The European Securities and Markets Authority (ESMA) has terminated clearing recognition for JSE Clear, the Johannesburg-based central counterparty, following South Africa’s addition to the anti-moneylaundering (AML) blacklist.
This move, in accordance with the requirements of the European Market Infrastructure Regulation (EMIR), will mean that JSE Clear will no longer qualify to provide clearing services to trading venues or clearing members established in the European Union.
This results from the European Commission’s decision to add South Africa to the list of high-risk third countries on 16 July as a result of perceived shortcomings in the country’s AML and counter financing of terrorism (CFT) provisions.
EMIR specifies that for a third-country CCP to be recognised by ESMA, the country must meet all cumulative conditions specified under Article 25(2) of the regulation, including the requirement that the country does not appear on an AML blacklist under the AML Directive.
ESMA has instructed a three-month adaptation period for this change to take place, meaning that JSE Clear’s third-country CCP recognition will lapse on 29 December 2023.
JSE Clear is a wholly-owned subsidiary of JSE Ltd providing central counterparty clearing services for JSE’s derivatives markets.
