Deadline Approaching: MAS Reporting Expands Scope to Include FX

The Monetary Authority of Singapore (MAS) has expanded its regulatory reporting scope to include FX, commodity, and equity OTC derivative contracts, and firms under MAS regulation are preparing for the reporting before October 1 2021, the deadline, which has been postponed for one year from 2020 due to the pandemic.

Insurers, subsidiaries and other financial market licensees are required to report on the activities with further asset classes, under the new rules of MAS. While others like banks, which have been reporting on these before, are probably required to make changes to their additional clients base under the expanded regulatory scope.

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Sophie Gerber, a director at TRAction Fintech, believes that MAS' expansion is a part of its aim to align itself with international reporting standards.

"I have seen surveys lately that show self-reporting (by FX brokers) at 40%, 12% delegated and 48% a combination of both, but that’s for the broader market and the survey was a likely somewhat skewed as it was performed by the trade repository itself. From our experience I would estimate it to be 85% delegated in the forex and CFD market," the CEO of TRAction, Quinn Perrott, has elaborated on the reporting of FX market in an exclusive interview with Fazzaco​ in April.

With the new rules in place, a number of MAS-regulated firms are faced with pressure from several challenges. Reporting on the newly included derivative contracts for the first time poses the gravest challenge.

The trade volume has seen some drastic soar-up across markets since the Covid breakout, and now the massive data are likely to result in reporting errors that would end up in fines as the deadline approaches.

Sophie Gerber suggested that firms report via third parties to touch base with their delegate ASAP, ensuring "your systems are equipped to extract the additional data required to report foreign exchange, commodity, and equity OTC derivative contracts before the deadline," she said.

According to TRAction, a number of their existing clients who have presence in jurisdictions that have implemented similar reporting rules, including ASIC, HKMA, EMIR and MiFIR, are assisting with their MAS-regulated entities.

DTCC, a U.S-based financial service provider, being the only MAS-authorized trade repository, poses yet another challenge, according to Gerber, since the company is not facilitating the use of reporting aggregators, which means the reporting firms, as well as their delegates, all have to be onboard with DTCC.