April 08, 2019

The Financial Sector Conduct Authority and the Prudential Authority (Authorities), acting in concurrence with SARB, are proposing the revised draft joint standard on margin requirements for non-centrally cleared over-the-counter (OTC) derivative transactions. Also published are the consultation report, draft supporting statement on expected impact, and notice inviting submissions as contemplated in section 98(1) of the Financial Sector Regulation Act of 2017 (Act No. 9 of 2017) (FSRA). Comments are requested by May 20, 2019.

Based on the public consultation process during 2018 and following further internal discussions between the Authorities on the joint standard, the Authorities have effected certain amendments to the joint standard. The proposed amendments to the joint standard are substantial and require further public consultation pursuant to section 99 of the FSRA. The Authorities have developed the joint standard in line with the BCBS-IOSCO Framework to give effect to South Africa's commitment to making the OTC derivatives market safer and more transparent. The joint standard is closely aligned with the international standard to create a level playing field among market participants. However, incorporating the international standard into the domestic regulatory framework must be done in a manner that takes into account the nature of the domestic legal framework and the local market conditions. The international standard has, therefore, been appropriately customized in the joint standard to account for the local context.

 

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Comment Due Date: May 20, 2019

Keywords: Middle East and Africa, South Africa, Banking, Securities, Central Clearing, Margin Requirements, OTC Derivatives, SARB

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