Singapore bourse mulls changes to derivative clearing liability

SINGAPORE, Sept 13 (Reuters) - Singapore Exchange said on Tuesday it is proposing to create a new system to limit the liability of members of its derivatives clearing service in the event other members default on their trades.

The bourse launched its clearing platform for over-the-counter derivatives last year, following global regulatory reforms that called for more products to be centrally cleared.

Banks that are members of the clearing house currently contribute to a central clearing fund that would be tapped in the event a party defaulted on a trade.

However, concerns have been expressed by banks about the scale of their liabilities if a number of defaults occurred in quick succession. SGX said it is proposing to create a mechanism that would limit its clearing members' default management liabilities.

The exchange will be accepting comments on its proposals until Oct 3. (Reporting by Rachel Armstrong; Editing by Matt Driskill)