Consultation Paper on Proposed Amendments to the Securities & Futures (Reporting of Derivatives Contracts) Regulations

The Monetary Authority of Singapore, MAS, has published a response paper to its consultation on proposed amendments to the Securities & Futures (Reporting of Derivatives Contracts) Regulations and the issuance of corresponding new guidelines. Therein, MAS outlines the responses it has received to its consultation and sets out the final amendments as they will be implemented and come into force presumably in October 2024.
To recall, MAS suggested amendments relating to the reporting of derivatives that mainly aim to harmonize the reporting standards in Singapore with those set out in the technical guidances of the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions (CPMI-IOSCO). These guidances cover the reporting of UTIs (unique transaction identifier), UPIs (unique product identifier), and other relevant data elements in that regard. In its consultation, MAS suggested to adjust its regulation to, among other things
(1) require firms to report and use throughout the entire life cycle the UTI for OTC derivatives contracts; such UTI is unique for each contract;
(2) establish a process for the UTI generation thereby taking into consideration the originator and origination of the contracts, among other issues;
(3) require firms to make reasonable efforts to provide a UTI;
(4) align the reporting data fields as prescribed in Annex E. In this context, it is important to note that the data fields not only cover those set out in the guidances by CPMI-IOSCO, but also those of other important jurisdictions around the world (U.S., EU) to facilitate a global reporting standard;
(5) require firms to report and use the UPI once it will be available;
(6) exempt reporting entities that are not counterparties to a contract from the reporting of data fields relating to collateral and margin data (except for fund management companies, including REITs); and
(7) require the reporting of „Custom Basket fields (50 to 53)“ once a global technical guidance will be available.
In its response paper now, MAS states that most respondents were supportive of the proposed changes as they will contribute to a global standardization of derivative reporting. However, some issues arose as regards packaged transaction identification, the use of additional data fields, data fields that appear / appeared unnecessary to respondents, the exemption from collateral and margin reporting requirements by investment funds, and the reporting of foreign exchange (FX) contracts which is why MAS has made several changes to the proposed version, including the following:
– MAS has incorporated a new „package identifier data field“ in the First Schedule of the regulations which will allow the identification of derivative contracts which are part of a package trade;
– MAS has additionally incorporated two new data fields, namely “Asset class” and “Contract type” in the First Schedule, which permit the identification of the type and the nature of the contract and which are common in the reporting requirements in other jurisdictions;
– MAS has removed the following data fields from the First Schedule: “Basket constituent unit of measure”, “Basket constituent number of units”, “Beneficiary 1”, and “Beneficiary 1 identity type” which are either unnecessary or duplicate information already contained in other data fields;
– MAS has added new conditions under new Regulation 7(2) of the regulations to clarify when a reporting entity is exempt from collateral and margin reporting requirements;
– MAS has finalized the reporting of FX contracts as two separate contracts which will be linked by the data field “FX swap link ID”.
Naturally, MAS has also made corresponding revisions to the proposed technical guidance. Both documents, the new regulation and the new guidance are attached to this Event.