29 August 2019

On 26 July 2019, the Monetary Authority of Singapore (“MAS”) revised the “Guidelines on Margin Requirements for Non-Centrally Cleared OTC Derivatives Contracts” (“Guidelines”).

The Guidelines explain how MAS expects non-centrally cleared over-the-counter (OTC) derivatives contracts (“uncleared derivatives contracts”) to be margined. The Guidelines apply to any person exempt from holding a capital markets services licence under section 99(1)(a) or (b) of the Securities and Futures Act (“MAS Covered Entity”).

The revisions made to the Guidelines are highlighted here.

Applicability of exchange of margins to securities-based derivatives contracts

The Guidelines provide a list of the types of uncleared derivatives contracts to which the exchange of margins does not apply. The revised Guidelines now provide that the exchange of margins does not apply to a securities-based derivatives contract until 29 February 2020. Under the previous Guidelines (released on 5 October 2018), the exchange of margins would not have applied to securities-based derivatives contracts until 31 August 2019.

Arrangements in place for MAS Covered Entities approaching IM threshold of S$80,000,000

When undertaking the exchange of margins, an MAS Covered Entity may apply certain exclusions. One of these is an initial margin (“IM”) threshold of not more than S$80,000,000. This threshold is applied at the level of the consolidation group and is based on uncleared derivatives contracts subject to the provisions of the Guidelines between the two consolidation groups of the MAS Covered Entity and its counterparty respectively.

The revised Guidelines clarify that an MAS Covered Entity is not required to put in place documentation, custodial or operational requirements if the bilateral IM amount does not cross the IM threshold of S$80,000,000. However, when its exposure approaches the IM threshold, an MAS Covered Entity is expected to act diligently to ensure that the relevant arrangements needed are in place in the event that the IM threshold is exceeded.

Implementation schedule

Revised thresholds and phase-in dates for exchange of IM

The Guidelines set out the phase-in dates for the commencement of the exchange of IM in respect of uncleared derivatives contracts entered into with a counterparty that is an MAS Covered Entity or a Foreign Covered Entity (i.e. a person operating outside Singapore who, if operating in Singapore, would have been a person within the meaning of an MAS Covered Entity). The exchange of IM applies from each phase-in date where both the MAS Covered Entity and the counterparty each belongs to a consolidation group whose aggregate notional amount of uncleared derivatives contracts exceeds the respective thresholds. 


  • Phase-in date: 1 September 2019
    • Previous Guidelines: S$1.2 trillion 
    • Revised Guidelines: S$1.2 trillion (unchanged) 
  • Phase-in date: 1 September 2020
    • Previous Guidelines: S$13.0 billion
    • Revised Guidelines: S$80.0 billion (revised)
  • Phase-in date: 1 September 2021 for each subsequent 12-month period
    • Previous Guidelines: S$13.0 billion
    • Revised Guidelines: S$13.0 billion (unchanged)

Genuine amendments to legacy derivatives contracts

The Guidelines apply to new uncleared derivatives contracts entered into after the respective phase-in date that applies to an MAS Covered Entity. Genuine amendments to existing derivatives contracts do not qualify as a new derivatives contract. These include transactions arising from portfolio compression of existing derivatives contracts entered into before the commencement of the Guidelines. The revised Guidelines clarify that these further include any genuine amendments to legacy derivatives contracts pursued solely for the purpose of addressing interest rate benchmark reforms.

Reference materials

The Guidelines are available from the MAS website www.mas.gov.sg or by clicking here.


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