FSCA Consults on Capital Markets and Conduct Proposals

Posted 01 April 2026 Written by Acts Online
Category Financial Sector

Brought to you by SA Legal Academy: The Financial Sector Conduct Authority (FSCA) has invited public comment on four distinct regulatory proposals aimed at enhancing market integrity and prudential oversight within the South African capital markets.

In terms of the Financial Sector Regulation Act, No. 9 of 2017 and the Financial Markets Act, No. 19 of 2012, the FSCA is seeking input on draft documents that will significantly alter the reporting and capital obligations for various financial market participants. The proposals cover the following areas:

  • Benchmarks framework: This third round of public consultation addresses the governance and administration of financial benchmarks. The deadline for input is 6 May 2026.
  • Capital requirements for non-bank over-the-counter (OTC) derivative providers: These proposals seek to establish specific financial adequacy standards for entities not regulated under banking prudential frameworks. The deadline for input is 12 May 2026.
  • Short sales reporting and disclosure requirements: This draft standard introduces mandatory reporting protocols for short positions to improve market transparency. The deadline for input is 15 May 2026.
  • Market infrastructures: Currently in its third round of consultation, this framework affects the operational and regulatory requirements for exchanges, central securities depositories, and clearing houses. The deadline for input is 26 May 2026.

Regulatory Context and Compliance

The proposed standards are intended to align South African financial markets with international best practices, particularly regarding the transparency of short selling and the systemic risk management of OTC derivatives. The Financial Markets Act, No. 19 of 2012 provides the primary legislative basis for these conduct standards, which aim to ensure that market infrastructures and participants operate in a fair, efficient, and transparent manner.

What this means for you, your business, or your clients

  • For yourself: No direct individual obligations; impact is channelled through firm-level compliance and the requirement to provide technical advisory on the new reporting standards.
  • For your business: Non-bank OTC derivative providers must conduct a gap analysis against the proposed capital requirements to determine if additional liquidity or capital reserves will be required to meet the new prudential thresholds.
  • For your clients: Clients engaged in short selling activities must prepare for mandatory disclosure of net short positions to the FSCA, requiring an update to internal trade monitoring and reporting systems.

Originally published at https://legalacademy.co.za/news/read/capital-markets-fsca-calls-for-input-on-raft-of-proposals

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