Topic: Banking

Financial Sector Regulation Act in force from 1 April 2018

By Patrick Bracher (ZA) on April 3, 2018 Posted in Banking, Insurance

Most sections of the Financial Sector Regulation Act 2017 were brought into force from 1 April 2018. This step was anticipated as the first step towards the commencement of the new Insurance Act on 1 July 2018. By a two-step process the Minister was empowered in a Gazette of 29 March 2018 to make regulations, which were passed … Continue reading

Asset management in South Africa – Ten things to know

By Shawn Barnett (ZA) on March 18, 2018 Posted in Banking

1. Licensing of asset managers South African asset managers must register as financial service providers (FSPs) with the Financial Services Board (FSB) under the Financial Advisory and Intermediary Services Act (FAIS). Any person carrying on asset management business in South Africa, or from abroad directed at South African clients, whether in a discretionary or non-discretionary capacity … Continue reading

SARB announces establishment of Fintech programme

By Kerri Crawford (ZA) on February 20, 2018 Posted in Banking

The South African Reserve Bank (SARB) has established a Financial Technology (Fintech) programme to assess the emergence of technological innovations in the financial sector and consider their regulatory implications. In a statement issued on 13 February 2018, the SARB stated that it ‘takes a balanced approach to technological innovations, considering the potential benefits and risks … Continue reading

Bank sued for paying on instructions to director acting fraudulently (UK)

By Patrick Bracher (ZA) on February 13, 2018 Posted in Banking

A sole shareholder and director who had dominant influence over the affairs of the plaintiff company acted fraudulently and paid out the company’s money from its bank accounts for his own personal benefit. The bank was held liable because on the facts it was found that any reasonable banker would have realised that there were … Continue reading

Voting against a business rescue plan

By Caroline Theodosiou and Adriaan Louw (ZA) on November 6, 2017 Posted in Banking

Creditors of a company in business rescue do not have an unfettered vote to reject a proposed business rescue plan because their vote may be set aside by a court if it is inappropriate. The Supreme Court of Appeal in Firstrand Bank Ltd v KJ Foods CC considered the meaning of ‘inappropriate’ relating to business rescue … Continue reading

Can cessions in security be suspended in business rescue?

By Riza Moosa on September 7, 2017 Posted in Banking

A cession of rights as security may include rights which only come into existence in future as in the cession of future book debts. The agreement to cede such rights requires no further action on the part of the cedent at the future time when those rights come into existence. They automatically form part of … Continue reading

Suspension of agreement in business rescue: What can a creditor do?

By Riza Moosa on August 29, 2017 Posted in Banking

The powers of a business rescue practitioner to suspend contracts has given rise to concern and speculation as to the effect of the exercise of those rights in business rescue and the implications for creditors. It has been clarified that a creditor whose agreement is suspended in business rescue has the right to withhold the … Continue reading

Business rescue asset disposals

By Riza Moosa on June 19, 2017 Posted in Banking

An owner whose property is in the possession of another without consent can recover possession by way of vindication (rei vindicatio). But what happens if the person in possession is legally permitted to sell those goods? In EnergyDrive Systems (Pty) Ltd v Tin Can Man (Pty) Ltd the Johannesburg High Court heard a matter dealing with … Continue reading

Islamic finance update – new draft governance standards

By Riza Moosa on February 23, 2017 Posted in Banking

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

By Donovan Brown on December 14, 2016 Posted in Banking

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

By Aslam Moosajee (ZA) on December 12, 2016 Posted in Banking

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

By Desiree Reddy (ZA) on December 11, 2016 Posted in Banking

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

By Steve Chemaly and Rohan Isaacs (ZA) on October 31, 2016 Posted in Banking

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

By Donovan Brown on October 11, 2016 Posted in Banking

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?

By Steve Chemaly and Rohan Isaacs (ZA) on September 19, 2016 Posted in Banking

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

Blockchain – will this be trade and commodity finance’s Uber?

By Steve Chemaly and Rohan Isaacs (ZA) on August 24, 2016 Posted in Banking

Uber’s success is that it made it as easy to order and pay for a ride as clicking a few buttons. It created a multi-billion dollar market that didn’t exist just a few years ago. Blockchain is a payment technology that enables people to automate functions that previously needed manual input and creates certainty without … Continue reading

Acceleration clauses and prescription

By Aslam Moosajee (ZA) on June 3, 2016 Posted in Banking

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

Failure to join creditors is fatal to an application to set aside business rescue proceedings

By Aslam Moosajee (ZA) on May 30, 2016 Posted in Banking

Creditors of a company have a substantial interest in an application to set aside business rescue proceedings or the adoption of a business rescue plan. A court will dismiss such an application if the creditors are not joined as parties to the application. Giving notice of the application to the creditors does not cure the … Continue reading

Extra-territorial application of NCA to offshore credit agreements

By Riccardo Petersen (ZA) on May 25, 2016 Posted in Banking

A settlement agreement concluded outside South Africa between a foreign company and a person resident in the United Kingdom that was concluded completely outside the South African credit market and has no bearing on accessibility to credit by South Africans or the nature of credit products available within South Africa does not “have an effect … Continue reading

Bank held liable for the fraudulent conduct of a former director of its customer

By Aslam Moosajee (ZA) on May 23, 2016 Posted in Banking

A bank needs to ensure that a company has authorised its director to allow the company’s bank account to be debited each month, if the payments settle the director’s personal obligations. This much is clear from the recent SCA judgment in First National Bank and Another v Scenematic One (Pty) Ltd. Mr Naude, a former … Continue reading

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

By Aslam Moosajee (ZA) on May 5, 2016 Posted in Banking

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

By Riccardo Petersen (ZA) on April 7, 2016 Posted in Banking

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

A consumer who gets a section 129 notice cannot rely on fanciful technical points

By Aslam Moosajee (ZA) on March 10, 2016 Posted in Banking

The purpose of s129 of the National Credit Act (NCA) is to ensure that a consumer is notified of the default and of the various options available to the consumer. In Sebola v Standard Bank the Constitutional Court held that a credit provider can normally show compliance with s129 by: proving that the notice was sent … Continue reading

What is a simulated transaction?

By Patrick Bracher (ZA) on December 9, 2015 Posted in Banking

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