Regulatory Alerts2016-08-22
Added
Circular on Margin Requirements for Non-Centrally Cleared Derivatives
The Monetary Authority of Singapore deferred the implementation of margin requirements for non-centrally cleared over-the-counter derivatives beyond the original September 2016 deadline to ensure international coordination and industry preparedness. This decision follows consultations with the Hong Kong Monetary Authority and other major markets to avoid unintended disruptions to financial markets while allowing more time for institutions to comply. MAS will issue final rules in the coming months and announce a revised phase-in schedule once global implementation timelines are confirmed.
Circular No. MPI 01/2016 22 August 2016 To: All Persons who are exempt from holding a capital markets services licence under section 99(1)(a) or (b) of the Securities and Futures Act Dear Sir / Madam MARGIN REQUIREMENTS FOR NON-CENTRALLY CLEARED DERIVATIVES On 1 October 2015, the Monetary Authority of Singapore (MAS) issued for consultation proposals to implement margin requirements for non-centrally cleared overthe-counter (OTC) derivative trades (uncleared derivatives)1 . As part of the consultation, MAS proposed that margin requirements for uncleared derivatives would be phased in from 1 September 2016. We have since been in close consultations with the industry in Singapore and regional regulators on a coordinated implementation of the margin requirements. 2 MAS, in consultation with the Hong Kong Monetary Authority (HKMA), has reconsidered the timeline for implementation of the margin requirements for uncleared derivatives given recently announced changes in the implementation schedules of other major markets. Taking into account cross-border coordination issues as well as the level of industry preparedness, the MAS has concluded that deferring the implementation beyond 1 September 2016 is the most practical way forward at this point in time. This will avoid unintended disruptions to financial markets and allow more time for the industry in Singapore to implement the new requirements. 3 MAS remains committed to the implementation of margin requirements for uncleared derivatives in an internationally coordinated timeframe. MAS will issue the final rules on margin requirements for uncleared derivatives in the coming months and expects financial institutions to continue their preparation for the exchange of margins on uncleared derivatives. 4 MAS will continue to monitor progress in the implementation schedules of other major markets, and will announce a revised phase-in schedule for Singapore in due course. Yours faithfully (Sent via MASNET) NG YAO LOONG EXECUTIVE DIRECTOR MARKETS POLICY & INFRASTRUCTURE DEPARTMENT