Second Draft of the Ministerial Regulations under the Financial Markets Act (FMA)

Call for comments opened 05 June 2015 Share this page:

Submissions are now closed (since 06 July 2015)

Finance Standing Committee

The National Treasury, the Reserve Bank and the Financial Services Board has published a second draft of the ministerial regulations under the Financial Markets Act (FMA), and is asking you to comment.

“The draft ministerial regulations support the objects of the FMA and South Africa’s commitment to the G20 obligations in terms of regulatory reforms for over the-counter [OTC] derivatives markets,” National Treasury said.

The department said it is important that South Africa meets the G20 reform commitments and implements stronger measures to avoid the effects similar to those experienced in the 2007 financial crisis

“Issuing the ministerial regulations will address uncertainties in the regulatory framework for OTC derivatives and move South Africa a step closer to meeting its commitments,” National Treasury said.

The ministerial regulations were initially published on 4 July 2014 for the first round of consultation and a two-month timeframe was provided within which any comments on the published regulations were to be submitted.

Subsequently, the comments received were reviewed and a second draft of the ministerial regulations has been compiled taking into account those comments received.

The second draft of the ministerial regulations achieves the following:

▪ Extends the regulations to the OTC derivatives markets and the participants and enables the registrar to enforce rules and supervise the OTC derivatives market participants.
▪ Provides for market infrastructures such as central counterparties (“CCP”) to be licensed and supervised and to perform the functions and duties specified under the Act.
▪ Provides for the external market participants to enter the South African financial markets and in particular proposes a recognition framework for external participants.
▪ Provision of transitional arrangements to allow market participants to comply with the proposed requirements in the draft regulations.

The second draft of ministerial regulations must be read with the discussion document explaining the regulations and board notices issued by the Financial Services Board. A comments matrix with the responses has also been issued.

Comments can be submitted via email to financial.policy@treasury.gov.za with the subject title FMA: Ministerial regulations (Round 2). The deadline for submissions is on Monday, 6 July 2015.

Copies of the policy document and the regulations can be found on the National Treasury website at www.treasury.gov.za