Regulatory Alerts2013-12-19
D14/2013: Transitional arrangements for capital requirements on over-the-counter derivatives not transacted through a central counterparty
The South African Reserve Bank’s Office of the Registrar of Banks issued Directive 14/2013 to implement transitional capital requirements for over-the-counter derivatives not cleared through a central counterparty. From 1 January to 31 December 2014, banks must treat South African rand-denominated and locally bilateral OTC derivatives as bilateral trades, calculating default risk capital normally while holding zero percent capital for credit valuation adjustment risk. Institutions must report these adjusted exposures on form BA 200 and return signed acknowledgements to the Registrar, ensuring full compliance with existing regulations without altering other capital requirements.
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