2018 Financial Markets Review

Executive Summary 2018 | Financial Markets Review National Treasury | South African Reserve Bank | Financial Sector Conduct Authority Executive Summary International cases of misconduct in wholesale financial markets have focused the attention of regulators and market participants on measures to (i) strengthen standards of market practice; and (ii) increase the accountability of financial institutions and individuals for the ethos and conduct of business. There is no indication of similar widespread misconduct in South African wholesale financial markets, but room for improvements in conduct and governance were identified by the 2012 review of the Johannesburg Interbank Agreed Rate (Jibar)-setting process and the 2015 Foreign Exchange Review (FX Review). The international focus on strengthening codes and standards in light of misconduct scandals means that South Africa cannot afford to be complacent. Therefore, South Africa’s financial sector authorities – National Treasury, the South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA) established the Financial Markets Review Committee (FMRC) to develop recommendations to reinforce conduct standards in wholesale financial markets focusing on (i) specific tools to strengthen the implementation and governance of conduct standards by market participants; and (ii) areas where changes to financial markets legislation and associated subordinate legislation are required to support a new conduct framework for wholesale financial markets. The work programme of the Financial Markets Review (FMR) project commenced in May 2017 under the auspices of the FMRC. The mandate of the FMRC as well as the chapter of the report that deals with the mandate is shown in the table below.