MAS Postpones Non-Cleared Margin Rule

The Monetary Authority of Singapore (MAS)
has postponed the implementation of rules surrounding margin requirements for
non-centrally cleared derivatives.

The rules were due to be invoked on
September 1, however in a letter to market participants, MAS says it has
been in close consultations with the industry
in Singapore and regional regulators on a coordinated implementation of the
margin requirements.

As a result of this
consultation and in association with the Hong Kong Monetary Authority (HKMA), MAS
has re-considered the timeline “given recently announced changes in the
implementation schedules of other major markets”.

Taking into account
cross-border coordination issues as well as the level of industry preparedness,
MAS says it has concluded that deferring the implementation beyond 1 September
2016 “is the most practical way forward at this point in time”.

It says the delay will
avoid unintended disruptions to financial markets and allow more time for the
industry in Singapore to implement the new requirements.

MAS does stress in the
letter that it remains committed to the implementation of margin requirements
for uncleared derivatives in an internationally coordinated timeframe and says
it will issue the final rules in the coming months. It adds it expects
financial institutions to continue their preparation for the exchange of
margins on uncleared derivatives.

Although it does not
give a new date for implementation, MAS says it will continue to monitor
progress in the implementation schedules of other major markets, and will
announce a revised phase-in schedule for Singapore “in due course”.

Colin_lambert@profit-loss.com

Twitter @lamboPnL

Twitter
@Profit_and_Loss

Colin Lambert

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