Regulatory Alerts2019-12-05
Joint Communication 4 of 2019: Requirements Relating to Central Counterparty Licence Applications
The Financial Sector Conduct Authority and Prudential Authority have published draft regulatory frameworks outlining licensing requirements for domestic central counterparties, external central counterparties, and external trade repositories. These proposals establish a joint standard for licence applications, a determination for external entity approvals, and an equivalence framework to assess foreign regulatory alignment with South African financial markets legislation. Stakeholders are invited to submit written comments on all three drafts by 21 February 2020 to shape the final prudential and conduct standards.
# Financial Markets Act, 2012 (Act No. 19 of 2012)
# Financial Sector Regulation Act, 2017 (Act No. 9 of 2017)
# Joint Communication 4 of 2019
## DRAFT JOINT STANDARD ON REQUIREMENTS RELATING TO CENTRAL COUNTERPARTY LICENCE APPLICATIONS, DRAFT DETERMINATION RELATING TO EXTERNAL CENTRAL COUNTERPARTY OR EXTERNAL TRADE REPOSITORY LICENCE APPLICATIONS AND DRAFT EQUIVALENCE FRAMEWORK
The Financial Sector Conduct Authority (FSCA) and Prudential Authority (PA) today publish various frameworks pertaining to separate, but related processes. These publications are set out in more detail below.
### 1. DRAFT JOINT STANDARD – REQUIREMENTS RELATING TO CENTRAL COUNTERPARTY LICENCE APPLICATIONS
#### 1.1
The FSCA and PA publish a draft Joint Standard: Requirements relating to central counterparty licence applications proposing requirements relating to central counterparty licence applications (draft Joint Standard).
#### 1.2
The draft Joint Standard is accompanied by a –
- Statement explaining the need for, expected impact and intended operation of the draft Joint Standard (Statement); and
- comments template.
#### 1.3
The draft Joint Standard, together with the Statement and comments template are available on the FSCA and PA websites at [https://www.fscs.co.za](https://www.fscs.co.za) and [https://www.resbank.co.za/PrudentialAuthority/Pages/default.aspx](https://www.resbank.co.za/PrudentialAuthority/Pages/default.aspx).
#### 1.4
Interested parties are invited to, in writing, submit comments on the draft Joint Standard and Statement using the comments template available on the FSCA and PA websites, on or before 21 February 2020 to the FSCA at FSCA_RFDStandards@fscs.co.za for the attention of Mr Eugene Du Toit and PA-Standards@resbank.co.za for the attention of Ms Lyle Horsley.
### 2. DRAFT DETERMINATION – REQUIREMENTS RELATING TO EXTERNAL CENTRAL COUNTERPARTY OR EXTERNAL TRADE REPOSITORY LICENCE APPLICATIONS
#### 2.1
The FSCA has published a draft Determination proposing requirements relating to external central counterparty or external trade repository licence applications (draft Determination).
#### 2.2
The draft Determination is available on the FSCA’s website at [https://www.fscs.co.za](https://www.fscs.co.za).
#### 2.3
Interested parties are invited to, in writing, submit comments on the draft Determination using the comments template available on the FSCA website, on or before 21 February 2020 to FSCA_RFDStandards@fscs.co.za for the attention of Mr Eugene Du Toit.
### 3. DRAFT EQUIVALENCE FRAMEWORK
#### 3.1
The FSCA has published a draft Equivalence Framework which has the purpose of setting out the FSCA’s approach to determining that the regulatory framework of a foreign jurisdiction is equivalent to the regulatory framework established in terms of the Financial Markets Act, 2012 (Act No. 19 of 2012).
#### 3.2
The documents informing the Equivalence Framework that is published include:
- A document titled “Draft Equivalence Framework for External Trade Repositories, External Central Counterparties and External Central Securities Depositories”, including the following Annexures supporting the aforementioned document:
- Annexure I: Application by external trade repositories or external central counterparties for an equivalence recognition of the applicant’s home regulatory framework in terms of section 6A(1) of the FMA;
- Annexure A: Equivalence assessment for external trade repositories;
- Annexure B: Equivalence assessment for external central counterparties; and
- Annexure C: Equivalence assessment for external central securities depositories; and
- Draft FSCA Communication * of 2019 (FMA) - Equivalence Recognition in the Republic of South Africa.
#### 3.3
The draft Equivalence Framework and all supporting documents are available on the FSCA’s website at [https://www.fscs.co.za](https://www.fscs.co.za).
#### 3.4
Interested parties are invited to, in writing, submit comments on the draft Determination using the comments template available on the FSCA website, on or before 21 February 2020 to FSCA_RFDStandards@fscs.co.za for the attention of Mr Eugene Du Toit.
Requests for further information about this Joint Communication may also be sent to any of the above email addresses.
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**ABEL SITHOLE**
FINANCIAL SECTOR CONDUCT AUTHORITY
Date: 04/12/2019
**KUBEN NAIDOO**
PRUDENTIAL AUTHORITY
Date: 3 DECEMBER 2019
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