Singapore – Regulatory Developments

Singapore – Regulatory Developments

Presented byMohammad NizamDeputy Director and Head, Market Conduct Policy DivisionMonetary Authority of SingaporeDate10 Aug 2005

Market Overview: SGX-DT

05

10

15

2025

30

35

40

2000 2002 2004

Volume(contracts inmillions)

Volume

Products

Top 5 Contracts

equity index futures/options, interest rate futures, single stock futures

Nikkei 225, MSCI Taiwan Index, Euroyen, MSCI Singapore, and Mini Japanese Government Bonds

Market Overview: Other Recognised Markets

NYMEX

IPE London Ltd

Tradeweb Europe Ltd

Brokertec USA LLC

Bloomberg Tradebook

Brokertec USA LLC

CME Inc

Euronext Paris SA

Garban LLCMarketaxess Europe

Market Overview: OTC Derivatives Market

Daily Average turnover of USD 17 billion

2nd largest market in Asia

12th largest market globally

Fair, Efficient Market and Sound Infrastructure

Regulatory Objective:

Principles:

Business Friendly, Promoting Growth

Regulatory Developments

1) Enhancing the Regulatory Framework

2) Regulation of Commodities Futures and OTC Derivatives

3) Infrastructure Developments

1) Enhancing the Regulatory Framework

Designation Approach for Clearing Facilities

•Definition of “clearing and settlement” includes entire value chain

•Designation Regime: Risk Based. Default “Yes”; MAS only designates and regulate when necessary

MASBefore

•Approval Regime: “No” till MAS says “Yes”

• “Clearing and settlement” not defined

MASAfter •Lower cost•Start Biz Faster

1) Enhancing the Regulatory Framework

Classification of Markets

Before: Approved Exchange

ReTS (assumes certain biz models)

Approved ExchangeRMOs (allows new

biz models and regulatory flexibility)

After:

2) Keeping an Eye on …

Commodities Futures

OTC DerivativesMarket: Not regulated. Will there be a need in the future?

Clearing and Settlement: How are we to regulate clearing members?

MAS-SFA

IE Sg-CTA

Commodities Futures

3) Infrastructure Development

Move to pit to E-trading

- SGX Quest (integrated trading engine)

Facilitates audit trail

Thank You