04 April 2018, Asian Private Banker
The Monetary Authority of Singapore (MAS) has finalised its requirements on how banks should report their trades activities in different currencies under the guidelines outlined in its “Notice 610” to banks, which will come into effect this month.
The MAS 610 overhaul is considered one of the most significant revisions of Singapore banking regulations in recent years. It will introduce greater automation in banks’ reporting activities with the Singaporean regulator, while helping the MAS to obtain more comprehensive data from banks, thereby improving its supervisory efficacy.
Banks will see a significant increase in the information they need to report to the regulator under the new guideline, requiring them to up the level of digitisation in their regulatory reporting activities, even as the change may help them streamline the related workflows.
However, according to a latest regulatory letter sent to the industry dated 28 March obtained by Asian Private Banker, banks will be given some leeway in meeting the new requirements for their domestic transactions.
To help the industry meet the requirements on the system changes and comply with the new reporting requirements, the MAS said in the letter it would not press its proposals on Singapore dollar transactions in banks’ DBU book before 31 March 2020.
“So long as banks submit accurate data to MAS, they may continue to maintain their [Domestic Banking Unit] and [Asian Currency Unit] books or systems if they assess that they will not be able to merge their books or systems within the implementation timeline,” the letter said.
Abraham Teo, global head of tax products & head of product management (APAC) of AxiomSL, told Asian Private Banker that it is feasible for banks to comply with the new MAS 610 standards without making significant changes in their internal operating systems.
This may be the case if a bank’s existing regulatory reporting solution can take data non-intrusively from the bank systems and perform trade data consolidation.
“This is especially true for smaller banks who might not have the resources or bandwidth to accomplish two very major changes in the finance world at the same time,” Teo added.
Under the MAS’s existing requirements, banks are currently required to run a standalone book for domestic trades, while Asian or global trading activities should be recorded separately. Most banks have accounting systems which book trades into either one of these books, typically by SGD, to DBU and other currencies to ACU.
“As the Singapore financial industry matured, the need for this split has gone away over time. MAS has been slowly removing the requirement for this split from any new regulatory guidelines and forms they have released, and the new MAS 610 is no exception,” Teo said.
The MAS first outlined its latest requirements in a consultation in February last year, having received some 800 responses from the industry.
This article was originally published by Asian Private Banker.