In recent years, there have been several regulatory changes in global post-trade services. The JSE’s clearing house, JSE Clear, has worked tirelessly to adhere to the latest global standards and legislative requirements.
In 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 market participants.
JSE Clear, as part of its compliance obligations, adheres to the requirements of the CPSS-IOSCO disclosure framework. One of the stipulations of this framework, is that the outcomes of a financial market infrastructure (FMI’s) self-assessment should be made publicly available.
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) complies with the principles and provisions of the CPSS–IOSCO report. This report 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 FMIs report, only 20 are 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 four of these principles and deemed to be “partially observed” in terms of the remaining two 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 is classified as a third-county central counter party (TCCP), authorising it to provide clearing services to European market participants. The authorisation process was undertaken in close collaboration with our local regulator the Financial Services Board (FSB), now FSCA.
ESMA recognition strengthens the global relevance of JSE Clear, and more importantly, ensures that multinational banks can continue to clear in the South African market. This ensures that our local financial market promotes financial stability while reducing risk and contributes to South Africa’s credibility and ability to attract international investment.