13 April 2018

Trade Reporting of Equity and Commodity Derivatives Contracts to Start

The MAS will be implementing the trade reporting of equity and commodity derivatives contracts traded and/or booked in Singapore for banks and merchant banks from 1 October 2018. Trade reporting for other parties will start on 1 October 2019 for interest rate and credit derivatives contracts and 1 October 2020 for equity, commodity and foreign exchange derivatives contracts. Reporting of collateralisation will be deferred.

The Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013 (Regulations) have been amended with effect from 1 April 2018 in order to implement, among other things, the reporting of commodity derivatives contracts and equity derivatives contracts traded and/or booked in Singapore. Trade reporting has already been implemented for interest rate derivatives contracts, credit derivatives contracts and foreign exchange derivatives contracts for banks and merchant banks.  

New Contracts to Be Reported

As noted above, trade reporting obligations will apply to commodity derivatives contracts traded and/or booked in Singapore. These will include all forwards, swaps and options that are related to commodities or commodity indices, or contracts with cash flows determined by reference to one or more commodities. Spot contracts are not included.

Trade reporting obligations will also apply to equity derivatives contracts traded and/or booked in Singapore. Equity derivatives contracts refer to

  • Rights, options or derivatives related to stocks or shares issued or proposed to be issued by a corporation or body unincorporated;
  • Contracts related to equities or equity indices; and
  • Derivatives of a unit in a business trust.

They do not include debentures, shares or units in a business trust or collective investment scheme.
 
The Regulations have also been amended to clarify that a derivatives contract is booked in Singapore when it is entered on the balance sheet or the profit and loss accounts of a person where that balance sheet or profit and loss account relates to the person’s business in Singapore. This additional criterion was not previously specified.
 
New Information to Be Reported
 
The new information to be reported for all classes of derivatives contracts are the booking location and the location of the trading desk.
 
In view of delays internationally in the implementation of collateral reporting, the reporting of collateralisation will be deferred.
 
Persons Exempted from the Trade Reporting Obligations
 
The following persons are exempted from the mandated trade reporting obligations:

  • A holder of a capital market services licence but only in respect of contracts entered into with retail customers (ie, any person who is not an accredited or institutional investor) (Note that the proposal that this exemption be similarly applied to banks and merchant banks has not been adopted after feedback);
  • A holder of a capital market services licence in respect of contracts entered into with a person who is an accredited or institutional investor if the aggregate gross notional amount of these contracts for the past four consecutive quarters is less than SGD5 billion;
  • An approved trustee;
  • A subsidiary of a bank, an insurer and a holder of a capital market services licence that has commenced its business or operations for less than four quarters, but only until the end of the fourth quarter;
  • A manager of a fund or a REIT whose total value of managed assets does not exceed SGD8b (the Monetary Authority of Singapore has indicated that this exemption will eventually be replaced with one based on the aggregate gross notional amount); 
  • A subsidiary of a bank if the aggregate gross notional amount of its specified derivatives contracts traded or booked in Singapore in the past four consecutive quarters is less than SGD5b;
  • An insurer if the aggregate gross notional amount of its specified derivatives contracts traded or booked in Singapore in the past four consecutive quarters is less than SGD5b; and
  • A trust company licenced under the Trust Companies Act in respect of specified derivatives contracts entered into in its capacity as trustee.

Timeline for Trade Reporting
 

Commencement Date for Reporting What Must Be Reported Who Must Report
1 October 2018

Booking Location

Trader Desk Location

All
  • Equity derivatives contracts
  • Commodity derivatives contracts
  • Banks
  • Merchant banks
1 October 2019
  • Interest rate derivatives contracts
  • Credit derivatives contracts
  • All finance companies
  • Subsidiaries of banks incorporated in Singapore with an annual aggregate gross notional amount of specified derivatives contracts of more than SGD5b
  • Insurers with an annual aggregate gross notional amount of specified derivatives contracts of more than SGD5b
  • Holders of capital market services licences
  • Subsidiaries of banks incorporated in Singapore with an annual aggregate gross notional amount of specified derivatives contracts of more than SGD5b
  • All significant derivatives holders
1 October 2020
  • Equity derivatives contracts
  • Commodity derivatives contracts
  • Foreign exchange derivatives contracts

 

Yin Mei Lock +65 667 16188
Partner, Singapore yinmei.lock@allenovery.com
Lian Chuan Yeoh +65 6671 6075
Counsel, Singapore lianchuan.yeoh@allenovery.com
Segaran Prakash +65 6671 6060
Partner, Singapore pakash.segaran@allenovery.com
Wee Teck Lim +65 66716142
Professional Legal Support, Singapore WeeTeck.Lim@allenovery.com

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