Featured Product

    MAS Amends Notices on Risk-Based Capital Adequacy Requirements

    June 14, 2021

    MAS revised Notices 637 and 1111 on the risk-based capital adequacy requirements, along with Notice 656 on the exposures to single counterparty groups for banks incorporated in Singapore. The revised notices will be effective from July 01, 2021. MAS also announced that Notice 639 on exposures to single counterparty groups dated June 06, 2007 has been cancelled, with effect from July 01, 2021.

    The MAS Notice 637 (Amendment) 2021 reflects amendments to the Notice 637 and specifies that the transitional arrangements for adoption of the standardized approach for counterparty credit risk (SA-CCR) and the revised capital requirements for bank exposures to central counterparties will cease on December 31, 2021. The MAS Notice 637 (Amendment) 2021 also reflects amendments that set out an alternative treatment for the measurement of derivative exposures for leverage ratio calculation, using a modified version of SA-CCR, and amendments to implement other technical revisions to the credit risk framework. The Notice 637 applies to locally incorporated banks and sets out the capital adequacy ratio and leverage ratio requirements, along with the methodology and process for calculating these ratios. The notice also sets out requirements for the internal capital adequacy assessment process, public disclosure requirements in relation to the capital adequacy and risk exposures, and data submission and disclosure requirements on the indicators for assessing the systemic importance of global banks.

    Another notice that MAS revised is Notice 1111, which sets out the capital adequacy ratio requirements for a locally incorporated merchant bank, along with the methodology and process for calculating this ratio. The reporting merchant banks shall submit information on their capital adequacy requirement, calculated according to the requirements and guidelines of the notices in the format of the reporting schedules set out in Annexes and such other reporting schedules as MAS may specify.

    Finally, the MAS Notice 656 (Amendment) 2021 makes changes to Notice 656 to reflect the development that the transitional arrangements for adoption of the standardized approach for credit risk under Notice 637 will cease on December 31, 2021. MAS Notice 656 (Amendment) 2021 also reflects amendments to Notice 656 to refine the definitions of “counterparty, covered bonds, multilateral development bank, and mortgage institution.” In addition, the amendments clarify the treatment for an exempt exposure that is secured by eligible financial collateral or eligible credit protection and set out other technical and editorial revisions. Notice 656 sets out limits on exposures of a locally incorporated bank to a single counterparty group, type of exposures to be included in or excluded from those limits, basis for computation of exposures, eligible credit risk mitigation techniques, and approach for aggregation of exposures. 

     

    Effective Date: July 01, 2021

    Keywords: Asia Pacific, Singapore, Banking, Counterparty Credit Risk, Credit Risk, Liquidity Risk, Reporting, Basel, Regulatory Capital, SA CCR, MAS

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7307