MAS Consults on Revised Reporting Rules for OTC Derivatives

The amendments aim to facilitate the aggregation of OTC derivatives data through standardisation and harmonisation of data elements by incorporating the CPMI-IOSCO technical guidance.

MAS (Monetary Authority of Singapore) has issued a new consultation paper seeking views on proposed amendments to its reporting rules for OTC derivatives.

The proposed amendments aim to facilitate the aggregation of OTC derivatives data through standardisation and harmonisation of data elements by incorporating CPMI-IOSCO’s technical guidance on the harmonisation of the UTI (unique transaction identifier), UPI (unique product identifier) and other CDE (critical data elements).

“With harmonised data elements, OTC derivatives data will be of higher quality and enable MAS to better monitor systemic risks and further use the data for supervisory and market surveillance purposes as well,” the paper says.

The consultation sets out MAS’ proposed approach in relation to UTI generation and the proposed reportable data fields, including UTI, UPI and CDE.

With regard to the UTI, MAS proposes to amend the rules to require reporting entities to report a UTI which is uniquely assigned to each OTC derivatives contract. In addition, when a UTI is allocated to an OTC derivatives contract, the UTI should remain as the identifier throughout the life of the contract.

To avoid the risk of multiple UTIs being generated for the same reportable OTC derivatives contract, only one entity should be responsible for generating the UTI for a reportable OTC derivatives contract.

To facilitate a globally harmonised approach, MAS intends to follow the CPMI-IOSCO Waterfall, outlined here, as closely as possible. Where there are potential conflicts with the rules or requirements of other jurisdictions, MAS will work with other regulators and the industry to find an appropriate solution.

The consultation seeks views on the implementation and operational uncertainties or challenges that a reporting entity may face in determining the UTI generator for cross-jurisdictional contracts if MAS strictly follows the CPMI-IOSCO Waterfall, outlined here, or prioritises the determination of a cross-jurisdictional contract higher in the waterfall, outlined here.

For OTC derivatives contracts that are centrally-cleared, MAS proposes that the CCP or the clearing member that is a party to the contract generates the UTI.

For purely domestic OTC derivatives contracts which are neither centrally-cleared nor centrally-executed, and where only one counterparty to the contract is subject to reporting obligations, MAS proposes that the reporting entity generates the UTI.

Where both counterparties are subject to reporting obligations, MAS proposes a hierarchy where the UTI generator is either the confirmation platform, an entity agreed by the counterparties, the trade repository, or one of the counterparties – in that order.

MAS also proposes to include in the reporting rules additional data fields which will assist it to effectively carry out our duties, as well as to align the definitions of common data fields to the CDE Technical Guidance.

Additional guidelines are proposed to be issued on the interpretation of the data fields, adopting international standards on structure and format, where available.

With regard to the UPI, MAS plans to update its guidelines once the global UPI system is available, which is expected no later than Q3 2022. The system is currently being developed by the DSB (Derivatives Service Bureau).

MAS intends to finalise the reportable data fields and the UTI Guidelines by Q2 2022 and implement the revised requirements in Q2 2023.

MAS intends to adopt the ISO 20022 XML message format for OTC derivatives reporting to the trade repository.

The consultation, available here, is open for comment until 3 September 2021.

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