Financial Markets Act, 2012 (Act No. 19 of 2012)

Regulations

Financial Markets Act Regulations

Chapter VI : Central Counterparties

38. Collateral requirements

38.3 Re-use of collateral collected as initial margin
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A licensed central counterparty—

(a)may only once re-hypothecate the collateral collected as initial margin with the consent of the client;
(b)must have rules regarding the use of collateral, which rules must clearly specify when the central counterparty may re-use the collateral, segregation of the collateral and the process of returning the collateral; and
(c)in general may not rely on the re-use of collateral as an instrument for increasing or maintaining its profitability however it may invest any cash collateral received from participants on their behalf.