South Africa to finalize rules for $2.5T OTC derivatives market by 2028

South Africa’s two financial regulators are finally moving to require central clearing for over-the-counter derivatives, a reform the country committed to after the 2008 financial crisis. The Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) published Joint Communication 2 of 2026 on April 7, along with a discussion document laying out eligibility criteria for which OTC derivatives would need to be centrally cleared. A public consultation period is now underway. What’s actually changing The first products on the chopping block are South African rand-denominated interest rate swaps and forward rate agreements. These are the bread and butter of the country’s OTC derivatives market, and standardizing their clearing would bring South Africa in line with reforms that the US, EU, and other G20 nations implemented years ago. South Africa currently has no operational local central counterparty for OTC derivatives. Building or designating one is a prerequisite for the entire framework to function, and that infrastructure gap helps explain why these reforms have taken so long to materialize. Before clearing rules kick in, mandatory reporting to Strate, the country’s...