Topic: Banking

“Retrospective pension fund rule amendments not registered by FSCA do not bind members” says ConCourt

By Michelle David, Amina Yuda and Ntokozo Ngubane on August 23, 2023 Posted in Banking

The Constitutional Court has provided much needed certainty to the retirement fund industry following the surprising April 2022 judgment of the Supreme Court of Appeal in Municipal Employees Pension Fund & Another v Pandelani Midas Mudau and Another. On 02 August 2023, the Constitutional Court overturned the SCA judgment. The facts of the matter are … Continue reading

‘Money mule scams warning’

By Desiree Reddy (ZA) on July 11, 2023 Posted in Banking

The number of “money mule” scams i.e. where criminals approach bank customers with requests to have funds (often the proceeds of crime) paid into their accounts and often offer them a reward for the use of the account, is unfortunately on the rise. In a press release dated 10 July 2023, the FSCA has warned … Continue reading

Exemption of banks in respect of certain clients extended to 30 June 2025

By Ntokozo Ngubane and Desiree Reddy (ZA) on June 28, 2023 Posted in Banking, Finance

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 … Continue reading

Updated Green Loan Principles: 5 things to know

By Steve Chemaly, Olivia Radford and Angela Paschalides on March 7, 2023 Posted in Banking

On 23 February 2023, the Loan Market Association (LMA) announced the publication of updated Green Loan Principles (GLPs), together with supporting guidance documents, produced in collaboration with the Asia Pacific Loan Market Association (APLMA) and the Loan Syndications and Trading Association (LSTA). The intention behind the updated GLPs is to ensure that they reflect recent … Continue reading

Will Term SOFR become the leading US dollar lending benchmark in developing markets?

By Steve Chemaly on March 2, 2023 Posted in Banking

This blog was co-authored with Rory Scott and Lara Thom, Candidate Attorney’s In 2017, the Alternative Reference Rates Committee (ARRC) recommended the replacement of LIBOR with the Secured Overnight Financing Rate (SOFR). Since the proposed transition, developing markets have been rudderless regarding which benchmarks to apply. There are four types of SOFR that apply to … Continue reading

Green Loans and Sustainability Linked Loans – same but different?

By Steve Chemaly, Olivia Radford and Angela Paschalides on June 23, 2022 Posted in Banking, Finance

From a reputational and corporate governance perspective, green and sustainable activity both gain favour with shareholders and investors (particularly those who place emphasis on investment with a positive environmental, social and governance (ESG) impact). Green Loans and Sustainability Linked Loans have distinctive characteristics which should influence the type of loan offering borrowers consider. A key … Continue reading

Green Loans: a grassroots overview

By Steve Chemaly, Angela Paschalides and Olivia Radford on June 8, 2022 Posted in Banking, Finance

What are Green Loans? Green loans are loan instruments made available exclusively to finance or re-finance, wholly or partly, new or existing eligible Green Projects, according to the Loan Market Association’s Green Loan Principles (the GLPs). There are no specific qualifying criteria for a “Green Project” but indicative categories set out in the GLPs include … 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

Foreign collective investment schemes and FSCA discretion

By Shawn Barnett (ZA) and Hishaam Khan on June 9, 2021 Posted in Banking

The Financial Services Tribunal held, in May 2021, that a manager of a foreign collective investment scheme is not to be made subject to the limitations applied to a manager in terms of the Collective Investment Schemes Act of 2002 (CISCA), where an application is made to the Financial Sector Conduct Authority (FSCA) for permission … Continue reading

Employer ordered to pay costs of application to the Financial Services Tribunal

By Michelle David on May 27, 2021 Posted in Banking

The Tribunal has determined that the employer in the recent decision in the matter of Oasis Group Holdings (Pty) Limited v Mansoor and Others, is liable for the costs of the fund member in opposing the application on the High Court scale. The costs order comes in the wake of the Tribunal having repeatedly dealt … Continue reading

Trade Finance – no respite from inventory and documentation fraud

By Steve Chemaly and Darragh Meaker on April 19, 2021 Posted in Banking

The increase in documentation fraud which has adversely impacted financial institutions operating within the trade finance space is an unwanted development that blockchain technology can mitigate. The types of lending most frequently seen in the trade financing space, including letters of credit, revolving credit facilities as well as guarantees have proven susceptible to fraud. An … Continue reading

Failure to submit valuation reports will result in the imposition of administrative penalties

By Amina Yuda on March 31, 2021 Posted in Banking

On 17 March 2021, the Financial Services Tribunal confirmed that failure to timeously submit an actuarial valuation can result in the imposition of administrative penalties on a pension fund. The Financial Sector Conduct Authority (“FSCA”) may take into consideration the number of days that the pension fund was late in submitting the actuarial valuation when … Continue reading

Green Bonds – an alternative investment opportunity

By Steve Chemaly and Olivia Radford on March 25, 2021 Posted in Banking

What are Green bonds? Green bonds (also referred to as Climate Bonds) are like typical bonds but their distinguishing feature is that the proceeds of the bond are ring-fenced and exclusively allocated to support “green projects” aimed at mitigating climate change and promoting energy efficiency, pollution prevention, sustainable agriculture, clean transport, and the cultivation of … Continue reading

A bank’s duties where third parties’ money is in a customer’s account

By Candice Grieve on March 23, 2021 Posted in Banking

In March 2021, the Supreme Court of Appeal (SCA) handed down judgment with two important findings regarding a bank’s obligations to a third party, namely: a bank is not entitled to set-off the customer’s debts to the bank against amounts reflecting to the credit of a customer, if the bank knows that a third party … Continue reading

A growing market for green finance

By Steve Chemaly, Roxanne van Rooyen and Maxine Rodrigues on February 24, 2021 Posted in Banking

Climate change is no longer a future threat. The associated risks have already had a devastating impact on the financial sector. Financial institutions are financially exposed to the physical risks associated with more frequent severe weather events, as well as the transition risks associated with the changes necessary to achieve a low-carbon economy. Mortgage, commercial … Continue reading

Lloyd’s protected cell company approved to promote investment in members

By Patrick Bracher (ZA) on February 1, 2021 Posted in Banking

In order to attract new forms of capital, Lloyd’s of London applied for and has had regulatory approval to set up a protected cell company known as London Bridge Risk. The idea is to make it easier for investment in the Lloyd’s market with a more transparent and efficient capital management process. It provides access … 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

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

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

SARB cuts the repo rate yet again: how does this affect borrowers and debt payments?

By Claire Friedman, Aviva Hoekstra and Jackie Midlane on May 24, 2020 Posted in Banking

Economists and business leaders have welcomed the South African Reserve Bank’s (SARB) decision to cut the repo rate by a further 50 basis points (bps) to 3.75% on 21 May 2020. This has resulted in a reduction of the prime rate quoted by our commercial banks from 7.75 % to 7.25 %. This is the … 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

COVID-19 guaranteed loan scheme for businesses with an annual turnover of less than R300 million

By Tshegofatso Rammutla and Jackie Midlane on May 15, 2020 Posted in Banking

In a further initiative to combat the economic fallout of the COVID-19 pandemic, the state, in collaboration with the banking sector and the South African Reserve Bank (SARB) has announced a R100 billion loan scheme to assist ailing small and medium-sized businesses (SMMEs). On 12 May 2020 National Treasury, the SARB and the Banking Association … Continue reading