Reed Smith Client Alerts

In this second instalment of our four-part guide to commodities regulation in Singapore, we outline the reporting obligations which Singapore-based trading entities may become subject to in respect of their over-the-counter (OTC) derivatives trading activities.

Auteurs: Hagen Rooke Peter Zaman Carolyn Chia (Resource Law LLC),  Tania Teng (Resource Law LLC)

The Singapore rules for the reporting of OTC derivatives transactions represent one of the frameworks introduced pursuant to G20 reform initiatives, alongside others such as mandatory clearing and trading of OTC derivatives, margin requirements for non-centrally cleared derivatives, and risk mitigation requirements. These reporting requirements are particularly relevant to the commodities sector, as they apply to Singapore-resident entities which are not licensed by the Monetary Authority of Singapore but which book or trade an annual gross notional amount of more than S$8 billion in specified derivatives (Significant Derivatives Holders). This places a regulatory compliance obligation on Significant Derivatives Holders, and requires other entities to put in place controls allowing them to ascertain that they have not exceeded the threshold.