MAS issues guidelines for credit derivatives and securitisation

Alice Chan, Clifford Chance, Singapore

The Monetary Authority of Singapore (MAS) has issued guidelines for banks with respect to credit derivatives (MAS Notice 627) and asset securitisation (MAS Notice 628). The credit derivatives guidelines cover the capital treatment of credit default swaps, total rate of return swaps and the credit-linked note. The asset securitisation guidelines cover capital treatment of securitised assets, though these capital adequacy requirements do not apply to branches of foreign-incorporated banks. The asset securitisation guidelines also address disclosure and other requirements for banks, including branches of foreign-incorporated banks, involved in securitisation activities. The announcement of the guidelines and full text of MAS Notices 627 and 628 can be found on the MAS website.