South Africa: Proposed eligibility criteria for mandatory central clearing of over-the-counter derivative transactions

On 7 April 2026, the Prudential Authority of the South African Reserve Bank and the Financial Sector Conduct published the joint discussion document on the proposed eligibility criteria for mandatory central clearing of over-the-counter (OTC) derivative transactions (Joint Discussion Document), for public comment. It outlines the development of a regulatory framework for central clearing in South Africa.  

The purpose of the Joint Discussion Document is to communicate proposals by the Authorities in relation to:

• the eligibility criteria to be applied by the Authorities in determining which OTC derivative transactions will be subject to mandatory central clearing; and
• the proposed OTC derivative transactions identified as potentially suitable for mandatory central clearing based on the current data and information available to the Authorities.

In developing the proposals set out in the Joint Discussion Document, the Authorities consulted a variety of sources (including local legislation, approaches in comparable jurisdictions, research conducted by relevant standard-setting bodies as well as internationally and locally generated research reports). In the Joint Discussion Document the Authorities now seek public and industry engagement in order to align with South Africa’s G20 commitments.

Based on currently available information, the Authorities have identified South African rand denominated interest rate swaps and forward rate agreements as the initial instruments for mandatory clearing, pending further industry engagement and the availability of a suitable licensed local or international central counterparty (CCP) (the Joint Discussion Document notes that there is currently no operational CCP in South Africa to clear OTC derivative transactions).

Upon the completion of the Authorities’ consultation process on the proposals set out in the Joint Discussion Document, the Authorities will publish a determination by way of a joint notice setting out the eligibility criteria for mandatory central clearing of OTC derivative transactions in South Africa, which will be issued by the FSCA with the concurrence of the PA in terms of regulation 4(1) of the Financial Markets Act Regulations, 2018 (FMA Regulations).   

Once the eligibility criteria have been determined in accordance with the FMA Regulations, the Authorities will also develop a joint standard to prescribe where and how OTC derivative transactions will be cleared through a licensed CCP or a licensed external CCP. Accordingly, mandatory central clearing is expected to take effect following the evaluation of all the relevant industry consultations and the consequential policy processes by the Authorities, and once the joint standard is in effect and a licensed CCP or clearing house is operational.

All interested parties other than OTC derivative providers are invited to submit comments on the proposals by using the feedback template published alongside the Joint Discussion Document as Annexure A. OTC derivative providers are invited to submit their comments on the proposals by completing the questionnaire attached to the Joint Discussion Document as Annexure B. All comments must be submitted to the Authorities via email at [email protected] and [email protected] by no later than 5 June 2026.

For ease of reference, the Joint Discussion Document together with the templates for public comments are available here.