G8/2016: Margin Requirements for Non-Centrally Cleared Derivatives

[Logo: South African Reserve Bank] South African Reserve Bank From the Office of the Registrar of Banks

Ref.: 15/8/2 G8/2016

2016-12-19

To banks, branches of foreign institutions, controlling companies, eligible institutions and auditors of banks or controlling companies

Guidance Note 8/2016 issued in terms of section 6(5) of the Banks Act, 1990

Margin requirements for non-centrally cleared derivatives

Executive summary

During the past few years this Office held extensive discussions with all relevant key players regarding the implementation of margin requirements for non-centrally cleared derivatives.

On 23 November 2016, this Office issued a proposed directive related to the proposed implementation on 1 January 2017 of margin requirements for non-centrally cleared derivatives, inviting comments to be submitted to this Office by no later than 2 December 2016.

Based on the comments received from various key players, it has been decided to delay the implementation of margin requirements for non-centrally cleared derivatives to a date later than 1 January 2017.

1. Introduction

1.1 On 18 March 2015 the Basel Committee on Banking Supervision (Basel Committee) and the International Organization of Securities Commissions (IOSCO) issued the revised framework for margin requirements for non-centrally cleared derivative instruments.¹

1.2 Subsequently this Office and various other authorities or persons held discussions with all relevant key players regarding the appropriate incorporation of the revised framework for margin requirements for non-centrally cleared derivative instruments into the respective legislative frameworks.

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¹ Available online at https://www.bis.org/bcbs/publ/d317.htm

PO Box 8432 Pretoria 0001 • 370 Helen Joseph Street Pretoria 0002 • South Africa • Tel +27 12 3133911/0861 12 7272 • Fax +27 12 3133758 • www.reservebank.co.za

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1.3 In this regard, on 23 November 2016, this Office issued a proposed directive related to the proposed implementation on 1 January 2017 of margin requirements for non-centrally cleared derivatives, inviting comments to be submitted to this Office by no later than 2 December 2016.

1.4 This Office wishes to express its sincere appreciation for the ongoing discussions held to date with all relevant key players and for the comments submitted in respect of the proposed implementation on 1 January 2017 of margin requirements for non-centrally cleared derivatives.

2. Decision to delay implementation

2.1 Based on the comments received from various key players it has been decided to delay the implementation of margin requirements for non-centrally cleared derivatives to a date later than 1 January 2017.

2.2 This Office will inform all relevant persons of the revised implementation date of margin requirements for non-centrally cleared derivatives in due course.

3. Acknowledgement of receipt

3.1 Two additional copies of this guidance note are enclosed for use by your institution’s independent auditors. The attached acknowledgement of receipt duly completed and signed by both the chief executive officer of the institution and the said auditors should be returned to this Office at the earliest convenience of the aforementioned signatories.

[Signature] R H Urry Deputy Registrar of Banks

The previous guidance note issued was Guidance Note 7/2016, dated 2 August 2016.