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
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.