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Comprehensive OTC derivatives compliance solution

OTC Compliance Solutions: From Licensing to Ongoing Compliance Support


What are OTC derivatives?

OTC (over-the-counter) derivatives are financial contracts traded directly between two parties, without the involvement of a central exchange or broker. These contracts are customisable to meet the specific needs of the parties involved. Common underlying assets for OTC derivatives include stocks, bonds, commodities, currencies, interest rates and market indexes.

Compliance obligations for OTC derivatives

Navigating the complex regulatory landscape of OTC derivatives can be challenging. The Financial Markets Act 19 of 2012, promulgated in June 2013, regulates financial markets and OTC derivatives in South Africa. This Act aims to improve OTC trading in derivatives, eliminate misleading and conflict-of-interest trading and prohibit insider trading and other market abuses.

What is an OTC Derivative Provider (ODP)?

An ODP is a person who as a regular feature of their business and transacting as principal:

  • originates, issues or sells OTC derivatives; or
  • makes a market in OTC derivatives.

ODPs can include financial service providers (FSPs), banks, insurance companies and any entity involved in significant OTC derivative transactions.

The Financial Markets Act requires ODPs to be licensed as FSPs. Additionally, they must adhere to specific regulations laid out by the Financial Sector Conduct Authority (FSCA). This includes maintaining adequate risk management frameworks, reporting obligations and capital adequacy requirements.

Learn more about OTC derivatives in a South African context.

Our OTC derivatives compliance services

We offer compliance services designed to help you meet your regulatory requirements and ensure smooth trading operations. Our team of Compliance Officers provides guidance on the Financial Markets Act and other relevant regulations. Our services include:

  • Assisting with the licensing process
    We help you navigate the licensing process, ensuring that you meet all regulatory requirements and obtain the necessary licence to operate in the OTC derivatives market.
  • Implementing robust compliance frameworks
    We work with you to develop and implement robust compliance frameworks that help you manage your trading activities effectively and avoid market abuses.
  • Ensuring adherence to relevant regulations
    Our team ensures that you adhere to relevant ODP regulations, including the Financial Markets Act, to maintain compliance and avoid penalties.
  • Managing reporting obligations
    We assist you in understanding and meeting the reporting obligations set out in the Financial Markets Act, ensuring that you provide accurate and timely reports to the relevant authorities.

Why choose Masthead for your OTC derivatives compliance needs?

Our team is dedicated to helping you navigate the compliance challenges associated with OTC derivatives. We understand the importance of compliance in the OTC derivatives market and are committed to providing you with the support you need to manage your trading activities effectively and avoid market abuses.

By choosing us, you benefit from:

  • Expert guidance: Our team has extensive experience in the OTC derivatives market and provides expert guidance on all aspects of compliance.
  • Tailored solutions: We offer tailored compliance solutions that meet the specific needs of your business, ensuring that you remain compliant with all relevant regulations.
  • Comprehensive support: We provide comprehensive support throughout the compliance process, from obtaining licenses to managing reporting obligations.

Contact us

Want to ensure that your OTC derivatives trading is fully compliant? Contact Masthead today to learn more about our tailored solutions and expert guidance.

WHO ARE WE

Established in 2004, Masthead (Pty) Ltd offers nationwide compliance and business support to independent financial advisors, corporate FSPs, credit providers, legal and property practitioners, and others. We help our clients navigate key regulations like FAIS, FICA, POPIA, and the National Credit Act. With a team of experts, we provide practical solutions across compliance, practice management, and business development to help businesses stay compliant and thrive. Masthead (Pty) Ltd is part of the Masthead Group, alongside Masthead Financial Planning (Pty) Ltd – a licensed FSP dedicated to supporting financial advisors with streamlined operational and regulatory solutions.

Why Masthead?

CONTACT US

Phone:

021 686 3588

E-mail:

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