EC and MAS announced a common approach for EU and Singapore derivatives trading venues to support the G20 reforms for standardized derivatives to be traded on trading platforms. The common approach is intended to facilitate the ability of the EU financial counterparties to comply with the EU derivatives trading obligation under Article 28 of the Markets in Financial Instruments Regulation (MiFIR) by executing swap transactions on organized markets authorized in Singapore. Likewise, Singapore counterparties can engage with EU counterparts on the Multilateral Trading Facilities (MTF) or Organized Trading Facilities (OTF) of EU in compliance with the derivatives trading obligation of Singapore.
The EC Vice-President Valdis Dombrovskis intends to propose that EC adopt an equivalence decision to recognize a list of organized markets in Singapore, which are operated by an approved exchange or a recognized market operator, as platforms eligible for the execution of derivatives subject to EU "on-venue" trading obligation, provided the requirements of MiFIR are met. Before EC can adopt an equivalence decision, member state authorities must vote in favor of the draft decision in the European Securities Committee. MAS intends to propose the adoption of regulations to exempt EU MTFs and OTFs from the requirement to be an approved exchange or a recognized market operator under section 7(1) of the Securities and Futures Act (SFA). The same list of EU MTFs and OTFs will also be prescribed under section 129J(1)(a) of the SFA as facilities that can be used to satisfy the trading obligations of Singapore. The list of venues covered by the MAS exemptions and by EC equivalence decision may be amended or updated, depending on changes or developments in the markets, including future authorization of trading venues on both sides.
MAS and EC services intend to work together to ensure that the common approach is put in place and followed in a coordinated manner. The authorities will continuously monitor the impact of this to assess whether any further action is appropriate. MAS expects to notify the Commission services of its list of eligible approved exchange and recognized market operator while the Commission services expect to notify MAS of its list of trading venues under MiFIR, eligible for exemption and prescription by MAS.
Related Link: EU and MAS Joint Statement
Keywords: Asia Pacific, Europe, EU, Singapore, Banking, Securities, Derivatives Trading, MiFIR, MAS, EC
Previous ArticleEIOPA Issues Recommendations for Insurers in Light of No-Deal Brexit
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.