The Monetary Authority of Singapore (MAS) established the Securities and Futures Reporting of Derivative Contracts Regulation pursuant to the Securities and Futures Act.
This regulation encompasses all six items outlined in Part IA of the First Schedule, encompassing Interest Rate, Credit, Foreign Exchange, Equity, and Commodity contracts. Ensuring precision and timeliness in reporting is essential, given the complexity and scope of these requirements.
Implementation Dates:
Monday, 21 October 2024
Major rule changes for The Monetary Authority of Singapore (MAS) reporting, better known as the MAS Rewrite, are set to be implemented in October 2024.
The MAS Rewrite aligns with the commencement date of the ASIC Rewrite.
Is Your Firm Ready for the Upcoming MAS Rewrite?
Firms subject to MAS reporting obligations need to assess their readiness for the upcoming MAS Rewrite in October 2024.
Evaluation of compliance with reporting requirements, technical readiness, and engagement with regulatory changes is essential.
Who is obligated to report?
The following entities are mandated to report, with certain exemptions applicable:
- Holders of a capital markets services licence (CMSL), subject to exemptions.
- Significant Derivatives Holders (SDH) as outlined in section 6 of the Regulations (further details below).
- Banks in Singapore licensed under the Banking Act (Chapter 19).
- Subsidiaries of banks incorporated in Singapore, subject to exemptions.
- Merchant banks approved as financial institutions under the Monetary Authority of Singapore Act.
- Finance companies licensed under the Finance Companies Act; and
- Insurers licensed under the Insurance Act, subject to exemptions.
This requirement is detailed in Section 124 of the Act and Section 6 of the Regulations.
Since October 2019, entities holding Bank and Merchant Bank licenses, Significant Swap Holders, Capital Markets participants, Finance Companies, Insurance entities, and Subsidiary Banks meeting specific trading or AUM thresholds are subject to the regulation.
However, there are exemptions for exchange-trade derivatives (ETD). MAS regulations mandate reporting only for OTC derivative trades, with exchange-traded derivatives (ETDs) exempt from the regulation.
What is MAS Reporting?
MAS Reporting mandates certain firms to report details of their derivatives transactions to a licensed trade repository.
Reporting obligations apply to banks, subsidiaries of banks, merchant banks, finance companies, insurers, holders of capital markets services licenses, and significant derivatives holders.
Key Features of MAS Reporting:
Reporting covers interest rate, credit, foreign exchange, commodity, and equity derivatives contracts booked or traded in Singapore.
Reporting deadline is T+2, i.e., two business days after the trade execution.
- Unique Product Identifiers (UPIs) and Unique Trade Identifiers (UTIs): UPIs and UTIs are not explicitly mentioned in the provided text for MAS reporting. However, they might be relevant for transaction identification and standardisation within reporting frameworks.
- Expanded Reporting Fields: As part of the global harmonisation efforts in regulatory frameworks, derivative industry endorsed critical data elements (CDE) are now utilised, resulting in a total of 134 reportable fields. In response to feedback from the wider investment community and the storage of FX swaps in company data systems, MAS will mandate the reporting of these product types as two distinct contracts, connected through the ‘FX Swap Link ID’ field. Other forms of package trades will be linked using the newly introduced ‘Package Identifier’ field.
- Event and Action Types: Among the new fields introduced are Event Type and Event Type Date. The Event Type identifies the cause of the transaction Action and includes values such as Trade, Compression, Credit Event, Corporate Event, and Novation. The combinations of Action and Event Types largely align with those introduced by ASIC, Japan, and the CFTC, with only a few exceptions.
Unique Trade Identifier
Unique Trade Identifier (UTI) Waterfall & Counterparty Matching– As part of the update, a single UTI is adopted for each derivative transaction, with responsibility for its creation following a waterfall approach based on a hierarchy of systems. This hierarchy includes CCPs, Clearing Members, trading venues, or confirmation platforms involved in the trade. For purely bilateral uncleared OTC trades, a bilateral agreement determines the generator. In cross-jurisdiction trades, the counterparty with the earliest reporting obligation is considered.
Given challenges in timely UTI sharing, MAS guidelines allow firms to use a temporary UTI if the correct UTI isn’t received on time, with the requirement to re-report with the correct UTI within two business days (T+2).
Where are MAS OTC Derivative reports submitted?
Reports for MAS OTC derivatives are submitted to designated trade repositories (TRs) regulated by MAS, which securely manage the data and provide it exclusively to regulators. Presently, DTCC is the sole TR available for reporting.
Snapshot of MAS Reporting Requirements:
Parties to Specified Derivative Contracts (SDCs) are required to report to a licensed trade repository under the Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013.
Reporting is obligatory for certain over the counter (OTC) derivative contracts, excluding exchange-traded derivatives contracts such as futures contracts.
In Summary:
MAS Reporting requires parties to Specified Derivative Contracts (SDCs) to report to a licensed trade repository. Reporting applies to various types of derivatives contracts booked or traded in Singapore, with a T+2 reporting deadline. The MAS Rewrite, scheduled for October 2024, introduces significant changes to MAS reporting requirements.
How can Novatus Global Help Prepare You for the MAS Rewrite:
Novatus Global offers extensive support for regulatory compliance, encompassing an understanding of rule requirements and the implementation of necessary technical adjustments. Partnering with Novatus Global guarantees a seamless transition and adherence to MAS reporting requirements. Here’s how we can assist:
- The Novatus En:ACT platform facilitates UAT testing across various regimes, allowing clients to upload files for immediate feedback on submissions.
- En:ACT’s UAT Testing solution identifies errors on both transaction and field levels, with clear connections to underlying regulations for efficient issue resolution.
- The Compliance Rules Engine within the En:ACT platform conducts thousands of tests across all trades and fields, covering G20 reporting regimes and ensuring ongoing compliance.
- Comprehensive reconciliations are conducted on submission files sent to regulators/trade repositories and source data held within OMSs, ensuring completeness and accuracy.
- Out-of-the-box analytics, management information, and reports enable swift identification of root causes and effective governance demonstration.
- Built-in workflow capabilities enable seamless issue tracking from identification to closure.
- AWS hosting ensures swift implementation, with data hosted locally for regulatory compliance.
