Financial Markets Act, 2012 (Act No. 19 of 2012)RegulationsFinancial Markets Act RegulationsChapter II : Requirements for the Regulation of OTC Derivatives4. Clearing |
| (1) | The Authority may, with the concurrence of the Prudential Authority— |
| (a) | determine eligibility criteria for OTC derivative transactions to be subject to mandatory clearing; and |
| (b) | conduct assessments into other categories of OTC derivative transactions upon which additional mandatory clearing requirements could be based. |
| (2) | An authorised OTC derivative provider must ensure that an OTC derivative transaction determined by the Authority in terms of subregulation (1) as eligible for clearing, is cleared through a licensed central counterparty or a licensed external central counterparty in the manner prescribed by the Authority. |
| (3) | In making a determination in terms of subregulation (1), the Authority must have regard to— |
| (a) | the suitability of the OTC derivative transaction for clearing, and other relevant considerations, such as the level of contractual and operational standardisation, volume and liquidity of the relevant OTC derivative transactions; |
| (b) | the effect on the efficiency, integrity and stability of the South African financial system; |
| (c) | the interconnectedness between counterparties to the relevant classes of OTC derivative transactions and the impact on the levels of counterparty credit risk; |
| (d) | the resources and suitability of the central counterparty available to clear the relevant OTC derivative transactions; |
| (e) | the impact on the competitiveness of the South African market of imposing a clearing requirement in relation to the relevant OTC derivative transactions; and |
| (f) | any other matters that the Authority considers relevant. |