[Section 48 heading substituted by section 290, item 27(a) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]
| (a) |
subject to the requirements prescribed by the Minister, have sufficient assets and resources, which resources include financial, management and human resources with appropriate experience, to perform its functions as set out in this Act; |
| (b) |
have governance arrangements that are clear and transparent, promote the safety and efficiency of the clearing house or central counterparty, and support the stability of the broader financial system, other relevant public interest considerations, and the objectives of relevant stakeholders; |
| (c) |
demonstrate that the fit and proper requirements prescribed in the relevant joint standards are met by the applicant, the licensed clearing house or the licensed central counterparty, as the case may be, members of its controlling body and senior management; |
| (d) |
comply with the requirements prescribed in the joint standards for the clearing or settlement of transactions in securities, or both; |
| (e) |
implement an effective and reliable infrastructure to facilitate the clearing of securities cleared by the clearing house or central counterparty; |
| (f) |
implement effective arrangements to manage the material risks associated with the operation of a clearing house or central counterparty; |
| (g) |
have made arrangements for security and back-up procedures to ensure the integrity of the records of transactions cleared, settled or cleared and settled through the clearing house or central counterparty; and |
| (h) |
in relation to an applicant for an independent clearing house licence, a central counterparty licence, a licensed independent clearing house or a licensed central counterparty, have made arrangements for the efficient and effective supervision of clearing members so as to ensure compliance with the clearing house rules and clearing house directives and this Act. |
[Section 48(1) substituted by section 290, item 27(b) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]
(1A) Subject to subsection (1) and the regulations prescribed by the Minister, a central counterparty must—
| (a) |
implement a margin system that establishes margin levels commensurate with the risks and particular attributes of each product, portfolio, and market it serves; |
| (b) |
collect and manage collateral held for the due performance of the obligations of clearing members or clients of clearing members; |
| (c) |
establish and maintain a default fund to mitigate the risk should there be a default by a clearing member and to ensure, where possible, that the obligations of that clearing member continue to be fulfilled; |
| (d) |
maintain initial capital as prescribed, including an appropriate buffer; |
| (e) |
have a clearly defined default waterfall where the obligations of the defaulting clearing member, other clearing members and the central counterparty are legally and clearly managed; |
| (f) |
provide an appropriate segregation and portability regime to protect the positions of clients of a defaulting clearing member; and |
| (g) |
provide the necessary infrastructure, resources and governance to facilitate its post trade management functions and, in the event of default of one or more of the clearing members— |
| (i) |
ensure that sufficient risk policies, procedures and processes are in place; and |
| (ii) |
have sound internal controls for robust transaction processing and management. |
[Section 48(1A) inserted by section 290, item 27(c) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]
| (a) |
require an applicant, a licensed clearing house or licensed central counterparty to furnish such additional information, or require such information to be verified, as the Authority may deem necessary; |
[Section 48(2)(a) substituted by section 290, item 27(d) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]
| (b) |
take into consideration any other information regarding the applicant, a licensed clearing house or licensed central counterparty, derived from whatever source, including any other supervisory authority, if such information is disclosed to the applicant or a licensed clearing house and the latter is given a reasonable opportunity to respond thereto; and |
[Section 48(2)(b) substituted by section 290, item 27(d) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]
| (c) |
prescribe any of the requirements referred to in subsection (1) in greater detail. |
(3)
| (a) |
Despite subsection (1), requirements prescribed under this section that are in force immediately before the commencement of this subsection continue to be in force. |
| (b) |
In respect of regulations prescribed in terms of subsection (1)(a), the Minister may repeal regulations, and new requirements may then be prescribed in joint standards or conduct standards. |
| (c) |
Paragraph (b) does not affect or limit the power of the Minister to prescribe or amend regulations in terms of subsection (1)(a). |
| (d) |
Requirements prescribed in terms of subsection (1)(c) or (2)(c) before the commencement of this subsection may be amended or repealed by conduct standards or joint standards. |
[Section 48(3) inserted by section 290, item 27(e) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]
National Environmental Management Act, 1998 (107 of 1998)
