May 22, 2018

MAS issued two consultation papers to improve business flexibility of market operators when establishing new centralized trading facilities and speed to market when launching new products. The consultations concern new multi-tier regime for market operators and the shift to a product notification regime. The proposals are part of the broader objectives of MAS to facilitate innovation in financial services by recognizing emerging new business models while safeguarding investor interests. Consultations end on June 22, 2018.

New multi-tier regime for market operators. MAS proposed to expand the existing Recognized Market Operators (RMO) regime from a single tier to three separate tiers (RMO Tier 1, RMO Tier 2, and RMO Tier 3) to better match regulatory requirements to the risks posed by different types of market operators. Tier 1 is for market operators that serve a limited base of retail investors, Tier 2 is for market operators that qualify under the existing RMO regime, and Tier 3 is for market operators that have a significantly smaller scale of business compared to more established operators under the existing RMO regime. MAS believes that a multi-tier RMO regime can better accommodate the emergence of new business models such as blockchain-based or peer-to-peer trading facilities and can lower the cost of entry for start-up operators. The current market operator regime is an application of MAS’ risk-based approach, matching regulatory requirements to the risks posed by market operators.

Shift to a product notification regime. MAS intends to replace the current approval regime for the launch of new derivatives products traded on exchanges or centralized trading facilities with a notification regime. To operationalize the new regime, MAS proposes for market operators to self-certify that the derivatives products to be traded comply with the MAS requirements and to notify MAS no less than one week prior to the product launch announcement. There will be no need to seek MAS approval and market operators will be better able to plan their launch timelines. As part of the self-certification process, market operators are required to identify and mitigate risks associated with the product launch. MAS will supervise market operators to check that they have appropriate internal controls and governance procedures to be able to assess and monitor the relevant product risks and mitigating measures. The shift to a product notification regime is in line with the international norms. Regulators such as U.S. CFTC, the Australian Securities and Investments Commission, and JFSA have similar product notification regimes for their exchanges and market operators.

Keywords: Asia Pacific, Singapore, Securities, Product Notification Regime, RMO Regime, Trading, Derivatives, Proportionality, MAS

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476