Implementation of UTI reporting
As part of efforts by the Monetary Authority of Singapore (MAS) to facilitate the aggregation of over-the-counter (OTC) derivatives data through standardisation and harmonisation of data elements, reporting entities will have to report the UTI which is uniquely assigned to each reportable OTC derivatives contract1.
Additionally, where an OTC derivatives contract is reported more than once due to requirements under the SF(RDC)R and reporting requirements in a foreign jurisdiction, the same UTI will have to be used for such reporting purpose2.
The UTI should also remain as the identifier of the OTC derivatives contract throughout the life cycle of the contract3.
On 31 May 2024, MAS issued guidelines to the SF(RDC)R and updated the frequently asked questions on the SF(RDC)R to explain and provide further guidance on the revised SF(RDC)R.
Changes to reportable data fields in First Schedule to the SF(RDC)R
Critical OTC derivatives data
To assist MAS in monitoring risks in the OTC derivatives market and to facilitate global reporting as closely as possible, the First Schedule to the SF(RDC)R will be updated. The revisions will align with the definitions and allowable values for common data fields set out under the technical guidance on critical OTC derivatives data elements published by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions, as well as with data fields required by other authorities.
Unique product identifier
The global unique product identifier (UPI) (a code generated by the Derivatives Services Bureau) will be adopted to facilitate the global harmonisation of OTC derivatives reporting and standardisation of contract identification.
The role of the UPI is to uniquely identify the product involved in any OTC derivatives transaction that an authority requires, or may require in the future, to be reported to a trade repository.
While the UPI is expected to contain reference data elements representing information on the OTC derivative instrument’s type, characteristics and elements of the underlier, the current reporting requirements will remain unchanged. Any revisions to remove the reporting requirements for these data fields will be subject to a subsequent review by MAS4.
Adoption of ISO 20022 XML standard
To ease regulatory monitoring, a single standard for OTC derivatives reporting to the trade repository will be adopted. Accordingly, the ISO 20022 XML message format will be used for OTC derivatives reporting from 21 October 2024 onwards5.
Treatment of existing OTC derivatives contracts and exemptions
The new requirements (i.e., the above requirements on UTI reporting, the changes to reportable data fields in the First Schedule to the SF(RDC)R and adoption of the ISO 20022 XML standard) will come into effect on 21 October 2024 and apply to outstanding OTC derivatives contracts as at such date (unless the contract has a maturity of less than six months from 21 October 20246 or is otherwise exempted).
MAS has acknowledged the feedback from the industry on practical difficulties in procuring historical information on OTC derivatives contracts that have already been executed. Accordingly, MAS has provided for an exemption for the reporting of any information that was not required to be reported when the specific OTC derivatives contract was executed7.
Any changes to the existing reportable data fields for any outstanding OTC derivatives contracts (e.g., amendments, reporting errors, termination or expiry) must be reported under the new format within two business days of the variation8.
Conclusion
MAS expects each reporting entity to establish internal policies and arrangements commensurate with the scale of its business to ensure it obtains UTIs in a timely manner9.
Where applicable, reporting entities should also engage with their service providers and counterparties to OTC derivatives contracts to ensure compliance with the updated OTC derivatives contracts reporting regime. In particular, entities should implement measures for the orderly re-reporting of outstanding OTC derivatives contracts with a maturity of at least six months as of 21 October 2024.
- Paragraph 1.2, consultation paper on proposed amendments to the SF(RDC)R.
- Paragraph 3.1, guidelines to the SF(RDC)R.
- Paragraph 3.4, guidelines to the SF(RDC)R.
- Paragraph 3.9, response to public consultation on proposed amendments to the SF(RDC)R.
- Paragraph 5.3, response to public consultation on proposed amendments to the SF(RDC)R.
- Paragraph 4.8, response to public consultation on proposed amendments to the SF(RDC)R.
- Paragraph 4.9, response to public consultation on proposed amendments to the SF(RDC)R
- Paragraph 4.10, response to public consultation on proposed amendments to the SF(RDC)R.
- Paragraph 2.20, consultation paper on proposed amendments to the SF(RDC)R.
Client Alert 2024-127
