Desiree Reddy (ZA)

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Updates to licensing requirements for crypto asset FSPs

By Desiree Reddy (ZA) on May 16, 2023 Posted in Finance

On 19 October 2022, the FSCA published the final Declaration of a Crypto Asset as a Financial Product (Declaration) under the Financial Advisory and Intermediary Services Act, 2003 (FAIS Act) – see detail here. Together with a policy document setting out the thinking behind the Declaration, and an overview of applicable transitional provisions, the FSCA … Continue reading

First Regulatory Actions Report published

By Desiree Reddy (ZA) on April 20, 2023 Posted in Finance

On 18 April 2023, the Financial Sector Conduct Authority published its first Regulatory Actions Report, covering the period 1 April 2022 to 31 March 2023. The Report highlights enforcement action taken during the reporting period, with a view to not only deterring unlawful conduct, but also to create awareness of regulatory requirements. Some of the … Continue reading

South Africa’s grey-listing: what it means, how did we get here and what are the effects?

By Desiree Reddy (ZA) and Sabeeha Kathrada on February 25, 2023 Posted in General

In an unfortunate, but expected turn of events, global money-laundering and terrorist-financing watchdog – the Financial Action Task Force (FATF) – announced on Friday 24 February that it has added South Africa to its “grey” list – as a jurisdiction under increased monitoring. What does this mean, how did we get here, and how does … Continue reading

Regulation on Crypto Assets – Part 2

By Desiree Reddy (ZA) on October 20, 2022 Posted in Finance

Following on from our earlier blog on the declaration of crypto assets as financial products under the FAIS Act (the Declaration) we have received numerous queries on the transitional arrangements relevant to the new licensing regime, and the impact of the Declaration on crypto asset derivatives. Transitional arrangements Specific concerns have been raised regarding whether … Continue reading

Regulation on Crypto Assets

By Desiree Reddy (ZA) and Ntokozo Ngubane on October 20, 2022 Posted in Finance

In general notice 1350 of 2022, effective as of 19 October 2022, the FSCA has formally declared a crypto asset as a financial product under the Financial Advisory and Intermediary Services Act, 2002. The declaration marks the first step in crypto asset regulation, in South Africa, and follows a draft declaration published in 2020 and … Continue reading

Developments in the regulation of open finance

By Desiree Reddy (ZA) on July 29, 2022 Posted in Finance

The Intergovernmental Fintech Working Group (IFWG) has published a new blog on Open Finance, noting that South African regulatory authorities have started looking at open finance as it relates to their respective mandates. What is open finance? The premise of “open finance” is to give customers the ability to access and share their own financial … Continue reading

Regulation on Crypto Assets

By Desiree Reddy (ZA) on May 23, 2022 Posted in Finance

In November 2020, the FSCA released a draft declaration to include crypto assets as ‘financial products’ under the Financial Advisory and Intermediary Services Act, 2002. The effect of the draft declaration, once made final, would be that any person providing advice or intermediary services in relation to crypto assets would need to be licensed as … Continue reading

When can my bank close my bank account?

By Desiree Reddy (ZA) on March 16, 2022 Posted in Banking

There has been considerable media attention over the last few weeks on account closures by banks. Although there are no statutory requirements in this regard (the Banks Act, 1990 for example, is silent on the issue of account closures), it is not the case that a bank has an unfettered discretion regarding account closures. An … Continue reading

FSCA publishes a digital banking research report

By Desiree Reddy (ZA) on January 24, 2022 Posted in Banking, Finance

In recognition of the increase in the adoption of digital channels by financial consumers, in late 2021 the FSCA published a Digital Banking Research Report on the state of digital banking activities in South Africa. The term “digital banking” refers to the digitisation of traditional banking services in order to more efficiently deliver financial services … Continue reading

YouTube channel for the Financial Sector Conduct Authority (FSCA)

By Desiree Reddy (ZA) on December 20, 2021 Posted in Finance

In a welcomed development, the Financial Sector Conduct Authority has established a YouTube channel (https://m.youtube.com/channel/UCh3dQcOQAzdptNTKFQvB7HQ/about). The channel is a useful resource and provides valuable insight as to the FSCA’s stance on certain issues. Check out their latest videos: How to establish a FAIS compliance function: https://www.youtube.com/watch?v=QlnMYmwlj1Y How the FSCA complies to PAIA: https://youtu.be/TdUUOEckfB0 Financial soundness requirements … Continue reading

Regulation of crypto assets at the door: A further step following the declaration of crypto assets

By Desiree Reddy (ZA) and Ntokozo Ngubane on October 22, 2021 Posted in Finance

In a draft declaration issued on 20 November 2020, the FSCA proposed to include crypto assets as a category of financial product under the Financial Advisory and Intermediary Services Act, 2002 (“FAIS”). We wrote about this previously, here. Speaking to the draft declaration in a September 2021 media briefing, Ms Olaotse Matshane, Chairperson of the … Continue reading

Lawful, reasonable and procedurally fair FAIS debarment process

By Desiree Reddy (ZA) on December 9, 2020 Posted in General

Anyone embarking on a FAIS process to debar a financial service provider or representative would do well to read a recent Financial Services Tribunal decision setting out what constitutes a lawful, reasonable and procedurally fair process. The matter is Mothei v Advicecube (FSP35/20). The decision sets out the statutory and regulatory basis for debarment proceeding … Continue reading

FSCA takes first steps in the regulation of crypto assets

By Desiree Reddy (ZA) on November 25, 2020 Posted in Banking

On 20 November 2020, the Financial Sector Conduct Authority issued a draft Declaration of Crypto Assets as a Financial Product under the Financial Advisory and Intermediary Services Act 2002 (FAIS Act). The Declaration will be made in terms paragraph (h) of the definition of ‘financial product’ in the FAIS Act, which provides that a financial … Continue reading

Conduct of Financial Institutions

By Desiree Reddy (ZA) on October 1, 2020 Posted in General

On 28 September 2020, National Treasury released the second draft Bill regulating the conduct of Financial Institutions, for comment. The aim of the Bill is to impose conduct standards for financial institutions to protect financial customers. The Bill is the second peak of the Twin Peaks model and will require market conduct that emphasises the … Continue reading

FSCA clamps down on FICA non-compliance

By Desiree Reddy (ZA) on July 28, 2020 Posted in Banking

Financial services providers (FSPs) registered under the Financial Advisory and Intermediary Services Act 2002 fall within the ambit of ‘accountable institutions’ under the Financial Intelligence Centre Act 2001. As accountable institutions, these FSPs are obliged to comply with the FIC Act and are subject to oversight by the FSCA. The FSCA has recently investigated compliance with … Continue reading

FSCA publishes the conduct standard for banks

By Desiree Reddy (ZA) and Amina Yuda on July 9, 2020 Posted in Banking

When the Financial Sector Regulation Act (FSRA) was introduced in 2018, the FSCA was tasked with regulating and supervising the way banks conduct themselves in relation to the provision of financial products and services to customers. In fulfilment of this mandate, the FSCA has published a conduct standard for banks. The conduct standard is supported … Continue reading

POPI compliance – have you considered your existing data protection measures?

By Desiree Reddy (ZA) and Claire Friedman on July 3, 2020 Posted in General

The majority of the Protection of Personal Information Act 2013 (POPI) effectively commenced on 1 July 2020. The sections that commenced deal with how personal information (which is any information that can identify and infringe the privacy rights of a natural or juristic person) may be processed in South Africa or transferred across borders. As POPI … Continue reading

Financial Sector Laws Amendment Bill 2020 to go to Parliament

By Desiree Reddy (ZA) on June 17, 2020 Posted in Banking

During a virtual meeting held on 10 June 2020, Cabinet approved the Financial Sector Laws Amendment Bill of 2020, for submission to Parliament. In the first step to formalising a resolution process for financially distressed banks, the Bill proposes to designate the SARB as the Resolution Authority, and enhances the SARB’s regulatory tools for discharging … Continue reading

FSCA publishes two drafts: conduct standard and directive for securities exchanges

By Desiree Reddy (ZA) on May 22, 2020 Posted in Banking

On 20 May 2020, the Financial Sector Conduct Authority (FSCA) published a draft Conduct Standard for Exchanges and a draft Directive for Exchanges. Conduct Standard for Securities Exchanges The main objective of the proposed conduct standard is to introduce requirements for the conduct of securities exchanges in response to increased competition in the South African … Continue reading

Dirty money and the rise of digital payments

By Desiree Reddy (ZA) on May 4, 2020 Posted in Banking

Exchanging bank notes and coins are increasingly seen as risky business, as noted by Thomson Reuters in an article on the rise of digital money transactions. The COVID-19 pandemic may speed up the global move towards digital-only payments. Apart from the more widespread use of payment apps, electronic funds transfers and cryptocurrencies, the idea of … Continue reading

Fintech innovation hub launched

By Desiree Reddy (ZA) on April 8, 2020 Posted in General

The financial services regulators launched the Intergovernmental Fintech Working Group (IFWG) Innovation Hub on 7 April 2020 to respond to changes in the financial sector driven by fintech. The IFWG seeks to promote responsible innovation in the sector. The Innovation Hub is intended to support the sector in introducing innovations that complement the core mandates … Continue reading

FSCA relaxes reporting requirement in response to COVID-19

By Desiree Reddy (ZA) on March 25, 2020 Posted in General

On 24 March 2020, in recognition of the impact of the current COVID-19 pandemic on the financial services industry, the FSCA released general communication 9 of 2020 which sets out relaxations of regulatory requirements. In summary, the FSCA has granted: Financial services providers A four month extension for the submission of some financial statements (not … Continue reading

COVID-19: Checklist of actions for Financial Services firms to consider

By Desiree Reddy (ZA) on March 24, 2020 Posted in General

The speed at which the COVID-19 situation is evolving means that financial services firms are having to work rapidly to ensure that their business services can continue to operate. Effective and successful management of crises such as these is directly related to how well prepared organisations are to respond. In light of the developing situation, … Continue reading

FinTech in the legal arena

By Desiree Reddy (ZA) on July 24, 2019 Posted in Banking

Financial technology, often referred to as FinTech, is the marriage between financial and technology services. The FinTech offering seeks to provide innovative alternatives to traditional methods in the delivery of financial services. The different categories that sit within the ambit of the broader FinTech offering include: lending, payments, wealth management and personal finance, digital currencies … Continue reading