Since 2020, most retirement funds have been faced with a situation where participating employers have failed to comply with section 13A of the Pension Funds Act, 1956 (PFA), by either underpaying employer or member contributions or not paying at all. The non-payment of contributions attracts late payment interest in terms of section 13(7) of the … Continue reading
This blog was co-authored by Julian Scholtz, Candidate Attorney. During October 2022, the Financial Sector Conduct Authority (FSCA) declared crypto assets to be a financial product under the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act). The FSCA provided an update on 11 May 2023 and published the Exemption of Persons Rendering a Financial … Continue reading
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
This blog was co-authored with Michael McCarthy, Candidate Attorney. The prescribed rate of interest is 11.75% per annum with effect from 1 July 2023. The previous rate was 11.25% per annum. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. … Continue reading
In response to South Africa’s greylisting, the South African government implemented the General Laws (Anti Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 to amend four different acts, one of which was the Trust Property Control Act, 1988. Amendments to the Trust Property Control Act introduce additional administrative and disclosure duties on trustees when … Continue reading
In May 2023 a Michigan US court held that an exclusion in a homeowners policy covering physical loss caused by water or waterborne material which backed through sewers or drains but excluded cover for “the inability of the sewer or drain to handle the amount of rainwater, surface water or groundwater trying to enter the … Continue reading
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
This blog was co-authored with Aqeelah Petersen, Candidate Attorney. The board of a company may resolve that the company voluntarily begin business rescue proceedings and place the company under supervision, if the board has reasonable grounds to believe that the company is financially distressed and there appears to be a reasonable prospect of rescuing the … Continue reading
This blog was co-authored with Rory Scott, Candidate Attorney. On 15 March 2023, the Financial Services Tribunal dismissed a reconsideration application, ruling that a fund cannot rely on a benefit being in the process of being automatically paid as a defence to a pension interest claim. The non-member spouse filed a complaint on 12 May … Continue reading
This blog was co-authored with Julian Scholtz, Candidate Attorney. While the Protection of Personal Information Act, 2013 (POPIA) is widely accepted as the primary legislation dealing with the processing of personal information, it is important for financial service providers (FSPs) to take note of their duties in the Financial Advisory and Intermediary Services Act, 2002 … Continue reading
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
This blog was co-authored by Kristin January, Trainee Associate Islamic finance has shown to be systemically important in many jurisdictions and is growing in the wider regions of the Middle East, Asia and Africa. Recent discussions focusing around the favourable prospects of green Sukuk are another growth driver for Islamic Finance. COP-27 highlighted the massive … Continue reading
Collective investment schemes (CIS), regulated under the Collective Investment Schemes Control Act, 2002, are subject to Board Notice 90 of 2014 (BN90). BN 90 prescribes the type of securities and assets, or particular classes of securities or assets that a CIS in securities may invest in and the limits applicable to such investment. On 6 … Continue reading
On 4 May 2022, the Financial Services Tribunal (Tribunal) dismissed an application for condonation in an application that was filed a year and a day later than the determination, which was the subject of the reconsideration. The grounds for the dismissal were, inter alia, that the pension fund and the respondents would be severely prejudiced. … Continue reading
In December 2022 the Constitutional Court held that a High Court may not decline to adjudicate a matter over which both it and the Magistrates’ Courts have concurrent jurisdiction. Where a number of banks had brought actions for the enforcement of credit agreements in the High Court where the amounts at stake fell within the … Continue reading
In Viceroy Research Partnership LLC and others against the Financial Sector Conduct Authority, the Financial Services Tribunal was faced with the question whether the FSCA had the authority to impose administrative penalties jointly and severally on three partners in a foreign partnership who were not South African citizens nor residents, and the acts allegedly committed … Continue reading
Bank or private debt and venture debt are separate segments in the debt financing market. In contrast to venture debt financings, which relate to start-ups, bank or private debt financings involve the financing of established companies that have already generated profits, can provide collateral and service the debt from the start. Venture debt financings are … Continue reading
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
With the declaration of crypto assets as a financial product, providers of crypto assets are left wondering whether they need to register as a financial service provider under the Financial Advisory and Intermediary Services Act, 2002. Following an exemption published by the Financial Sector Conduct Authority, a person who provides a financial service in relation … Continue reading
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
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
This article was co-authored by: Kristen de Wet, Candidate Attorney The deputy governor of the South African Reserve Bank (SARB) has confirmed that the trading of cryptocurrency in South Africa will be regulated within the next 12 to 18 months from 12 July 2022. The use of cryptocurrency in South Africa is prevalent and recent … Continue reading
This blog was co-authored by: Kristen de Wet, Candidate Attorney The 31 May 2022 publication of FSCA CRA Notice 2 of 2022 (Exemption Notice) by the Financial Sector Conduct Authority (FSCA) has determined that the exemption for certain regulated persons, as set out in the FSCA CRA Notice 3 of 2020 (Provisional Exemption), is finalised … Continue reading
This blog was co-authored by Kristen de Wet, Candidate Attorney On 4 April 2022, the Financial Services Tribunal in JHE Murray v FSCA, held that there exists no requirement in terms of the legislative framework that obliges the Financial Sector Conduct Authority (FSCA) to conduct a formal hearing before making administrative decisions. Consequently, reconsideration applications … Continue reading