Revised reporting requirements for OTC derivative contracts

To recap, on 5 July 2021, the MAS issued a Consultation Paper on “Proposed Amendments to the Securities and Futures (Reporting of Derivative Contracts) Regulations (“Consultation Paper”) to adopt changes to be aligned with technical guidance, published by the Committee on Payments and Market Infrastructures and the International Organisation of Securities Commissions (CPMI-IOSCO). On 16 May 2023, MAS published its  Response to Feedback Received on the Consultation Paper to address the feedback obtained and lay out the finalized requirements.

This article provides a high-level summary of the key amendments that will take effect from 21 October 2024:

• Unique Transaction Identifier (“UTI”) Implementation and Reporting
  • reporting entities must report a UTI assigned to each reportable contract and not based on a reporting entity’s trade position.
  • the UTI is to be generated and reported for each contract in a package trade.
  • the UTI must remain consistent throughout the contract’s lifecycle.
  • the same UTI applies even when the reporting occurs across various jurisdictions.
  • reporting entities acting as agents must obtain UTIs from counterparties if no reporting obligation exists for the contract.
• Responsibility for UTI Generation
  • responsibility for UTI generation is determined by the CPMI-IOSCO Waterfall factors set out within the UTI Technical Guidance
  • in order to provide further flexibility to reporting entities, the reporting guidelines will allow either the counterparties to the OTC derivative agreement, or even a third party, to generate the UTI code.
• Responsibility for UTI Generation for contracts which are only reportable under the SFA
  • For domestic contracts which are neither centrally-cleared nor centrally executed, and where only one counterparty to the contract is subject to reporting obligations under the SFA (i.e. the reporting entity), MAS proposes that the reporting entity generates the UTI
  • For domestic contracts where both counterparties are subject to reporting obligations under the SFA, MAS proposes that the UTI-generator be determined by the waterfall factors laid out by the Authority (i.e. the confirmation platform, the entity as agreed by the counterparties, the trade repository, or one of the counterparties to the contract based on sorting of the identifiers).
• Responsibility to provide or obtain a UTI in a timely manner
  • MAS generally expects that UTIs be generated in a timely manner for compliance with the reporting deadline in the SF(RDC)R and in other jurisdictions.
  • Reporting entities should also make reasonable efforts to provide the UTI in a timely manner to any entity who requests for the UTI and to establish internal policies and arrangements that commensurate with the scale of its business.
  • Where a reporting UTI is unable to obtain the UTI within the reporting deadline despite having made reasonable efforts, the reporting entity may internally generate an interim-UTI for reporting purposes, while it continues to make reasonable efforts to obtain the UTI from the UTI-genrator or counterparty to the contract.
• Changes to reportable data fields
  • MAS will add new fields to align with other regimes globally: “Package identifier”, “Asset class” and “Contract type”.
  • MAS will remove data fields for “Basket constituent unit of measure”, “Basket constituent number of units”, “Beneficiary 1” and “Beneficiary 1 identity type”.
  • there are now 134 reportable fields
  • the complete list is available in Table 2 of the First Schedule of Annex D to the reporting guidelines where MAS includes information on acceptable values and which fields apply to each asset class.
• Unique Product Identifier (“UPI”)
  • the purpose of the UPI is to denote a specific OTC derivatives product reported to a trade repository to facilitate global data aggregation of the specific product in the OTC derivatives market
  • a UPI code signifies a collection of specific values on the reference data elements which reside in the UPI Reference Data Library which went live in October 2023.
  • MAS will adopt the requirement to report global UPI in the UPI field set out in the Reporting Guidelines. MAS will also continue requiring the reporting of data elements related to instrument type, instrument characteristics, and underlier elements.
• Directional Elements
  • the reporting entity is to report elements that relate to the direction of the trade from its perspective
• Collateral and margin
  • exemptions for reporting collateral and margin information by reporting entities will not be extended to fund/real estate investment trust (“REIT”) managers executing OTC derivative contracts on behalf of a fund/REIT that it manages
  • in cases where a fund/REIT manager is executing an OTC derivatives contracts for a portfolio that it does not manage, MAS views the fund/REIT manager’s role to be that of an agent and, would therefore not be required to report.
• FX Swaps reporting
  • MAS requires the reporting of FX swaps as two separate contracts linked through the ‘FX Swap Link ID’ field
  • for other types of package trades, reporting entities should report the identifier linking the package trades under the “Package identifier” data field.
• Transition to XML submissions
  • similar to standards applied elsewhere, Singapore derivative reporting submissions to trade repositories (TR) will be in the ISO 20022 XML format
  • this will replace current CSV or fPML formats currently being used.
• Treatment of Existing contracts
  • MAS is of the view that re-reporting is necessary in order to improve data quality
  • any contracts that remain outstanding at the end of October 2024 that have a maturity date greater than six months from their commencement date will be required to be re-reported within two business days.

How Waystone Compliance Solutions can help

Waystone Compliance Solutions has extensive experience assisting firms to navigate MAS compliance requirements. If you would like to discuss your reporting requirements in more detail, please reach out to our APAC compliance solutions team, or contact us.

Contact us