Featured Product

    MAS Announces Regulatory Approach for Payment Token Derivatives

    May 15, 2020

    MAS published the final Securities and Futures (Prescribed Underlying Thing) Regulation 2020, which comes into operation on May 18, 2020. It also published a response to the feedback received on the proposed regulatory approach for derivatives contracts on payment tokens, under the Securities and Futures Act. Respondents were broadly supportive of MAS’ proposed approach to regulate Payment Token Derivatives offered by an Approved Exchange and not to regulate Payment Token Derivatives offered by other entities.

    In its response, MAS agreed that Payment Token Derivatives as a general asset class are not yet suitable to be regulated. Payment tokens tend to exhibit high volatility and are intrinsically difficult to value and the same applies to Payment Token Derivatives. As the product is not suitable for retail investors, MAS reiterates its caution to investors of the risks of trading payment tokens and Payment Token Derivatives. Nevertheless, MAS will still regulate Payment Token Derivatives that are offered on an approved exchange. Such exchanges are systemically important trading facilities and MAS views it important to have effective oversight over products offered on approved exchanges due to its risk of contagion to the wider financial system. 

    However, MAS will not regulate the non-"Approved Exchange Payment Token Derivatives." MAS is of the view that regulating Payment Token Derivatives offered by non-Approved Exchange entities (including digital payment token service providers under the Payment Services Act 2 will confer misplaced confidence in such highly volatile products that could lead to a wider offering to retail investors. MAS also notes that retail participation in such products remains relatively low and will continue to monitor developments in this area. This calibrated approach also provides institutional investors with a regulated alternative to gain exposure to the underlying assets, while the industry transforms and develops alternative products that may be suitable to a wider group of investors. The list of respondents to the consultation is enclosed as Annex A and the submissions are enclosed within Annex B of the response to feedback. 

     

    Effective Date: May 18, 2020

    Keywords: Asia Pacific, Singapore, Banking, Securities, Payment Token Derivatives, Securities and Futures Regulation, Derivatives, Approved Exchange, MAS

    Related Articles
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    News

    SEC Extends Comment Period on Climate Risk Disclosures

    The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.

    May 09, 2022 WebPage Regulatory News
    News

    APRA Reduces Committed Liquidity Facility, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.

    May 09, 2022 WebPage Regulatory News
    News

    CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks

    The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.

    May 06, 2022 WebPage Regulatory News
    News

    PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down

    The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.

    May 06, 2022 WebPage Regulatory News
    News

    EBA Updates Standards for 2023 Benchmarking of Internal Approaches

    The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.

    May 06, 2022 WebPage Regulatory News
    News

    EIOPA Responds to Stakeholder Views on Blockchain in Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.

    May 06, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8179