CMFAS RES 2B OTC Derivatives: Reporting, Clearing, Margin & Trading Rules question: trading mandate cover USD

CMFAS RES 2BOTC Derivatives: Reporting, Clearing, Margin & Trading Rules

Why does the trading mandate cover USD, EUR and GBP swaps but not SGD swaps?

A SGD swaps cannot legally be traded on electronic platforms under the SFA
B MAS mandated trading only where venue liquidity existed; SGD swap liquidity was bilateral
C SGD swaps are already cleared, which MAS treats as meeting the trading mandate
D The EU and US require it, and MAS followed their currency lists for equivalence

Show the answer and explanation

Answer: B. MAS mandated trading only where venue liquidity existed; SGD swap liquidity was bilateral

MAS's approach is liquidity-driven. Its 2018 consultation said products with a limited domestic or regional liquidity pool may not suit a trading obligation, whereas globally traded USD, EUR and GBP swaps already trade on platforms under US and EU mandates. So SGD swaps are cleared (the clearing mandate covers SGD, USD, EUR and GBP swaps) but were left out of the trading mandate.

Common mistake

Different pillars, different currency lists: SGD swaps are cleared but not trade-mandated.

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Related CMFAS RES 2B questions

A retail customer fails the Customer Knowledge Assessment but insists on buying a structured OTC derivative. The licensee may proceed only if Ms Rahim signed the account opening forms for a leveraged foreign exchange account with Bedok Futures on 3 February and traded that same afternoon. The firm emailed her the risk disclosure document on 10 February asking her to sign and return it, which she did on 12 February. What is the position?A representative at a bank (an exempt financial institution) deals in OTC derivatives with clients. Which statement is CORRECT?

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Original study material mapped to the public CMFAS RES 2B syllabus. Unofficial, not endorsed by MAS or IBF. Verify figures and rules against current guidance before relying on them.