Jurisdiction - Singapore
Reports and Analysis
Singapore – Trade Reporting For FX Derivatives Contracts To Commence On 1 May 2015.

13 November, 2014

 

Legal News & Analysis – Asia Pacific – Singapore  Capital Markets

 

The Securities and Futures (Reporting of Derivatives Contracts) (Amendment No. 2) Regulations 2014 came into operation on 1 November 2014. It sets out the requirements for the trade reporting of foreign exchange (“FX”) derivatives contracts.
Trade reporting is currently only required for such contracts traded or booked in Singapore. The timelines are as follows:

 

  • For FX derivatives contracts booked in Singapore:
    • Reporting to start on 1 May 2015 for information referred to in Parts I and IV of the First Schedule; and
    • Reporting to start on 1 November 2015 for information referred to in Part IA of the First Schedule; and
  • For FX derivatives contracts traded in Singapore:
    • Reporting to start on 1 November 2015 for information referred to in Parts I, IA, and IV of the First Schedule.

Only banks and merchant banks will be required to report, and reporting is not specified for any of the following:

 

  • subsidiaries of a bank incorporated in Singapore;
  • finance companies;
  • insurers;
  • approved trustees;
  • holders of a capital markets services licence; and
  • significant derivatives holders.

The following contracts have been excluded from the trade reporting regime:

 

Contract Type Settlement Period
FX contracts settled by actual delivery of underlying currency, involving currency pairs between: 

  • Euro;
  • US Dollar;
  • Japanese Yen;
  • Australian Dollar;
  • Swiss Franc;
  • Hong Kong Dollar;
  • New Zealand Dollar;
  • Singapore Dollar;
  • Norwegian Krone; and
  • Mexican Peso.

 

Within two business days.
FX contracts settled by actual delivery of underlying currency, involving any other currency pairs. Within the earlier of: 

  • The longer of the customary spot settlement periods of the currency pair; or
  • Seven business days.
 
FX contracts for the sole purpose of buying or selling a security denominated in another currency. Within the earlier of: 

  • The settlement period of the underlying security; or
  • Seven business days.
 

 

While the definition of “booked in Singapore” remains the same, the definition of “traded in Singapore” has been amended. Under the amended definition, a contract is traded in Singapore if it is executed by:

 

  • Traders who are employed in Singapore; or
  • Traders located in Singapore who have been executing trades, or have been authorised to execute trades, for at least the last 30 days prior to the date of the contract.

Accordingly, contracts executed by traders on short-term trips or assignments to Singapore of less than 30 days will not be regarded as “traded in Singapore”. This amended definition will apply to all of the derivatives contracts specified under the Securities and Futures (Reporting of Derivatives Contracts) Regulations.


Finally, the Monetary Authority of Singapore has stated in its Response to Feedback Received that it will be extending masking relief to 1 November 2015. This is due to feedback to its proposal to remove EU jurisdictions from the list of jurisdictions for which masking of counterparty information is conditionally permitted. It has also stated that it will make legislative changes to the Securities and Futures Act to lift banking confidentiality for the purposes of meeting the reporting requirements.

 

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For further information, please contact:

 

Elaine Chan, Partner, WongPartnership

elaine.chan@wongpartnership.com


Rosabel Ng, Partner, WongPartnership
rosabel.ng@wongpartnership.com

 

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