Over the past few years, there has been an upsurge in regulatory changes in post-trade services worldwide and the JSE’s clearing house JSE Clear, have worked tirelessly to ensure that it adheres to these latest global standards and legislative requirements.
In December 2012, JSE Clear (then SAFCOM), became the first clearing house in the world to achieve CPSS-IOSCO (Committee on Payment and Settlement Systems - International Organisation of Securities Commissions) compliance (a global standard for risk management) with the support of our market and we are very proud of this achievement.
JSE Clear, as part of its compliance obligations, is required to adhere to the requirements of the CPSS-IOSCO disclosure framework, where one of the stipulations of this framework, is that the outcomes of a (FMI’s) self-assessment should be structured for public disclosure.
This is briefly outlined below, with the summary of the self-assessment covered in the pdf under the heading “IOSCO disclosure framework”
As a member of the G-20, South Africa (and its respective FMIs) is committed to comply with the principles and provisions of the CPSS–IOSCO report, as it is an integral part of the G-20’s efforts to enhance the stability and integrity of financial markets.
Of the 24 principles that form part of the CPSS-IOSCO “Principles for Financial Market Infrastructures” (FMI’s) report, only 20 are considered to be relevant to JSE Clear due to the nature of its operations. Having completed the 2016 self-assessment exercise, JSE Clear is rated as “observed” across 14 of these principles, “broadly observed” across 4 of these principles and deemed to be “partially observed” in terms of the remaining 2 applicable principles. JSE Clear is thereby considered to be fully compliant with the requirements put forth by IOSCO for Central Counter Parties (CCPs).
The most recent JSE Clear CPSS IOSCO self-assessment was submitted to the Financial Service Conduct Authority (FSCA) in December 2018 and JSE Clear awaits the outcome of that assessment from the Regulator.
IOSCO disclosure framework
FSB approval of JSE Clear as a qualifying central counterparty for listed derivatives
European Securities and Markets Authority (ESMA) recognition
JSE Clear has been granted the status of a “third-county CCP” (TCCP), meaning that it has been authorised to provide clearing services to market participants based in the EU. This project was undertaken in close collaboration with our local regulator the Financial Services Board (FSB), now FSCA, and we would like to thank them for the material role they played in the recognition process.
ESMA recognition strengthens the global relevance of JSE Clear, and more importantly, ensures that multinational banks can continue to clear in the SA market. We see this as an important part in ensuring our local financial market meets global benchmarks and continues to promote financial stability and reduce risk. This milestone will contribute towards South Africa’s credibility and will help to attract flows from abroad to SA.