Topic: Banking

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FSCA takes first steps in the regulation of crypto assets

Desiree Reddy (ZA)By Desiree Reddy (ZA) on 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

Desiree Reddy (ZA)By Desiree Reddy (ZA) on 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

Desiree Reddy (ZA)Amina YudaBy Desiree Reddy (ZA) and Amina Yuda on 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

Desiree Reddy (ZA)By Desiree Reddy (ZA) on 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

Desiree Reddy (ZA)By Desiree Reddy (ZA) on 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

Tshegofatso RammutlaJackie MidlaneBy Tshegofatso Rammutla and Jackie Midlane on 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

International Financing Institutions’ loans available to government and private companies as relief from COVID-19

Lolo MhagaAviva HoekstraNicole GoateBy Lolo Mhaga, Aviva Hoekstra and Nicole Goate on Posted in Banking
In his address on 21 April 2020, President Cyril Ramaphosa announced that government will be approaching international finance institutions such as the International Monetary Fund, the World Bank, the BRICS New Development Bank and the African Development Bank to help fund the R500 billion COVID-19 economic relief package that will be provided by government. International … Continue reading

10 things to know about OTC derivative provider licences in South Africa

Shawn Barnett (ZA)By Shawn Barnett (ZA) on Posted in Banking
South Africa has supported the G20’s efforts to reduce the risk posed by over-the-counter (OTC) derivatives, and has put in place a regulatory framework for the licensing of OTC providers that originate, issue, sell or make a market in OTC derivatives. The Financial Markets Act 2002 prescribes criteria for the authorisation of OTC derivative providers. … Continue reading

Dirty money and the rise of digital payments

Desiree Reddy (ZA)By Desiree Reddy (ZA) on 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

Government and banks offer debt relief for businesses affected by COVID-19

Susan BissetChristina PretoriusBy Susan Bisset and Christina Pretorius on Posted in Banking
As South African businesses suffer the impact of the COVID-19 pandemic and national lockdown, small businesses can apply for debt relief from most of the major South African banks and several state programmes. The Department of Small Business has announced multiple interventions to assist small businesses. In addition to tax subsidies and incentives for compliant … Continue reading

COVID-19 and Finance Documents: Clauses to consider

Jackie MidlaneBy Jackie Midlane on Posted in Banking
The COVID-19 pandemic affects borrowers and lenders and their financing arrangements. The most significant clause to consider is the Material Adverse Effect (MAE) clause – this clause broadly captures unpredictable and unforeseen events or circumstances that would otherwise be difficult to incorporate into the agreement specifically. Read our article on the impacts of COVID-19 on … Continue reading

COVID-19 and Finance Documents: Could the Material Adverse Effect clause be triggered?

Jackie MidlaneBy Jackie Midlane on Posted in Banking
How does the COVID-19 pandemic affect borrowers and lenders and their financing arrangements? A Material Adverse Effect (MAE) clause is included in most finance agreements. It is a catch-all concept to capture unpredictable and unforeseen events or circumstances that would otherwise be difficult to incorporate into the agreement specifically. Broadly, a MAE clause covers a … Continue reading

The decline of LIBOR and the new risk-free interest rates

Steve ChemalyClaire FriedmanBy Steve Chemaly and Claire Friedman on Posted in Banking
The history of manipulation and scandals surrounding interbank offered rates (IBORs), for example LIBOR and JIBAR, has led to the shift toward Risk-Free Rates (RFRs), a shift which is primarily market led and remains uncertain. The transition to RFR’s rests on the fact that rates such as LIBOR are forward-looking interest rates, calculated using estimates … Continue reading

FinTech in the legal arena

Desiree Reddy (ZA)By Desiree Reddy (ZA) on 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

Judicial oversight of execution against property requires full facts before court

Riccardo Petersen (ZA)Vishana MakanBy Riccardo Petersen (ZA) and Vishana Makan on Posted in Banking
Where an order was sought declaring immovable property specially executable but no facts had been placed before the court by the defendant, the court authorised the sale. The court held that to deny an order declaring a property specially executable where the summons clearly draws a debtor’s attention to their right to lead evidence and … Continue reading

Draft Conduct Standard for Banks published

Desiree Reddy (ZA)Amina YudaBy Desiree Reddy (ZA) and Amina Yuda on Posted in Banking
The Financial Sector Conduct Authority (FSCA) has published a Draft Conduct Standard for Banks, under section 106(2)(b) of the Financial Sector Regulation Act 2017 (FSRA). The draft Conduct Standard applies to banks, mutual banks, co-operative banks, branches of foreign banks and representative offices of foreign banks (banks) and will apply in addition to any other … Continue reading

SARB intends to regulate crypto assets

Lize LouwSteve ChemalyDesiree Reddy (ZA)By Lize Louw, Steve Chemaly and Desiree Reddy (ZA) on Posted in Banking
In mid-January 2019, the SARB published its Consultation Paper on Policy Proposals for Crypto Assets, amid a growing interest, investment and participation in crypto assets by financial institutions and individuals and an estimated market capitalisation of about US$200 billion for crypto assets globally. Crypto assets are digital representations or tokens that are accessed, verified, transacted … Continue reading

EIB report on Banking in Africa: Read the findings of our review of the state of bank recovery and resolution laws in Africa

Patrick Bracher (ZA)By Patrick Bracher (ZA) on Posted in Banking
On 22 November 2018, the European Investment Bank (EIB) published the fourth edition of its banking in Africa report. This latest report, Banking in Africa: Delivering on Financial Inclusion, Supporting Financial Stability, focuses on recent developments in Africa’s banking sectors and the policy options for all stakeholders, and includes the results of the EIB’s survey of … Continue reading

Claim by shareholders against directors under section 218(2) of Companies Act fails

Patrick Bracher (ZA)By Patrick Bracher (ZA) on Posted in Banking
Shareholders of African Bank Investments Limited failed in their claim for over R720 million against the directors and auditors of African Bank. The plaintiffs sued unsuccessfully under section 218(2) of the Companies Act 2008 alleging that the conduct of the defendants resulted in a loss to the shareholders because of the drop in the share price. The … Continue reading

Proposed changes to financial laws to deal with failing financial institutions

Desiree Reddy (ZA)By Desiree Reddy (ZA) on Posted in Banking
The Draft Financial Sector Laws Amendment Bill has been published for comment. The Bill proposes amendments to various acts including the Insolvency Act, the South African Reserve Bank Act, the Banks Act, the Mutual Banks Act, the Competition Act, the Financial Markets Act and the Insurance Act – with a view to strengthening the ability of … Continue reading

Financial assistance to subsidiaries reviewed in the Companies Amendment Bill: What is ‘its own subsidiary’?

Jackie MidlaneSteve ChemalyBy Jackie Midlane and Steve Chemaly on Posted in Banking, General
The amendments proposed in the Companies Amendment Bill 2018 have caught the attention of financiers and attorneys in so far as the provision of financial assistance (e.g. providing a loan, guaranteeing a loan, and securing any debt or obligation), to ‘its own subsidiary’ is concerned. The Amendment Bill proposes to amend section 45 by removing … Continue reading

The South African Companies Amendment Bill 2018

Stephen Kennedy-GoodBy Stephen Kennedy-Good on Posted in Banking, General
The long awaited South African Companies Amendment Bill (Bill) was published on 21 September 2018 for comment. Substantial changes to the South African Companies Act 2008 (Companies Act), which became law in 2011, have been proposed. Comments may be submitted to the SA Department of Trade and Industry by 20 November 2018, and we encourage business to consider … Continue reading
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