter (OTC) derivatives contracts. These amendments are a result of the mitigation measures that were announced on April 07, 2020 to alleviate the impact of COVID-19 outbreak on the financial sector.

    Notice 652 sets out the minimum all currency NSFR requirements that a bank has to comply with while Notice 653 sets out requirements for a reporting bank to disclose quantitative and qualitative information about its NSFR. Both these notices apply to all domestic systemically important banks and internationally active banks. Notice 652 is being amended to lower the required stable funding factors for all loans to non-financial corporates, retail customers, and small business customers that have a residual maturity of less than six months, from 50% to 25%, for the period between April 08, 2020 and September 30,  2021 (both dates inclusive). The changes to the notice also involve gradually phasing back the required stable funding factors from 25% to 50% by April 01, 2022. The notice on NSFR disclosures (Notice 653) is being amended as a result of changes to the NSFR requirements. 

    The guideline on margin requirements offers guidance on scope of products and entities, margin calculations and methodologies, and eligible collateral and haircuts. Under the revised guideline, the phase-in date for the exchange of initial margin with the USD 80 billion threshold has been extended to September 01, 2021 while the phase-in date for the exchange of initial margin with the USD 13 billion threshold has been extended to September 01, 2022, for each subsequent twelve-month period. The guideline has been amended in line with the recently revised phase-in requirements of the Basel Committee. The Basel Committee has recently extended the timeline for these phase-in requirements in an effort to ease the burden on financial institutions in light of the COVID-19 outbreak.

     

    Effective Date: April 08, 2020 (Notices 652 and 653)

    Keywords: Asia Pacific, Singapore, Banking, Guidelines, OTC Derivatives, NSFR, MAS Notice 653, MAS Notice 652, Disclosures, Basel III, Liquidity Risk, Initial Margin, COVID-19, MAS

    Featured Experts
    Related Articles
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    EC to Defer Application of SFDR Standards Till July 2022

    The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.

    July 23, 2021 WebPage Regulatory News
    News

    EIOPA Consults on Reporting and Disclosures Under Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.

    July 23, 2021 WebPage Regulatory News
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7295