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

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868