MAS and European Securities and Markets Authority to cooperate on CCPs

To let local CCPs provide clearing services to EU participants and trading venues.

The Monetary Authority of Singapore (MAS) and the European Securities and Markets Authority (ESMA) have inked a Memorandum of Understanding (MOU) to establish cooperation arrangements regarding Central Counterparties (CCPs) in Singapore that have applied for recognition under the European Markets Infrastructure Regulation.

The MOU fulfils a pre-condition for ESMA to recognise CCPs in Singapore to provide clearing services to European Union (EU) participants and trading venues.

ESMA-recognised CCPs in Singapore can soon be used by EU market participants to satisfy their mandatory clearing obligations under EU law.

EU banks will also enjoy lower capital charges for their clearing exposures to these recognised CCPs. To date, Singapore Exchange Derivatives Clearing Limited, The Central Depository (Pte) Limited and ICE Clear Singapore have applied to ESMA for recognition.