Another day, another regulatory change.
This time MAS Rewrite.

Published: November 14, 2023

The Monetary Authority of Singapore (MAS) is introducing some notable amendments to their OTC derivative transaction reporting in October 2024. This broadly aligns with the ASIC Rewrite timelines, which we discussed previously. These changes are being introduced to enhance transparency, mitigate risk and help secure the reliability of Singapore’s OTC derivative market; whilst also simplifying reporting through standardisation and harmonisation of critical data elements across global reporting regimes.

Are you preparing to be ready for these changes? First Derivative is happy to highlight some of the looming changes to help you to stay ahead.

So, what kind of changes is MAS introducing?

The table below highlights some of high-level changes that are coming in and how these align across some of the other regulations.

Theme	MAS Rewrite	ASIC Rewrite	EMIR Refit	Comments
Global UTI				All align to Global UTI standards, but with differing interpretations on approach to be taken where a UTI is not shared by the reporting deadline. See further information below regarding MAS interpretation.
UPI				All align to Global UPI standards. ANNA-DSB is the sole service provider.
ISO 20022				All adopt the XML messaging format.
Field Changes				MAS – Reportable fields expand to 134 ASIC – Reportable fields expand to 143 EMIR – Reportable fields expand to 203
LCE/Action Types				All introduce Event Type alongside Action Type.
Package/Complex Trades				MAS and ASIC introduce a “swap link ID” to report swap components as separate transactions, contrary to EMIR which requires one single contract to be reported. Package Identifier is introduced.
Collaterial/Margin				All regimes introduce new collateral fields to be reported.
Historical Backloading				MAS requires HBL upon go-live date (see further information below). EMIR REFIT allows a 6-month window. ASIC also allows a 6-month window (with various caveats as to what brings a trade in-scope).
Exemptions				MAS brings in exemptions for collateral reporting, whilst ASIC brings in the concept of “small-scale buy-side” entities. See further details on MAS exemptions for collateral below.
Reporting Deadline	T+2	T+2 Vanilla T+4 – Structured	T+1	APAC regulations have longer submission deadlines to allow more time for UTI sharing.

Key

	Regulatory Impact
	No Regulatory Impact

NB: HKMA is targeting to publish its consultation by 2023-end. It has not made any regulatory announcement on regulatory timelines

Global UTI (Unique Transaction Identifier):

MAS has introduced numerous changes to the ‘unique transaction identifier’ (UTI) and looks to embrace its use as part of the industry-wide rollout for the uniform use of UTI.

The table below showcases MAS’s rule changes.

UTI Approach

A unique UTI should be reported.
The same UTI should be used cross jurisdiction.
This UTI should remain the same throughout the lifecycle of the derivative.
A new UTI to be generated where a life cycle event creates one or more new reportable contracts.
UTI must be generated in a timely manner
Reasonable efforts should be made to obtain the UTI

Responsibility for generating the UTI

Only one entity should be the UTI generating entity.
CPMI-IOSCO’s UTI Waterfall approach is used to help determine the UTI generator.
Rules exist for counterparties that only report under the SFA depending on whether one or both counterparties are required to report.
If reportable under the SFA AND another jurisdiction – follow the waterfall flow.

Use of Interim UTI

A reporting entity may use an interim UTI when not the UTI generator and unable to obtain a UTI by the reporting deadline.
The reporting entity should continue to attempt to obtain the UTI.
Once obtained the reporting entity must send a modification with the new UTI within 2 business days
The entity must report the Interim-UTI in the “prior UTI” field when the new UTI is acquired.

Implication on agency reporting requirements

The contract is required to be reported by an agency who executes or causes a contract to be executed but is not expected to be the UTI generating entity.
Use the waterfall logic to determine the UTI generator if the above is true AND neither counterparty has an obligation in under SFA or another jurisdiction.

Notably, MAS are allowing the use of an ‘Interim UTI’ where a UTI cannot be retrieved from the generating party by the T+2 deadline. This differs to EMIR REFIT, where ESMA have alluded that rather than using an incorrect or interim UTI, they would prefer no report be sent.

Collateral Exemptions:

MAS does not expect collateral and margin details to be reported when:

The reporting entity is not a counterparty to the contract;
The counterparty anticipates that they will not be able to capture the collateral and margin information after the contract was executed;
A fund/real estate investment trust (REIT) manager executes a derivative contract for a portfolio not managed by them.

Backloading:

MAS will require the re-reporting of all outstanding contracts in the updated reporting criteria upon compliance date. They have specified an exemption for contracts maturing within 6 months of that date. MAS also excludes the reporting of any data mandated by the new requirements that was not originally captured when the contract was executed.

This differs from EMIR where ESMA allows 180 days for historical backloading to take place and does not apply any the exemptions. Finally, contract modifications must be reported in the new format within 2 business days of the revised rules going live.

Challenges Ahead!

Staying ahead of regulatory changes is vital for ensuring compliance with a constantly changing regulatory landscape. Whilst challenging, this also presents an opportunity to improve overall operational effectiveness and will help to strengthen resilience to risk.

Prevalent challenges experienced across the industry include the following (though not limited to):

UTI Waterfall Logic

Will the UTI generator share the UTI in time for reporting?

ISO 20022

Have the complex changes for this transition to XML been explored?

Global UPI

Are you ready to source the UPI from ANNA DSB’s platform?

Critical Data Elements

Has a common data model been considered across all regulations which factors in overlapping data points?

The power of Partnership: How First Derivative supports you!

Many of these challenges are in sync with the problems our consultants have helped organisations overcome for recent regulatory changes such as CFTC Rewrite and EMIR Refit.

Our highly skilled consultants at First Derivative can help you with regulation interpretation, implementation and support you with overcoming your regulatory obstacles. We provide impressive expertise in many areas such as PM, PMO, BA and QA and would endeavour to lighten your load and help you on the road to success. First Derivative is ready and waiting for your call.