Topic: Banking

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Islamic finance update – new draft governance standards

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is an independent Islamic international non-profit body that prepares accounting, auditing, governance, ethics and Shariah standards for Islamic financial institutions and the industry. AAOIFI is respected in the industry and their governance standards are used by many firms globally. The AAOIFI central Shariah board has … Continue reading

Nuclear New Build Programme announced

On 14 December 2016, the Minister of Energy, in consultation with the National Energy Regulator of South Africa (NERSA), published the Department of Energy’s determination notice for the Nuclear New Build Programme (Nuclear Programme). The Minister announced that 9 600MW of energy capacity should be procured and generated from nuclear energy under the Nuclear Programme. … Continue reading

The perils of rushing into bond foreclosure proceedings

Banks should be careful about rushing into bond foreclosure proceedings, when the arrears owed are not significant. Instead, the bank should try to engage with the consumer and see if a settlement can be negotiated to prevent foreclosure and the consumer losing their home. In FirstRand Bank Limited v Makaleng, Mr Makaleng was in arrears … Continue reading

Proposed amendments to the JSE Derivatives Rules and Directives

The Financial Services Board, acting in terms of the Financial Markets Act 2012, has published proposed amendments to the JSE Derivatives Rules and Directives. The proposed amendments deal with: The buying and selling of derivative securities; and Derivative transactions that take place off the JSE’s Automatic Trading System (ATS). The ATS is the computerised facility which … Continue reading

Blockchain – our Uber takes on syndicated lending and secondary market trades

In our previous articles in this series we argued that banks can create new markets for themselves in trade finance by providing digitised letters of credit or trade finance instruments for the movement of both digital and physical goods using blockchain. We also highlighted the fact that Barclays, together with the Israeli start-up Wave, may … Continue reading

The LNG-to-Power IPP Procurement Programme Information Memorandum

An information memorandum on the liquefied natural gas (LNG) to power independent power producers procurement programme was published by South Africa’s Department of Energy (DoE) on 5 October 2016. The purpose of this memorandum is to describe the scope of the LNG-to-power IPP Programme for prospective and interested bidders and to highlight the opportunities the programme … Continue reading

Blockchain – in the real world of trade and commodity finance, how will this Uber work?

In our last article in this series we argued that banks can create new markets for themselves in trade finance by providing digitised letters of credit or trade finance instruments for the movement of both digital and physical goods using blockchain. We likened the ease of transacting in this way to the simplicity of ordering … Continue reading

Acceleration clauses and prescription

If a loan is repayable in instalments and includes an acceleration clause that if the debtor defaults on paying any instalment, the creditor is entitled on notice to terminate the loan agreement and claim the full balance outstanding, the debt ordinarily only prescribes three years after the date of the notice claiming the full outstanding … Continue reading

New NCA regulations prescribing maximum interest rates and service and initiation fees come into force as court application fails

The new regulations prescribing the maximum rates of interest, initiation fees and service fees that credit providers can charge come into effect on 6 May 2016. An urgent application by Micro Finance South Africa (MFSA) to stay the implementation of the new regulations pending the outcome of an application to set aside the Minister of … Continue reading

Shareholder has no claim for company’s loss

A plaintiff who was a shareholder in a liquidated company sued the company’s bank for a R50 million loss in value of his indirectly held shareholding allegedly caused by intentional conduct of the bank for lending money beyond the means of the company and then liquidating the company. The delictual claim for pure economic loss failed … Continue reading

What is a simulated transaction?

The Supreme Court of Appeal has reminded us that a simulated transaction is one where all the parties to the intended contract disguise the true nature of the transaction. Where one party fraudulently causes the other party to enter into a transaction different from what they thought it was, it is an invalid transaction, not … Continue reading

Insist on clear court orders that affect you

All laws and court orders must be written in a clear and accessible way. Vague laws or court orders violate the rule of law, which is a founding principle of our Constitution. In Minister of Water and Environmental Affairs v Kloof Conservancy, the Supreme Court of Appeal set aside part of a court order because it … Continue reading

South African renewable energy programme: benefits of local community investments

In order to ensure that the construction and operation of renewable energy projects in South Africa is not hampered by unsatisfied local communities it is important that borrowers’ and sponsors’ alike invest in educating local communities on how they derive benefit from the projects. Since our article of September 2014 (Renewable energy projects: community related … Continue reading

Doing Business in South Africa, 2016

The World Bank’s Doing Business Report is eagerly awaited each year as an indicator of the ease of doing business in various economies around the world. Released in October 2015, this year’s report presents data for 189 economies and aggregates information from ten areas of business regulation (such as starting a business, getting credit and … Continue reading

Challenges to banking and tech: data and cybercrime

The proliferation of data gives rise to two challenges: Companies need to manage the vast amounts of data they now control and turn it to useful purposes. The availability of so much data has been an ideal environment for an explosion of various forms of cybercrime. Data The role of data scientists and analytic technology … Continue reading

Letters of credit: silent confirmations do not strip an honouring bank’s rights as nominated bank under UCP 600

The court in Greenhill International Pty Ltd v Commonwealth Bank of Australia confirmed that silent confirmations of letters of credit fall outside the Uniform Customs and Practice for Documentary Credits 600 (UCP 600) and are governed purely by the express and implied terms agreed to by the paying bank and the beneficiary. However, the court … Continue reading

Arbitrations hit by moratorium on legal proceedings in business rescue

Overturning a lower court judgment, the appeal court has found that arbitrations are included in the general moratorium on legal proceedings against companies under business rescue in section 133(1) of the Companies Act 2008. In Chetty v Hart, the Supreme Court of Appeal looked at the meaning of the phrase “legal proceedings” in section 133 in relation … Continue reading