Central counterparty clearing

But we also provide, um, clearing services within our collateral management infrastructure.

So TriParty is the largest single venue for treasury financing, and there what we do is we provide the infrastructure so that buyers and sellers or borrowers and lenders can come together and do repo transactions and centrally clear those, and by that I mean that we have arrangements with different CCPs, so the Fixed Income Clearing Corporation has long been a CCP in the Treasury market.

There are now two additional CCPs in the Treasury market, ICE and CME, and both of them are also using our settlement services in our TriParty infrastructure.

So as a client, you can come onto that TriParty platform.

You can do a trade with your counterparty, and you could really clear it through any one of those three CCPs because each one of them is providing clearing models on our, on our global collateral or TriParty platform.

And what we're seeing is a lot of innovation in that space because those CCPs are thinking a lot about, "How can I lower the cost of clearing? C- How can I get that risk management benefit that the market is looking for, um, to take that counterparty credit risk away, but also reduce the amount of margin, reduce the amount of capital that's associated with clearing those transactions?" So a lot of innovation in this space.

Um, we also serve as a financing counterparty, um, direct, directly conducting repo with, uh, counterparty participants, and our capital markets area is actually one of the larger repo mark- centrally cleared repo participants in the marketplace.

Mm-hmm.

Maybe I should explain what a central counterparty is.

Uh, a central counterparty, or CCP, is essentially a trusted middleman between buyers and sellers in, in a financial market.

So once a trade is agreed, uh, the CCP steps in between the two parties, becoming the buyer to the seller and the seller to the buyer.

And what that does is reduces counterparty risk and gives participants greater confidence to trade and, and then ultimately support safer, more resilient and efficient, uh, financial markets.

Alex, what does this latest regulatory approval mean for the services that the JSE is then able to offer? We know, of course, that as the leading stock exchange on the African continent, there are a lot of expectations and requirements that sit on the JSE's shoulders, but also that it presents an opportunity for the JSE to offer these sorts of services to international markets and make markets more accessible to international investors.

Yeah, that's right.

Um, so, so firstly, you know, why does, uh, central clearing enhance, uh, risk management? Uh, today in the bond markets, uh, uh, the trading is largely bilateral and, and participants manage the risk with each of their counterparts separately.

Uh, CCP risk management brings that together and centralizes that, so you have one place continually monitoring exposures, collecting collateral, preparing for defaults.