IRC Securities Overview
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Questions and Answers

Who is responsible for determining the contract specifications of IRC securities?

  • JSE trading members
  • Market analysts
  • JSE Executive (correct)
  • Financial regulatory authority
  • What action can the JSE NOT take regarding futures and option contracts?

  • Set contract specifications independently (correct)
  • Amend existing conditions
  • Notify trading members of additions
  • Remove futures and option contracts from the list
  • In what scenario must the JSE specify an expiry date for a futures or option contract?

  • If the expiry is less than six months
  • For all futures and option contracts
  • If the expiry is longer than one year (correct)
  • When members request it
  • What is a consequence of the JSE suspending an IRC security from its list?

    <p>The JSE must publish reasons for the suspension</p> Signup and view all the answers

    What types of derivatives are included in the IRC securities as stated?

    <p>Interest rate and currency derivatives</p> Signup and view all the answers

    What is required from the JSE when they add or remove a futures or option contract?

    <p>To inform all trading members</p> Signup and view all the answers

    What type of public communication may the JSE employ related to IRC securities?

    <p>Authorizing newspapers to publish statements</p> Signup and view all the answers

    What is one of the measures the JSE may take when determining contract specifications of IRC securities?

    <p>Conducting surveys and research</p> Signup and view all the answers

    What is one of the main advantages of using the JSE's Interest Rate Derivatives Market?

    <p>It reduces counterparty credit risk</p> Signup and view all the answers

    Which of the following is NOT listed as an Interest Rate Derivative in the JSE's market?

    <p>Equity Futures</p> Signup and view all the answers

    Who can actively participate in trading Interest Rate Derivatives according to the outlined requirements?

    <p>Market participants who comply with JSE requirements</p> Signup and view all the answers

    What type of surveillance does the JSE conduct on Interest Rate Derivative transactions?

    <p>Real-time surveillance</p> Signup and view all the answers

    In what way can traders execute trades in the JSE's Interest Rate Derivatives Market?

    <p>Through on-screen and off-screen trades</p> Signup and view all the answers

    Which financial instruments fall under the category of Short Term Interest Rate Futures (STIRs) as stated by the JSE?

    <p>Jibar Futures</p> Signup and view all the answers

    What does the JSE require from members who wish to trade within the Interest Rate Derivatives Market?

    <p>Compliance with specific trading requirements</p> Signup and view all the answers

    What kind of derivatives can be found on the JSE within the category of Long Term Interest Rate Futures (LTIRs)?

    <p>Swap Futures</p> Signup and view all the answers

    What may the JSE do with futures and option contracts in relation to their listing?

    <p>Either add, remove, or suspend contracts</p> Signup and view all the answers

    What must the JSE do when it imposes new conditions on futures and option contracts?

    <p>Inform trading members about the action and specify an effective date</p> Signup and view all the answers

    When may the JSE publish conclusions or findings regarding an investigation?

    <p>At its discretion on matters it considers advisable</p> Signup and view all the answers

    Which factor is NOT considered by the JSE when determining contract specifications for IRC securities?

    <p>Feedback from the public about past contracts</p> Signup and view all the answers

    What is a potential outcome of the JSE suspending an IRC security?

    <p>A public notification is issued regarding the suspension</p> Signup and view all the answers

    What does the JSE specify when the expiry date of a futures or option contract exceeds one year?

    <p>The exact expiry date must be specified</p> Signup and view all the answers

    What type of communication may the JSE utilize to inform the public about changes to IRC securities?

    <p>Publications in newspapers or periodicals</p> Signup and view all the answers

    Which of the following actions regarding the IRC securities is at the discretion of the JSE?

    <p>Deciding how to notify members about removals</p> Signup and view all the answers

    What reduces counterparty credit risk in the JSE's Interest Rate Derivatives Market?

    <p>Margining and clearing by JSE Clear</p> Signup and view all the answers

    Which of these is a requirement for market participants looking to trade in the Interest Rate Derivatives Market?

    <p>They must comply with JSE's Interest Rate and Currency market requirements</p> Signup and view all the answers

    What is included in the list of Interest Rate Derivatives according to JSE guidelines?

    <p>Index futures</p> Signup and view all the answers

    Which aspect of trading in the Interest Rate Derivatives Market provides functionality for booking trades?

    <p>On- or off-screen trade execution capabilities</p> Signup and view all the answers

    Who can act as a client to trade in the Interest Rate Derivatives Market?

    <p>Clients of members who comply with JSE requirements</p> Signup and view all the answers

    Which of the following is NOT a listed interest rate derivative on the JSE?

    <p>Convertible Bonds</p> Signup and view all the answers

    What primary action is taken by the JSE to ensure fair pricing of Interest Rate Derivative transactions?

    <p>Real-time surveillance of transactions</p> Signup and view all the answers

    What type of market members can potentially participate in the JSE's Interest Rate Derivatives Market?

    <p>Brokers, banks, and asset managers</p> Signup and view all the answers

    Study Notes

    IRC Securities Overview

    • JSE maintains the list of IRC securities under section 11(8)(a) of the Financial Markets Act.
    • Interest rate derivatives available for trading include various futures and options on government and state-owned company debt.

    Types of Interest Rate Derivatives

    • Futures and Options: Based on government debt and State-owned company debt, including Bond Futures, Bond Options, and Index Futures.
    • Short-term Interest Rate Futures (STIRs): Includes Jibar Futures.
    • Long-term Interest Rate Futures (LTIRs): Includes Swap Futures.

    Trading Execution and Risk Management

    • Interest Rate Derivatives can be booked through both on-screen and off-screen methods.
    • All positions are margined and cleared by the JSE Clear, minimizing counterparty credit risk.
    • Real-time transaction surveillance is conducted by the JSE regulatory team to ensure compliance and fair pricing.

    Market Participation

    • Active trading participation is open to individuals or entities that comply with JSE's market requirements.
    • Clients may trade through members who are compliant, such as brokers, banks, and asset managers.

    Contract Specifications

    • JSE determines contract specifications for IRC securities, which may change based on market research and member feedback.
    • Specific expiry months for futures and options contracts are decided and published by the JSE.

    Listing and Adjustments

    • JSE can add, remove, or suspend futures and options from the list of IRC securities as necessary.
    • Notification of any changes or conditions regarding contracts is provided to trading members by the JSE.

    Investigations and Notifications

    • The JSE has the authority to remove or suspend IRC securities and to investigate dealings.
    • Reasons for actions taken regarding listing status or investigations are published, ensuring transparency.

    IRC Securities Overview

    • JSE maintains the list of IRC securities under section 11(8)(a) of the Financial Markets Act.
    • Interest rate derivatives available for trading include various futures and options on government and state-owned company debt.

    Types of Interest Rate Derivatives

    • Futures and Options: Based on government debt and State-owned company debt, including Bond Futures, Bond Options, and Index Futures.
    • Short-term Interest Rate Futures (STIRs): Includes Jibar Futures.
    • Long-term Interest Rate Futures (LTIRs): Includes Swap Futures.

    Trading Execution and Risk Management

    • Interest Rate Derivatives can be booked through both on-screen and off-screen methods.
    • All positions are margined and cleared by the JSE Clear, minimizing counterparty credit risk.
    • Real-time transaction surveillance is conducted by the JSE regulatory team to ensure compliance and fair pricing.

    Market Participation

    • Active trading participation is open to individuals or entities that comply with JSE's market requirements.
    • Clients may trade through members who are compliant, such as brokers, banks, and asset managers.

    Contract Specifications

    • JSE determines contract specifications for IRC securities, which may change based on market research and member feedback.
    • Specific expiry months for futures and options contracts are decided and published by the JSE.

    Listing and Adjustments

    • JSE can add, remove, or suspend futures and options from the list of IRC securities as necessary.
    • Notification of any changes or conditions regarding contracts is provided to trading members by the JSE.

    Investigations and Notifications

    • The JSE has the authority to remove or suspend IRC securities and to investigate dealings.
    • Reasons for actions taken regarding listing status or investigations are published, ensuring transparency.

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    Description

    This quiz covers the list of IRC securities that can be traded on the IRC markets according to the IRC Rules. It includes various interest rate derivatives such as futures and options on government debt, as well as STIRs and LTIRs. Test your knowledge on the role of the JSE and the specifics of these financial instruments.

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