Market Practitioners Group (MPG)
While the SARB was initially at the forefront of the development of proposals on how the reform of interest rate benchmarks, including the JIBAR, could be achieved, the mandate for determining a market preferred choice of an alternative reference rate (also referred to as the preferred successor rate) to replace the JIBAR was given to the MPG.
The Market Practitioners Group (MPG) is a joint public and private sector group that was established by the SARB in 2019 to drive the reference rate reform programme in South Africa. The MPG is chaired by the deputy governor of the SARB responsible for financial markets and is organised in such a way that it comprises users of reference rates from different pockets of the market, including members of the savings industry, corporate treasuries, the banking sector and the official sector.
The MPG is a joint public and private sector body, comprising representatives from the SARB, the Financial Sector Conduct Authority (FSCA), and senior professionals from a variety of institutions from different market interest groups active in the domestic money market. The primary purpose of the MPG is to facilitate final decisions on the choice of interest rate benchmarks to be used as reference interest rates for financial and derivative contracts, and to direct market participants through an orderly transition towards the use of those benchmark rates.
The MPG relies on dedicated workstreams and technical subgroups to carry out its objectives. The workstreams and technical subgroups have a responsibility for providing technical input and recommendations to the MPG on specific issues that are relevant to the transition from JIBAR to ZARONIA.
The MPG established workstreams, each with a focus on the different aspects of the programme, with the responsibility to execute the mandate of the MPG. There are currently eight work streams, namely:
- Transition, Coordination and Planning Workstream
- Data Collection and Infrastructure Workstream
- Governance Workstream
- Communications Workstream
- Derivatives Workstream
- Cash Markets Workstream
- Legal Workstream
- Accounting and Tax Workstream
The MPG will remain in existence until the new benchmarks have been implemented and embedded, after which the Reference Rate Working Group of the Financial Markets Liaison Group (FMLG) will assume responsibility for further work on reference interest rates.