The National Credit Amendment Act (Debt Relief Act) was signed into law to provide overburdened, low-income, indebted consumers with relief. No commencement date has been proclaimed.
The conglomerate provisions of the Financial Sector Regulation Act (FSR Act) which provides a framework for the supervision of financial conglomerates in SA and empowers the Prudential Authority (PA) to designate entities as a financial conglomerate, and for the holding company of the financial conglomerate to also be subject to supervision in terms of the act became operative. The authorities have not yet designated any financial conglomerates.
Chapter 11 of the FSR Act, which deals with the regulation of significant owners of financial institutions, came into effect. Section 157 of the Act defines a significant owner of a financial institution as a person who directly/indirectly, alone or together with a related or inter-related person, has the ability to control/influence materially the business/strategy of the financial institution. The Act provides that a person must also obtain approval and/or notify the PA when the extent to which such person can control/influence the business/strategy of the financial institution changes. Transactions without the requisite approval and/or notification are void.
Following promulgated regulations to the Financial Markets Act (FM Act), market participants must comply with the new licensing regime, trade reporting and clearing requirements in respect of "over-the-counter" derivatives transactions. Market participants are now required to be licensed in accordance with Ch 2 of the FM regulations. The trade reporting and clearing requirements are not yet in force.
Insurance: The PA and the FSCA issued a guidance note on the application of S 5 of the Insurance Act. S 5(1) of the act provides that a person may not conduct insurance business in SA without being licenced in terms of the act. S 5(2) provides when it will be deemed that a person conducts insurance business in SA - with deeming provisions much wider than the corresponding provisions under the Long-Term & Short-Term Insurance
Acts and must be considered by entities providing services like insurance business offshore.
Banks: The Financial Sector Conduct Authority published a draft Conduct Standard applicable to banks operating within SA. Read more
The Minister of Finance determined that the provisions of the Banks Act do not apply to the New Development Bank (or BRICS Bank).
The definition of "public company" was expanded by the Financial Matters Amendment Act to include national state-owned companies. The amended Banks Act provides that a state-owned company may apply for authorisation to establish a bank only with the approval of the Finance Minister, granted with the concurrence of the Minister who is accountable for that state-owned company.
The PA of SARB released new reporting requirements for banks in relation to material information technology and cyber incidents. Banks must have more robust governance structures and notify the PA of any cyber incidents.
Payment Systems: The South African Reserve Bank (SARB) plans to reform the regulatory model of the SA National Payments System. Proposed reforms include: dismantling the Payments Association of SA as the payment system management body; the payment system being subject to greater supervision and more stringent licencing requirements; the market conduct aspect of the payment system being subject to the regulatory supervision of the Financial Sector Conduct Authority (FSCA) to the exclusion of the SARB; and reforming the regulatory environment so as to enable fintech payment providers and non-banks to better operate within the payments sector.