MAS consults on proposed amendments to the Securities & Futures (Reporting of Derivatives Contracts)
On 5 July 2021, the Monetary Authority of Singapore (“MAS”) issued a consultation paper on Proposed Amendments to the Securities & Futures (Reporting of Derivatives Contracts) Regulations”. The paper sets out the MAS’ proposed amendments to over-the-counter (“OTC”) derivatives reporting rules in the Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013 (“SF(RDC)R”) – namely the implementation of unique transaction identifier (“UTI”), proposed changes to the reportable data fields under the First Schedule to the SF(RDC)R, and the adoption of ISO 20022 Standard.
We have set out below a summary of the proposed changes and implementation timeline:
1. Proposed approach for the implementation of UTI
- The MAS has proposed to align its UTI reporting requirement with the UTI Technical Guidance as far as possible by amending the current UTI reporting requirement in the SF(RDC)R and issuing guidelines to provide clarity on MAS’ expectation on the UTI generation and reporting requirements.
- Proposed changes include requiring reporting entities to report a UTI which is uniquely assigned to each OTC derivatives contract, and that one entity (excluding those acting as agents) should be responsible for the timely generation of UTI (“UTI-generator”) for a reportable OTC derivatives contract, with the UTI-generator determined according to the cross-jurisdictional nature of the contract and clearing model.
2. Proposed changes to the reportable data fields in the First Schedule to the SF(RDC)R
- The First Schedule to the SF(RDC)R sets out the data fields required to be reported for each OTC derivatives contract.
- The MAS is proposing to amend the First Schedule to the SF(RDC)R to include additional data fields which will align the definitions of common data fields to the CDE Technical Guidance as closely as possible. In addition, MAS is proposing to issue guidelines to supplement the First Schedule to the SF(RDC)R to provide guidance on the interpretation of the data fields.
- In its consultation paper, the MAS has also presented proposals in respect of the following topics:
- Adoption of global unique product identifier
- Approach to reporting elements relating to direction of the trade
- Approach to Collateral & Margin data fields
- Approach to Custom Basket data fields
- Foreign exchange swaps
3. Adoption of ISO 20022 Standard
- The MAS recognises the benefits of a single standard for OTC derivatives reporting, and intends to adopt the ISO 20022 XML message format, which is in the development stage, for OTC derivatives reporting to the trade repository.
4. Implementation timeline
- The MAS intends to finalise the reportable data fields in the First Schedule to the SF(RDC)R and the UTI Guidelines by Q2 of 2022 and implement the revised requirements in Q2 of 2023.
- The MAS is proposing to require the re-reporting of existing contracts with maturity of at least one year as at the effective date of the revised First Schedule of the SF(RDC)R, and providing a 6-month transition period for these Reportable Existing Contracts to be re-reported.