Financial Crime World

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South Africa’s Banking Regulations: A New Era of Compliance

The Financial Sector Regulation Act (FSRA) No. 9 of 2017 has introduced significant changes to South Africa’s banking regulations, aimed at enhancing financial stability and protecting consumers.

Key Provisions of the FSRA

  • Establishes a system of financial regulation
  • Preserves financial stability
  • Regulates and supervises financial product providers
  • Improves market conduct to protect financial customers
  • Coordinates among various organs of state, including:
    • Reserve Bank
    • Prudential Authority
    • Financial Sector Conduct Authority
    • National Credit Regulator
    • Financial Intelligence Centre

Repealed Laws and New Regulatory Instruments

  • The FSRA has repealed several existing financial sector laws, including:
    • Credit Rating Services Act
    • Financial Markets Act
    • Co-operative Banks Act
  • Introduced new regulatory instruments, such as:
    • Prudential standards
    • Conduct standards
    • Joint standards

Powers and Enforcement

  • Licensing of financial institutions
  • Gathering information and conducting supervisory on-site inspections and investigations
  • Enforcement of financial sector laws through administrative penalties
  • Establishes the Ombud Council, Financial Services Tribunal, and Financial System Council of Regulators

Significant Owners and Conglomerates

  • Introduces measures to regulate significant owners of financial institutions
  • Supervises financial conglomerates
  • Protects rights in the financial sector as outlined in the Constitution

Amendments and Implementation

  • The act came into effect on various dates between 2018 and 2023
  • Several amendments have been made since its introduction, with the most recent being the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act No. 22 of 2022

Compliance is Essential

As South Africa’s banking sector continues to evolve, compliance with the FSRA is essential for financial institutions seeking to operate in a stable and regulated environment.