On 17 September 2014, the Monetary Authority of Singapore (the “MAS”) announced that it has entered into a Memorandum of Understanding (the “MOU”) with the Australian Securities and Investments Commission (the “ASIC”).

The MAS and ASIC reached this MOU regarding cooperation arrangements to facilitate the access by each of them to information on derivatives contracts held in licensed trade repositories for the purpose of enabling them to fulfill their respective responsibilities and mandates, while ensuring that the privacy of that information is appropriately protected. This will contribute to the transparency, integrity, stability and effective regulation of derivatives markets.

MOU part of OTC derivative reforms

The signing of the MOU is a world-first for this type of arrangement and embodies the ongoing close cooperation between the ASIC and MAS on financial market issues, including the implementation of the Group of Twenty (the “G20”) over-the-counter (“OTC”) derivatives reforms. At the 2009 G20 Pittsburgh Summit, the Australian Government joined other jurisdictions in committing to substantial reforms to practices in OTC derivative markets. Three of the key G20 commitments in relation to OTC derivatives were:

  • reporting of all OTC derivatives transactions to trade repositories;
  • clearing of all standardised OTC derivatives through central counterparties; and
  • execution of all standardised OTC derivatives on exchanges or electronic trading platforms, where appropriate.

The overarching objectives of the OTC derivatives reforms are to:

  • enhance the transparency of transaction information available to relevant authorities and the public;
  • promote financial stability; and
  • support the detection and prevention of market abuse.

The MOU follows the licensing by the ASIC of DTCC Data Repository (Singapore) Pte Ltd, a trade repository established and licensed in Singapore.

The MOU came into force on 16 September 2014.

Reference materials

The MAS press release announcing the MOU is available on the MAS website www.mas.gov.sg by clicking here.

The following documents are available on the ASIC website www.asic.gov.au: