South Africa: Financial Sector Assessment Program-Reforms in the OTC Derivatives Market-Technical Note
IMF Staff Country Reports, March 3, 2015
Source details
- Canonical URL
- South Africa: Financial Sector Assessment Program-Reforms in the OTC Derivatives Market-Technical Note
Other formats
Bibliographic details
- Published: March 3, 2015
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498393287.002
Summary findings
- The Technical Note analyzes over-the-counter (OTC) derivatives market reforms in South Africa and identifies vulnerabilities that may potentially impact financial stability.
- South Africa is committed to reform its OTC derivatives market to reduce vulnerabilities and increase transparency.
- Reforms are being implemented through the Financial Market Act and Regulations for banks, reflecting the Basel III capital requirements.
- Secondary legislation still needs to be finalized and will contain requirements for financial market infrastructures.
- Swift progress on the consultation and issuance of FMA regulations, trade repository regulations, and related notices are warranted to proceed with reforming the OTC derivatives market.
Analysis of vulnerabilities and reform focus
- Vulnerabilities in the OTC derivatives market are identified as having potential implications for financial stability (no quantitative magnitudes provided in the source text).
- Transparency and reduction of systemic vulnerabilities are the stated objectives of the reform program.
- Regulatory architecture: implementation route is the Financial Market Act and associated Regulations for banks, aligned with Basel III capital requirements.
- Financial market infrastructure (FMI) requirements are to be specified in secondary legislation that remains to be finalized.
Policy recommendations and next steps
- Continue and accelerate consultation processes for the Financial Market Act (FMA) regulations.
- Issue trade repository regulations and related notices promptly to support market transparency and oversight.
- Finalize secondary legislation to define and enforce requirements for financial market infrastructures, including central counterparty clearing houses and trade repositories.