Monetary Authority of Singapore Annual Report 2012/2013

A ROBUST FINANCIAL CENTRE

Develop and Implement a Regulatory Framework for OTC Derivatives

MAS is working towards implementing the recommendations of the Financial Stability Board (FSB) on strengthening regulation of over-the-counter (OTC) derivatives.

In February 2012, MAS consulted on policy proposals to: (a) mandate the reporting and clearing of OTC derivatives; (b) extend the current regulatory regimes for market operators, clearing facilities and capital market intermediaries to include OTC derivatives; and (c) introduce a new regulatory regime for trade repositories. MAS also sought public feedback on whether it is appropriate to require trading of standardised OTC derivative contracts on exchanges or electronic trading platforms at this stage, taking into account the nature of the derivatives markets in Singapore.

MAS will implement the OTC regulations in phases. Amendments to the Securities and Futures Act (Cap. 289) for phase 1, which include (i) mandating the reporting and clearing of OTC derivatives; (ii) extending the current regulatory regimes for clearing facilities to include OTC derivatives and; (iii) introducing a new regulatory regime for trade repositories, were passed by the Singapore Parliament in November 2012. Mandatory reporting of OTC derivatives is expected to begin in H2 2013, and mandatory clearing to begin in H1 2014.

MAS intends to implement fully the global OTC derivatives reform agenda, taking into account the characteristics of Singapore’s markets. We will continue to participate in and contribute actively at international discussions on OTC derivatives reforms, such as the FSB OTC Derivatives Working Group, OTC Derivatives Regulators’ Group, BCBS-IOSCO Working Group on Margin Requirements and the CPSS-IOSCO Working Group on access to trade repositories’ data.