MAS rolls out key schemes to bolster SORA adoption

It will issue SORA-based floating rate notes monthly, amongst other plans.

The Monetary Authority of Singapore (MAS) has rolled out new initiatives to support the adoption of the Singapore Overnight Rate Average (SORA) in a bid to catalyse greater activity and boost market confidence, according to an announcement.

The regulator will issue SORA-based floating rate notes (MAS FRN) monthly, starting from 21 August, to expand its range of money market instruments used to manage system liquidity. It looks to facilitate the adoption of SORA as a floating rate benchmark, provide a pricing reference for cash products, and spur hedging activities through the SORA derivatives market.

MAS will also improve transparency and data availability, including the daily publishing of key statistics, compounded rates for one-month, three-month, and six-month tenors, and a SORA index that will help calculate compounded rates over specified periods.

The third initiative is SORA being prescribed as a financial benchmark under the Securities and Futures Act (SFA) to ensure that regulatory and enforcement powers, including criminal and civil actions, can be taken against any market misconduct.

Lastly, MAS has issued a statement of compliance with the IOSCO Principles for Financial Benchmarks for SORA after recent methodological updates broaden its representativeness.

These initiatives complement the industry-led transition roadmap set out by the Steering Committee for SOR Transition to SORA (SC-STS).

Also read: CapitaLand, OCBC ink Singapore's first SORA-based loan