MAS Proposes Legislation for a Regulatory Framework for Financial Benchmarks
Singapore, 29 July 2014... The Monetary Authority of Singapore (MAS) today released a consultation paper on legislation to introduce a regulatory framework for financial benchmarks. A financial benchmark is typically a price, estimate, rate, index or value that is made available to third parties for use as a reference in financial instruments or transactions.
2 This follows a consultation in 2013 on policy proposals to introduce a regulatory framework for financial benchmarks. Taking into account the feedback received, MAS is now proposing legislation to effect the policy proposals.
3 The legislation will comprise two key thrusts:
The manipulation of any financial benchmark in Singapore will be made liable to criminal and civil sanctions under the Securities and Futures Act (SFA). This will apply to acts of manipulation occurring within Singapore and in respect of financial benchmarks administered in Singapore.
Administrators and submitters of financial benchmarks designated by MAS will be subject to regulation, including licensing requirements. MAS will designate key financial benchmarks, based on their systemic importance and susceptibility to manipulation. For now, MAS intends to designate the Singapore Interbank Offered Rates (SIBOR) and Swap Offered Rates (SOR) as key benchmarks.
4 Mr Lee Boon Ngiap, Assistant Managing Director, MAS said, “Financial benchmarks play an important role in the functioning of the financial system. The proposed regulatory framework will deter manipulation of financial benchmarks and enhance the integrity of benchmarks set in Singapore.”