On 1 April 2019, the European Commission recognized a number of Singapore trading venues authorized by the Monetary Authority of Singapore (MAS) as eligible for compliance with the EU trading obligation for derivatives. This decision will allow EU counterparties, essentially EU investment banks that operate as swap dealers in Asia, to comply with their EU trading obligation under the Markets in Financial Instruments Regulation (MiFIR) and in line with the G20 reforms for standardized derivatives when executing derivatives transactions with counterparties in Singapore.
Concurrently, MAS adopted regulations to exempt certain EU Multilateral Trading Facilities and Organized Trading Facilities from MAS’ markets licensing requirements. Singapore participants can trade with EU counterparties on such EU trading venues in compliance with Singapore’s derivative trading obligations.
Two weeks earlier on 13 March 2019, the Commodity Futures Trading Commission (CFTC or Commission) and MAS announced the mutual recognition of certain derivatives trading venues in the United States and Singapore. The CFTC issued an order exempting certain derivatives trading facilities regulated by MAS from the requirement to register with the CFTC as swap execution facilities (SEFs). Similarly, MAS announced the issuance of regulations exempting certain derivatives trading venues regulated by the CFTC from the requirement to be a MAS-authorized approved exchange (AE) or recognized market operator (RMO) before establishing or operating an organized market.
These agreements will help strengthen cross-border trading, enabling businesses in Singapore and the US and EU to hedge risks more efficiently.
(Source: Business Times; Monetary Authority of Singapore)