REGULATORY REFORM IN OTC DERIVATIVES

Course Details

This one-day course covers the five main pillars of regulatory reform which have been implemented in the OTC derivatives market, and how institutions are adjusting to comply with these new regulations. The key area of focus will be on reforms in the SA market, but a high-level overview of the European and US regulations will also be touched upon. 1. Central clearing and higher capital requirements for non-centrally cleared trades 2. Reporting to trade repositories 3. Collateral 4. Conduct standards 5. Central trading platforms Audience: This course will benefit a broad range of people, from those working in the legal and compliance space, to business and trade personnel, as well as operations teams who have to establish the systems to support regulatory reform. Agenda: The global & South African regulatory landscape pre-2008 & where it has moved to post-2008 Recommendations to the SA market to strengthen the current regulations (G20 & IOSCO) A brief overview of clearing: what clearing is, how a CCP is structured, collateral through a CCP How the clearing arrangement is documented from a legal perspective (CDEA Agreement) What products does clearing apply to? How does the CCP protect against counterparty default? Benefits & risks of a CCP Margining for cleared transactions Segregation of collateral at the CCP Porting cleared transactions Benefits & risks of central clearing Trade repositories & the reporting rules The regulatory requirements for variation margin, and initial margin, for uncleared derivatives under the Financial Markets Act Which entities & products are in-scope for the margin rules Initial margin & variation margin Setting up systems to manage variation margin & initial margin Collateral management as a key focus of the regulatory requirements Authorising OTC derivative providers The Conduct Standard 2 for authorised ODPs Central trading platforms – the rationale for them & whether they will be mandatory in SA Standardisation in the OTC derivatives market – LEI numbers, confirmations, product-identifying numbers Issues with the new regulatory landscape