South Africa is tightening oversight of OTC derivatives, introducing new clearing and capital rules to curb systemic risk.
South Africa’s Financial Sector Conduct Authority (FSCA) is preparing sweeping reforms to the country’s over-the-counter derivatives market to reduce systemic risks and strengthen supervision. FSCA Commissioner Unathi Kamlana said the regulator plans to mandate central clearing for products such as interest-rate and foreign-exchange swaps, repos, and forwards, aiming to improve transparency in a market valued at 44.7 trillion rand ($2.6 trillion).
Non-bank OTC derivatives providers will also face tougher capital requirements under the new framework, aligning their treatment with banks and discouraging riskier trades outside the banking sector. The FSCA noted that the proposals, expected within three years, will be subject to industry consultation.
South Africa already has licensed infrastructure in place, including JSE Clear as a central counterparty and Strate as a transaction repository, both set to play key roles in the reforms.
Separately, the FSCA warned against a fraudulent WhatsApp investment scheme falsely claiming ties to the Johannesburg Stock Exchange, urging investors to remain vigilant.
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