Topic: Finance

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Debarment orders, administrative penalties and procedural fairness under the Financial Sector Regulation Act

The Supreme Court of Appeal in this judgment, found that sections 154, 167 and 231 of the Financial Sector Regulation Act 2017 are not unconstitutional nor invalid. The correct interpretation of section 154 (which entitles the Financial Services Conduct Authority to make a debarment order after consultation) is that it does not exclude the Authority from … Continue reading

DEADLINE FOR CRYPTO ASSET SERVICE PROVIDER LICENCE APPLICATIONS – 30 NOVEMBER 2023

On 19 October 2022, the FSCA declared crypto assets as a financial product under the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) as published in General Notice 1350 of 2022 (Declaration).  Together with the Declaration, the FSCA also published FAIS Notice 90 of 2022 which contained a general exemption of persons rendering financial … Continue reading

The in duplum rule does not apply to late payment interest on arrear pension fund contributions owed by participating employers

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

Update on crypto assets as a financial product

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

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

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

Beneficial ownership register requirements for trustees need immediate attention

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

Updates to licensing requirements for crypto asset FSPs

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

Financial distress – resolution against business rescue and s 129(7)

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

Automatic Payment Portal Systems cannot be used as a defence to pension interest claims

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

Data breaches in terms of the FAIS Act

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

First Regulatory Actions Report published

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

Sustainable Finance:  New Markets for Islamic Finance

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

“Too late to have your matter reconsidered,” says the Financial Services Tribunal

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

Financial Services Tribunal hold FSCA has no penalty jurisdiction over foreign persons

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

The Basics of Venture Debt Financing

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

Regulation on Crypto Assets – Part 2

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

Crypto Asset Exemption

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

Regulation on Crypto Assets

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

Developments in the regulation of open finance

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

Regulations for cryptocurrency promised by end of 2023

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
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