MAS published a response to the feedback received on draft regulations for mandatory clearing of derivatives contracts. MAS will require over-the-counter (OTC) derivatives to be cleared on central counterparties (CCPs) with effect from October 01, 2018. Central clearing will make the trading of OTC derivatives in Singapore safer, as it mitigates counterparty credit risks inherent in these trades.
The mandatory clearing requirement will apply to Singapore-Dollar and US-Dollar fixed-floating interest rate swaps, as these are the most widely traded interest rate derivatives in Singapore. Banks whose gross notional outstanding OTC derivatives exceed USD 20 billion will be required to clear their trades through CCPs that are regulated by MAS. These banks account for over 90% of OTC derivatives contracts (in terms of outstanding notional amount) in Singapore. The central clearing requirements will be effected through the Securities and Futures (Clearing of Derivatives Contracts) Regulations.
MAS had proposed the regulation for mandatory clearing of OTC derivatives in July 2015. The draft Securities and Futures (Clearing of Derivatives Contracts) Regulations sets out the implementation details on the set of products and persons subject to the clearing obligations under the Securities and Futures Act (Cap. 289). The list of respondents to the consultation is in Annex A and the full submissions are in Annex B and Annex C.
Effective Date: October 01, 2018
Keywords: Asia Pacific, Singapore, OTC Derivatives, CCPs, CCR, Securities, Clearing, MAS
Previous ArticleBoE Governor Speaks on the Need to Regulate Crypto Assets
Next ArticleEBA Publishes Detailed Work Program for 2019
EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.
In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.
IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.
FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.
EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.
FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.
RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.
The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.
HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.
ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).