By Bridget King, Cliffe Dekker Hofmeyr
The latest draft margin requirements for non-centrally cleared OTC derivatives was published under the auspices of the Financial Markets Act, No 19 of 2002 (Margin Requirements) on 8 August 2017, significantly amending the previous draft of the Margin Requirements circulated in July 2015.
Whilst most of the proposed changes will be welcomed by ODPs, ODPs will need to carefully consider any deficiencies in this draft of the Margin Requirements and have their comments and submissions collated by 8 September 2017.
A copy of the Margin Requirements for non-centrally cleared derivatives is available at – https://www.fsb.co.za/Departments/capitalMarkets/Pages/Documents-for-Consultation.aspx, together with the Financial Services Board’s response documents and formal press release.
Unfortunately, the types of OTC trades which will be subject to the mandatory clearing requirements under the FMA, have yet to be prescribed.
It also remains to be seen what will become of the draft margin requirements published late last year under the auspices of a Bank’s Act directive from the Registrar of Banks (Bank Margin Requirements). Banks and affected ODPs are cautioned to monitor developments from the Registrar of Banks office, although it seems unlikely that any further Bank Margin Requirements will be circulated.