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EXECUTIVE SUMMARY
PK2 was a collaborative initiative with numerous stakeholders, including members of the Intergovernmental Fintech Working Group (IFWG) and the industry.
The project was driven by the SARB’s Fintech Unit and the other core team members included Accenture and Block Markets Africa as technical service providers, with Deloitte as the support partner. Active participants included Absa, FirstRand, Nedbank, Standard Bank and JSE Limited (JSE). The insights from the various role players contributed to technical and design components of PK2, and ultimately allowed for a deeper understanding of the potential implications of digitalisation in the financial markets.
PK2 demonstrated that building a platform for a tokenised security would impact the incumbents in the financial markets ecosystem, particularly that the number of intermediaries could be reduced and some of the functions performed by existing infrastructures could be collapsed onto a single platform, which could lead to
reduced costs and reduced complexity. However, there are several legal, policy and regulatory implications which may arise from a possible financial market structure, which include a platform, built on DLT, that allows for tokenised securities to be issued on it. To the extent that a new infrastructure or platform performs similar roles and related functions to regulated entities, such new offering could be covered under existing legislative and regulatory frameworks. The challenge remains where current legislation does not cater for emerging innovation in its current market structure. The learnings from PK2 provide a solid foundation to explore the design of the relevant regulatory frameworks in order to be agile and adaptive on the one hand; and on the other hand, putting in place the necessary components of a framework that supports public policy objectives, enhances the safety and efficiency of the financial system and advances investor protection outcomes.
8 PROJECT KHOKHA 2