Here is the rewritten article in Markdown format:
South Africa’s Financial Regulations: A Closer Look
As the financial sector continues to evolve, regulatory bodies around the world are working to ensure that institutions operate in a safe and secure manner. In South Africa, several regulations have been put in place to protect depositors, prevent money laundering, and promote good governance.
Criminal Record Checks and Financial Regulation
In a move to strengthen its financial regulation, South Africa has introduced new requirements for criminal record checks on employees who are involved in senior decision-making roles. This is particularly important when it comes to crimes of dishonesty, as well as past AML/CT failures while the employee was in a senior position.
POCA and Money Laundering Offences
The Prevention of Organised Crime Act (POCA) creates two main money-laundering offences:
- Criminalising assisting any person to avoid prosecution or knowingly entering into a transaction that is likely to have the effect of concealing or disguising the nature, source, location or movement of property.
- Addressing racketeering by making it a crime to keep any property produced as a result of a pattern of racketeering or acquiring an interest in an enterprise with knowledge of its racketeering origin.
Depositor Protection Regime
South Africa has established a deposit protection regime, which aims to provide reasonable access to funds for covered depositors. The Corporation for Deposit Insurance (CoDI) was established as a subsidiary of the South African Reserve Bank and is governed by the Financial Sector Regulation Act. Funding for the deposit insurance fund will come from a deposit insurance levy payable by banks as a percentage of their covered deposits.
Bank Secrecy Requirements
Banks in South Africa are subject to various sources of law relating to their duty of secrecy, including:
- Common law
- Legislation
- Contract
These laws require banks to treat customer personal information as private and confidential unless required by law or necessary to prevent fraud. The Constitution provides every person with a right to privacy, while the Code of Banking Practice requires banks to respect this right.
Prudential Regime
South Africa has implemented Basel III risk-based capital regulations consistent with international practice. Banks are required to:
- Develop comprehensive risk-management processes
- Establish board-approved policies and procedures to address risks
- Set capital targets commensurate with the bank’s risk profile and control environment
- Implement liquidity and related risk control requirements
Conclusion
South Africa’s financial regulatory landscape is designed to protect depositors, prevent money laundering, and promote good governance in the banking sector. By strengthening its regulations, South Africa aims to maintain a stable and secure financial system that supports economic growth and development.