MAS consults on regulations to require OTC derivatives to be traded on organised markets


The Monetary Authority of Singapore (MAS) issued for consultation today proposed regulations to require the trading of over-the-counter (OTC) derivatives on organised markets, to help improve market transparency. This requirement will complete MAS’ implementation of the G20 OTC derivatives reforms.

MAS proposes to impose obligations for the most globally-traded OTC derivatives, namely interest rate swaps denominated in US Dollar, Euro and Pound Sterling to be traded on organised markets, i.e. exchanges or other centralised trading facilities. These obligations will apply to banks whose gross notional outstanding OTC derivatives exceed $20 billion. MAS expects that about 80% of Singapore’s market in these products would have to be executed on organised markets following the commencement of the proposed trading obligations.

The US and the EU regulatory authorities have already implemented similar trading obligations for the same OTC derivatives products. MAS plans to seek equivalence determinations from the US and EU for exchanges and other centralised trading facilities in Singapore. This will allow these markets in Singapore to be used by US and EU market participants to fulfil their trading obligations.

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MAS consults on regulations to require OTC derivatives to be traded on organised markets

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