5.2: Develop clearing house infrastructure
Legal and regulatory framework supportive of derivatives clearing in place.
The Capital Markets (Derivatives Markets ) Regulations 2015 is in place to address derivatives clearing.
Preliminary studies conducted by CMA and NSE in 2016. The TORs developed were harmonized with the Derivatives consultancy TORs to capture the survey.Phase 1 and 2 of the survey to establish the size of the OTC derivatives market was undertaken by the Authority's Derivatives Unit and completed in June 2018. Based on survey results assets subject to the use of risk products is Ksh. 12.5bn and Ksh. 48Bn (Minimum) for capital markets intermediaries and commercial banks respectively. A post-hoc analysis is ongoing to interrogate the quantum data further.
A concept paper on CCP was developed by the Authority in 2018 and is developing a policy paper to guide requirements for the establishment of CCPs by June 2019.
The current derivatives framework prescribes the structure.
NSE Clear approved as a CCP for Financial Derivatives.
Licensed derivatives exchanges’ settlement infrastructure is expected to follow a CCP model. Assessment for compliance will be carried out once the market is launched.