Featured Product

    MAS Revises Guide on Margin Requirements for OTC Derivatives Contracts

    February 11, 2020

    MAS revised the guidelines on margin requirements for non-centrally cleared over-the-counter (OTC) derivatives contracts. The document provides guidance on the scope of products and entities, margin calculations and methodologies, and eligible collateral and haircuts. MAS issued these guidelines pursuant to section 321 of the Securities and Futures Act (Cap. 289). These guidelines apply to the MAS Covered Entities. MAS has amended the list of uncleared derivatives contracts for which the exchange of margins does not apply. MAS made changes to Annex 1 of the guidelines, which provides a list of the MAS Covered Entities that need not undertake exchange of margins.

    As per the guideline, the amount of initial margin to be exchanged should be calculated by reference to either a quantitative portfolio margin model or a standardized margin schedule outlined in Annex 2. An MAS Covered Entity may opt for either approach and not restrict itself to one approach for all its uncleared derivatives contracts. However, the MAS Covered Entity should be consistent in its approach for all contracts within the same well-defined asset class. Reasons for the approach should be based on fundamental considerations, such as differing models approved in foreign jurisdictions or the inability of certain counterparties to use certain models or approaches.

    An MAS Covered Entity should commence the exchange of initial margin in respect of uncleared derivatives contracts entered into with a counterparty—that is, an MAS Covered Entity or a Foreign Covered Entity from the phase-in dates specified in the guidelines. The exchange of initial margin applies from each phase-in date where both the MAS Covered Entity and the counterparty each belong to a consolidation group whose aggregate notional amount of uncleared derivatives contracts exceeds the respective thresholds. The MAS Covered Entity means a person who is exempt from holding a capital markets services license under section 99(1)(a) or (b)3 of the Securities and Futures Act.

     

    Keywords: Asia Pacific, Singapore, Banking, Securities, OTC Derivatives, Margin Requirements, Guidelines, Initial Margin, MAS

    Related Articles
    News

    BIS and Central Banks Experiment with GenAI to Assess Climate Risks

    A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe

    March 20, 2024 WebPage Regulatory News
    News

    Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures

    Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.

    March 18, 2024 WebPage Regulatory News
    News

    Singapore to Mandate Climate Disclosures from FY2025

    Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies

    March 18, 2024 WebPage Regulatory News
    News

    SEC Finalizes Climate-Related Disclosures Rule

    The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.

    March 07, 2024 WebPage Regulatory News
    News

    EBA Proposes Standards Related to Standardized Credit Risk Approach

    The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU

    March 05, 2024 WebPage Regulatory News
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    RESULTS 1 - 10 OF 8957