The exemption of Banks in respect of financially sophisticated and high-wealth corporate clients, referred to as the Merchant Banking Exemption (BN 103 of 2004), was extended by FAIS Notice 35 of 2023 until 30 June 2025.

The clients covered under the Exemption include other banks, central banks, insurers (life and non-life insurers), asset managers who have confirmed to the satisfaction of the bank that the market value of the assets managed by them will exceed R1 billion, and other persons (included in the definition of client in section 1(1) of the Banks Act but excluding individuals, pension funds, friendly societies and medical schemes) whose net asset value exceeds R20 million.

The Merchant Banking Exemption allows banks, mutual banks, branches of foreign banks or representative offices as defined in section 1(1) of the Banks Act, 1990, to provide financial services to those clients, without having to perform the services in the manner required by the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act).  The Exemption recognises that the clients have an appropriate level of financial know-how and expertise, negating the need for financial advice and the other consumer protection afforded by the FAIS Act.

The Notice of amendment of Exemption can be accessed here..