South Africa’s financial regulator is planning to set maximum limits on the assets used for securities trading as it seeks a unified approach to oversight of a multi-billion dollar market, reports Bloomberg.
Financial Sector Conduct Authority Commissioner Unathi Kamlana told Bloomberg the new draft standard “is pitched at a sufficiently high level to deal with all of the main risks around governance, risk management, reporting,” in line with international best practice.
South Africa’s repo market reforms present a dual-edged sword for fixed income investors, wrote AInvest in a recent article. “While regulatory tightening enhances stability and creates yield opportunities, it also introduces liquidity constraints and operational complexities. Investors must balance these factors by leveraging collateral efficiency, diversifying into non-traditional assets, and monitoring macroeconomic signals.
“As the SARB [South Africa Reserve Bank] navigates a fragile recovery, the fixed income market offers a compelling case for those willing to adapt to its evolving contours,” according to the article.