Singapore FX growth highlights importance of complete and accurate MAS derivatives reporting

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Singapore – Top three FX centres in the world

The latest Triennial Central Bank Survey of FX and OTC derivatives markets published by the Bank for International Settlements (BIS) makes for very interesting reading. In the survey, the BIS confirms that Singapore has retained its position as the third largest FX centre in the world behind the U.K and the U.S. Moreover, in the report the BIS confirms that Singapore’s share of global FX volumes rose to 9.5% in early 2022, up from 7.7% since the last BIS survey in 2019, which includes FX Swaps, Options and Forwards which are all reportable under the MAS derivatives reporting regime.

Why is it important to firms?

With Singapore in the top three FX centres in the world, it brings opportunities (commercial and technological), and of course risks. It also brings increased scrutiny from regulators and central banks as they have their own mandates for monitoring systemic risk, and that means that the quality of the reporting data will be more important than ever. This, as we know is part of a significant ongoing effort from the industry ever since reporting went live.

Reacting to the survey, MAS welcomed the growth and collaboration with the industry in Singapore in the FX space. As we know with any commercial or regulatory change there will be additional scrutiny of regulatory reporting, and this will be no different as we approach the 2024 rewrites including MAS, ASIC, EMIR (both EU and UK) and beyond. Firms should take more than just a note of these statements and factor the importance in planning and implementation for reporting rewrite go-lives.

So, what can firms do to keep up-to-date with regulatory obligations?

With the BIS survey and the MAS press release both highlighting the growing volume of the FX market in Singapore, there is a resulting effect on FX regulatory reporting requirements and as a result, more firms are impacted. It is important that firms continually test  their reporting data now and beyond the 2024 go-lives as regulators continue to use this information to monitor for systemic risks.

With data quality being a continual discussion point in the regulatory community, the opportunity also exists to not only test reporting data, but enhance a firm’s framework, which includes policies, procedures and improving knowledge through training which are all elements of a firm’s controls.  

So, as an industry, the concentration of FX flows in the region brings opportunities, but with such a huge volume of FX activity it’s clear that accurate and complete data is paramount for both firms and regulators. Firms need high quality controls to function properly and to enable accurate reporting. Regulators need accurate data reporting to supervise the markets and any excessive risks that are building up.

  • For a free healthcheck of the quality of your MAS reporting, or a conversation with Francesco about the topics above, please get in touch.