Regulatory Alerts2019-04-08
Joint Standard on Margin Requirements for Non-Centrally Cleared OTC Derivatives
The Prudential Authority and Financial Sector Conduct Authority of South Africa have issued a Joint Standard implementing international margin requirements for non-centrally cleared over-the-counter derivative transactions. The regulation mandates financial firms and systemically important non-financial entities to exchange initial and variation margin based on phased aggregate notional thresholds ranging from R30 trillion down to R100 billion between 2019 and 2023. This framework adapts the BCBS-IOSCO standards to local market conditions while aiming to mitigate counterparty credit risk and reduce systemic vulnerabilities in the domestic financial sector.
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