Topic: Banking

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Blockchain – our Uber takes on syndicated lending and secondary market trades

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

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?

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

Acceleration clauses and prescription

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

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

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

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

What is a simulated transaction?

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

Insist on clear court orders that affect you

All laws and court orders must be written in a clear and accessible way. Vague laws or court orders violate the rule of law, which is a founding principle of our Constitution. In Minister of Water and Environmental Affairs v Kloof Conservancy, the Supreme Court of Appeal set aside part of a court order because it … Continue reading

South African renewable energy programme: benefits of local community investments

In order to ensure that the construction and operation of renewable energy projects in South Africa is not hampered by unsatisfied local communities it is important that borrowers’ and sponsors’ alike invest in educating local communities on how they derive benefit from the projects. Since our article of September 2014 (Renewable energy projects: community related … Continue reading

Doing Business in South Africa, 2016

The World Bank’s Doing Business Report is eagerly awaited each year as an indicator of the ease of doing business in various economies around the world. Released in October 2015, this year’s report presents data for 189 economies and aggregates information from ten areas of business regulation (such as starting a business, getting credit and … Continue reading

Challenges to banking and tech: data and cybercrime

The proliferation of data gives rise to two challenges: Companies need to manage the vast amounts of data they now control and turn it to useful purposes. The availability of so much data has been an ideal environment for an explosion of various forms of cybercrime. Data The role of data scientists and analytic technology … Continue reading

Letters of credit: silent confirmations do not strip an honouring bank’s rights as nominated bank under UCP 600

The court in Greenhill International Pty Ltd v Commonwealth Bank of Australia confirmed that silent confirmations of letters of credit fall outside the Uniform Customs and Practice for Documentary Credits 600 (UCP 600) and are governed purely by the express and implied terms agreed to by the paying bank and the beneficiary. However, the court … Continue reading

Arbitrations hit by moratorium on legal proceedings in business rescue

Overturning a lower court judgment, the appeal court has found that arbitrations are included in the general moratorium on legal proceedings against companies under business rescue in section 133(1) of the Companies Act 2008. In Chetty v Hart, the Supreme Court of Appeal looked at the meaning of the phrase “legal proceedings” in section 133 in relation … Continue reading

Regulation of small-scale embedded generation and the potential regulatory framework provided by NERSA

Small-scale embedded generation (SSEG), particularly rooftop solar photovoltaic systems, are increasingly used by South Africans as an alternative solution to South Africa’s current energy supply challenge. The Integrated Resource Plan 2010-2030 Update estimates that residential and commercial PV embedded generation could reach 22.5GW by 2020. However, there is no legal framework for the implementation of … Continue reading

Margin requirements for derivatives – but which OTC’s will be affected?

The International Swaps and Derivatives Association Inc. (ISDA) indicated that South Africa has been in focus over recent months since the margin requirements for non-centrally cleared derivatives transactions were published for comment in June 2015. The aim of the requirements is to outline the future regulation of OTC derivatives in South Africa in line with … Continue reading

National Credit Act salary attachment procedure revisited

In early July 2015 the High Court declared aspects of a long-established but often abused debt collecting process unlawful, with potential wide-ranging consequences. It could render hundreds of thousands of salary attachment orders unenforceable. In our recent blog post we highlighted the findings of what is known as the Desai Judgment (after the judge who … Continue reading

Business rescue: Constitutional Court upholds SCA judgment regarding interpretation of binding offer in Section 153(1b)(ii) of the Companies Act

The Constitutional Court refused leave to appeal against the Supreme Court of Appeal decision that a “binding offer” to a creditor in business rescue proceedings, made under s 153(1)(b)(ii) of the 2008 Companies Act, is not automatically binding on the creditor. The appeal had “no prospects of success” which effectively confirms the correctness of the interpretation of … Continue reading