These criteria represent the minimum requirements that an applicant will need to meet for authorisation or registration under the applicable financial sector law. Depending on the circumstances, the PA may refuse an application on other prudential grounds not specifically listed above.
The PA expects all applicants to be able to comply with its prudential requirements, as stipulated in various financial sector laws, from the commencement of their operations. More stringent or otherwise modified prudential requirements may be set on a case-by-case basis.
It should also be noted that the PA may not issue a licence without obtaining the concurrence of the Financial Sector Conduct Authority.
The PA may conduct a pre-application meeting with prospective applicants after receiving an enquiry or request for a meeting via the PA website or telephonically. The pre-application meeting provides prospective applicants with an opportunity to discuss their proposed business plans. It will also allow the PA to highlight any areas the applicant might need to address. The applicant will have the opportunity to ask questions about the authorisation process.
Before the initial meeting, the applicant will be required to prepare a brief high-level summary of its business proposition. As a minimum, the aforementioned brief should contain:
Information and supporting documentation required to be submitted with an application is set out in the applicable financial sector law.
Two copies of the final application, each signed by the chairperson of the board or the chief executive officer of the applicant, including all the required information and supporting documentation as set out in the annexures, should be submitted to the PA. Due to the size of the applications, the PA should also be provided with a soft copy of the application.
An application can be submitted to the PA in the following ways:
All applications are processed within a reasonable time, having regard to the particular circumstances of each application, including the completeness of information and documents submitted to the PA by the applicant.
The PA may seek additional information from an applicant if this is necessary to assess the application. The PA does not need to deal further with an application until the applicant has provided this additional information.
The PA will make a decision independently on whether or not to grant an application. While the PA will make the final decision on an application, section 126 of the Financial Sector Regulation Act (FSR Act) stipulates that the PA may not issue, vary, suspend or revoke a licence unless the Financial Sector Conduct Authority (FSCA) has concurred. The PA will accordingly obtain the FSCA’s concurrence prior to issuing any licence.
The PA may impose conditions for authorisation and/or registration at the time it is granted and may impose, vary or revoke conditions for authorisation and/or registration thereafter.
When the PA grants an application for registration, it will notify the applicant in writing. Registrations will be published on the PA’s website and, where required, in the Government Gazette.
In terms of the FSR Act, the PA must seek the concurrence of the FSCA before varying, suspending or revoking a licence.
Applicants for new licences can contact the PA with an enquiry or a request for a meeting via the PA website or telephonically. Enquiries should be directed to the Management Support Division in the Policy, Statistics and Industry Support Department.
The PA’s contact details are as follows:
Telephone: | +27 12 313 3911 |
Email: | PA-Info@resbank.co.za |
There are a number of alternatives to becoming a deposit-taking financial institution. These include setting up a commercial bank, a mutual bank, a co-operative bank or a co-operative financial institution. The PA will only authorise qualifying applicants with the capacity and commitment to conduct the business of a bank with integrity, prudence and competence on a continuing basis.
The business of a bank, as defined in the Banks Act 94 of 1990 (Banks Act), includes the soliciting or advertising for, or the acceptance of, deposits from the general public. A deposit is defined as an amount of money paid by one person or institution to another, subject to an agreement in terms of which an equal amount or any part thereof will be repaid on demand, on a specified or unspecified date, or in circumstances agreed upon between the parties involved. In order to conduct the business of a bank in South Africa, an entity must be registered as a bank by the PA. It is an offence to conduct the business of a bank in the Republic without being licensed as a bank.
Banking in South Africa is regulated by wide-ranging primary and secondary or subordinate legislation. The primary pieces of legislation governing deposit-taking institutions are the Banks Act, the Financial Sector Regulation Act 9 of 2017, the Mutual Banks Act 124 of 1993, the Co-operative Banks Act 40 of 2007, and the Co-operatives Act 14 of 2005. Secondary legislation includes prudential and joint standards, regulations relating to banks, regulations relating to cooperative banks, regulations relating to mutual banks, and directives, circulars and guidance notes.
Exemptions to the Banks Act have been granted in respect of certain banks, stokvels, and specific savings and credit groups with a common bond. There are conditions attached to such exemptions.
The PA’s approach to the regulation and supervision of the domestic banking system is also informed by the following legislation:
There are four types of banking licenses in South Africa.
Detailed information pertaining to each and the PA’s licensing process can be found here
A commercial bank is a public company owned by its shareholders who are not necessarily depositors or customers of the bank, or a state-owned company. The Banks Act only allows public companies incorporated and registered under the Companies Act 71 of 2008 (Companies Act) or a state-owned company to conduct the business of a bank in the Republic. An entity seeking authority to carry on the business of a bank in the Republic should apply in writing to the PA, in accordance with section 12 of the Banks Act. An application and every document lodged in terms of an application should be signed by the chairperson or the chief executive officer of the institution.
Subsequently, an applicant to whom the PA granted authorisation for the establishment of a bank may, at any time during the 12-month period commencing from the date of the granting of the authorisation, apply in writing to the PA for the registration of the institution as a bank, in accordance with section 16 of the Banks Act. Similarly, an application and every document lodged in terms of an application should be signed by the chairperson or the chief executive officer of the institution.
In order to be licensed as a commercial bank, the applicant should, among other requirements, meet the R250 million minimum capital requirement.
A mutual bank is a juristic person and is, in essence, owned by its depositors who qualify as members by virtue of them being shareholders in that juristic person and who are entitled to participate in the exercise of control in a general meeting of that mutual bank. Mutual banks obtain their legal personality from the Mutual Banks Act and are not required to be incorporated as a company under the Companies Act.
An applicant seeking authorisation to establish a mutual bank should apply in writing to the PA, in accordance with section 10 of the Mutual Banks Act. An application and every document lodged in terms of that application should be signed by the chairperson or the chief executive officer of the institution.
An applicant to whom the PA granted authorisation for the establishment of a mutual bank may, at any time during the 12-month period commencing from the date of the granting of the authorisation, apply in writing to the PA to register the institution as a mutual bank, in accordance with section 13 of the Mutual Banks Act. Similarly, an application and every document lodged in terms of that application should be signed by the chairperson or the chief executive officer of the institution.
In addition to the R10 million minimum capital requirement and the other licensing requirements reflected above, all applications for mutual banks are assessed in terms of the mutuality principle.
These criteria represent the minimum requirements that an applicant will need to meet for authorisation or registration under the Mutual Banks Act. Depending on the circumstances, the PA may refuse an application on other prudential grounds not specifically listed above.
A co-operative bank is an autonomous association of persons united voluntarily to meet their common economic and social needs and aspirations through a jointly owned and democratically controlled enterprise organised and operated on co-operative principles whose members:
For an applicant to be registered as a co-operative bank, the applicant must first be registered as a co-operative financial institution with 200 or more members and holding members’ deposits of R5 million or more. Applications must be submitted (and are assessed) in accordance with the form, content and criteria prescribed in terms of the Co-operative Banks Act.
When processing a licence application for a co-operative bank, the PA also considers the provisions of the Co-operatives Act.
A co-operative financial institution (CFI) is a co-operative that takes deposits and usually identifies itself as a Financial Co-operative, Financial Services Co-operative, Credit Union or Savings and Credit Co-operative.
The Financial Sector Regulation Act 2017 amends the Co-operatives Banks Act 2007 to include the supervision and regulation of CFIs within the PA. Chapter VIIA provides for the registration of CFIs, requirements for registration, suspension of registration or de-registration, repayment of deposits on deregistration or lapsing of registration, and winding up or judicial management of CFIs.
For an applicant to be registered as a CFI, the applicant must be registered as a co-operative with 200 or more members and share capital of R100 000. The CFI must also satisfy human, financial and operational requirements.
On the date that Chapter VIIA took effect, CFIs had to apply to the PA for registration. CFIs were previously registered and supervised by the Co-operative Banks Development Agency (CBDA). CFIs currently registered with the CBDA will have a period of 12 months to register as a CFI in terms of the Co-operatives Banks Act or prior to the expiration of the certificate they currently hold.
When processing a licence application for a CFI, the PA also considers the provisions of the Co-operatives Act.
The Insurance Act was signed into law in January 2018 and came into effect on 1 July 2018. It adopts a principle- and risk-based framework and is supported by prudential standards that elaborate on the principles enshrined in the Act. The PA published 42 prudential standards, which came into effect on 1 July 2018, to cover the financial soundness, governance and operations of the five types of insurance entities operating in South Africa (i.e. the solo insurers, Lloyd’s South Africa, micro-insurers, branches of foreign reinsurers and insurance groups).
The PA augmented the implementation of the Insurance Act with various communiqués covering topics such as the conversion of registration, the designation of insurance groups, auditing and disclosure requirements and transitional reporting obligations in terms of Schedule 3 of the Insurance Act. A number of joint communications were also published by the PA and the Financial Sector Conduct Authority covering topics such as the status of the instruments issued under the Long-term Insurance Act 52 of 1998 and the Short-term Insurance Act 53 of 1998, and cell captive insurance arrangements.
A specific activity under this new regime is the conversion of insurance licences. The deadline for the conversion of insurance licences is 30 June 2020.
An insurer is a person that is licensed to conduct the insurance business under the Insurance Act and includes Lloyd’s, a Lloyd’s underwriter and a reinsurer. Insurance business means life or non-life insurance business conducted or regarded as being conducted in the Republic, as well as reinsurance business.
Licensing in respect of the Insurance Act is prescribed by section 23 and is applicable to:
To qualify for licensing as an insurer conducting micro-insurance business, the applicant must be registered as a profit or non-profit company per the Companies Act or a co-operative registered per the Co-operatives Act.
Where the application is for a reinsurance business, the applicant must be registered as a public or state-owned company under the Companies Act, a co-operative registered per the Co-operatives Act or a branch of a foreign reinsurer.
For any other insurance business application, the applicant must be a public or state-owned company registered under the Companies Act or a co-operative registered per the Co-operatives Act.
The PA is developing an application form that will be used by applicants for the different types of licensing applications to conduct the business of an insurer in South Africa.
Microinsurers licensing application
Licensing application form - new license application
Appliations for license as a controlling company of an insurance group
The PA regulates securities and derivatives market infrastructures. It focuses on enhancing the resilience of market infrastructures by ensuring that international principles relating to market infrastructures are adhered to. Market infrastructures falling within the prudential regulation of the PA are securities exchanges, central securities depositories, clearing houses, trade repositories and central counterparties.
The PA focuses on developments in the local and global market, and has developed its regulatory and supervisory approach to promote and enhance the safety and soundness of market infrastructures. As such, one of the key international standards that the regulated market infrastructures are measured against are the CPMI-IOSCO Principles for Financial Market Infrastructures.
Market infrastructures are licensed by the Financial Sector Conduct Authority in terms of the Financial Markets Act 19 of 2012 with the concurrence of the PA.
Being ‘pre-emptive’ means anticipating risks that might emerge within a regulated institution, within the industry in which the regulated institution operates, and within the broader financial system in order to take appropriate supervisory action. For the PA to be ‘outcomes focused’ means focusing on substance over form: that is, seeking to achieve an effective supervisory outcome rather than merely following a process. Implementing a ‘risk-based approach’ involves focusing supervisory resources in areas that, in the PA’s assessment, pose the greatest risks to the achievement of prudential objectives.
The PA supervisory approach is underpinned by a regulatory framework comprised of various industry-specific sector laws for the entities, with the FSR Act providing a legislative overlay. To continuously improve on its supervisory practices, the PA models its frameworks on applicable internationally recognised principles for the regulation and supervision of financial institutions. These include those principles set by standard-setting bodies such as the International Association of Insurance Supervisors, the Basel Committee on Banking Supervision, the International Organization of Securities Commissions and the Committee on Payments and Market Infrastructures.
The supervisory activities for each financial institution are based on an annual supervisory plan which is informed by the PA’s key priorities, risk assessments and emerging trends in the regulated industries. The PA executes on its supervisory plan by holding prudential meetings with, inter alia, the chairpersons of boards, boards of directors and its subcommittee members, executive management, heads of control functions and the auditors of the regulated financial institutions. Linked to these engagements are the assessments that the PA carries out on each financial institution’s governance and culture frameworks, structures and practices.
Where the PA is concerned about certain governance elements or the principles, methods and assumptions used for the calculation of the value of assets, liabilities, capital requirements and/or capital resources of a financial institution, an independent review could be instituted. An independent reviewer is appointed at the cost of the financial institution concerned to investigate and report back to the PA on the reasonableness of the value and/or governance framework in question.
The FSR Act and other financial sector laws also give the PA full access to statutory returns and all relevant information from the regulated entities, their controlling companies and subsidiaries. Qualitative and quantitative analyses of all information submitted by the regulated financial institutions are done through the off-site and on-site supervisory tools.
The responsibilities of prudential regulation and supervision of financial institutions have personnel and operational costs. The FSR Act and the proposed Financial Sector Levies Bill empower the PA to impose levies on regulated entities to fund the cost of running the PA. In addition to levies, the PA charges fees for specific activities.
Banks
Credit risk rating system register
Co-operative banks
Co-operative financial institutions
Insurers
Application and notification forms
Financial sector regulation
Banks
Banks and Representative offices
Co-operative banks
Co-operative bank returns (CBR)
Co-operative financial institutions
Co-operative financial institutions returns
Insurers
Financial markets infrastructure
Financial Conglomerates
This means that the PA, as far as possible and within its risk tolerance for failures, affords troubled institutions sufficient opportunity to rectify internal weaknesses. The PA regularly liaises and corresponds with regulated institutions in a transparent manner to resolve prudential issues with boards and management of the institutions it supervises. The PA also has a range of supervisory tools available to enable it to meet its statutory objectives and address identified risks to those objectives.
The inability or failure by regulated institutions to comply with the FSR Act or relevant financial sector laws may compel the PA to take effective and appropriate regulatory action. The PA is empowered to take regulatory action against unregistered entities, regulated institutions and individuals within such institutions with the aim to protect the interests of depositors, members of the public and policyholders, and ultimately to promote and enhance the safety and soundness of the financial institutions it regulates and to assist in maintaining financial stability.
The PA, as a supervisory body for the purposes of the FIC Act, also performs the function conferred on it in terms of the Financial Intelligence Centre Act of 2001 (FIC Act). The range of regulatory actions provided for in the FIC Act are therefore available to the PA in respect of accountable institutions regulated by the PA. In meeting its responsibility for supervising and enforcing compliance with the FIC Act, any order, determination or directive made under the FIC Act may be exercised by the PA, in addition to any powers it has in terms of another Act.
Where areas of concern or non-compliance are identified, whether through on-site or off-site supervision, inspections, or information provided by the media or the public, appropriate action will be taken by the PA. More serious matters are referred to the PA Regulatory Action Committee to advise and recommend to the chief executive officer of the PA the appropriate regulatory action to be taken.
The PA has a wide range of regulatory action powers, including the power to impose administrative sanctions and financial penalties and to make these sanctions public. On its website, the PA publishes statements about administrative sanctions imposed in terms of the FIC Act on entities. For a summary of sanctions and regulatory actions imposed click here.
In terms of the FIC Act, a financial institution may lodge an appeal against a proposed administrative sanction of the PA with the FIC Appeal Board. The PA may also appeal a decision of the Appeal Board at a court of law.
Date |
Description |
Entity |
Outcome |
Detail |
2018-11-06 |
Administrative penalty order issued in terms of section 167 (1) of the Financial Sector Regulation Act, 2017 regarding a contravention of Section 7 of the Long-term Insurance Act, 1998, by underwriting sinking fund policies for which the entity was not licensed for. |
Safrican Insurance Company Limited. |
Penalty of ten million Rand of which five million Rand is suspended for a period of two years and the remaining five million Rand is payable within 14 working days from the date of the penalty order. |
|
2019-02-15 |
Administrative penalty order issued in terms of section 167 (1) of the Financial Sector Regulation Act, 2017 regarding the breach of governance standards relating to the non-disclosure of key management personnel’s compensation in the publication of Grinrod Bank Limited’s annual financial statements. |
Grindrod Bank Limited |
Penalty of ten million Rand which is payable within 14 working days from the date of the penalty order. |
|
2019-11-25 |
Administrative penalty order issued in terms of section 167(1) of the of the Financial Sector Regulation Act, 2017 regarding a contravention of section 25(2) read with section 25(4) of the Insurance Act, 2017, by underwriting fund policies for which Brightrock Life Limited was not licensed for. |
Brightrock Life Limited |
Penalty of R1 000 000 (one million Rand) which is payable within 14 working days from the date of the penalty order. |
|
2020-05-26 |
Administrative penalty order issued in terms of section 167(1) of the of the Financial Sector Regulation Act 9 of 2017 regarding a contravention of section 7 of the Long-term Insurance Act 52 of 1998, by underwriting bill protection and hospital cash policies for which Viva Life Insurance Limited was not licenced for. |
Viva Life Insurance Limited |
Penalty of R1 400 000 (one million and four hundred thousand rand) suspended in full for a period of 5 years from the date of the order. |
|
2021-03-04 | Administrative penalty order issued in terms of section 167(1) of the Financial Sector Regulation Act, 2017 regarding a contravention | Viva Life Insurance Limited
|
Penalty of R3 million of which R2 million is suspended for a period of three years and the remaining R1 million is payable within 14 working days from the date of the penalty order. | Click here for detail |
2021-09-13 | Administrative penalty order issued in terms of section 167 (1) of the Financial Sector Regulation Act, 2017 regarding contravention of Section 30(1)(a) and 31(1) of the Insurance Act No. 18 of 2017 (Insurance Act). The penalty arises from the following contraventions of the Insurance Act: a. AVBOB failed to adopt, implement and document an effective governance framework in terms of section 30(1)(a) of the Insurance Act due to the failure of the board of directors in their oversight role over the board nominations process as prescribed in the AVBOB Mutual Assurance Society Incorporation (Private) Act, 7 of 1951 (respectively "the AVBOB Act" and "the Regulations"). This is so as the board of directors failed to detect the irregularities in the nomination of directors which protracted for a period of three years in 2017, 2018 and 2019. b. Avbob failed to have procedures in place to identify non-compliance with section 30 of the Insurance Act as required in terms of section 31(1) of the Insurance Act. This is so as no effective governance framework was adopted and implemented by the insurer which led to the irregularities in the board nomination process over a three-year period in 2017, 2018 and 2019, not being picked up. |
AVBOB Mutual Assurance Society | Penalty of R5 of which R3 million rand of the administrative penalty will be suspended for a period of three years and the remaining balance of R2 million rand is payable within 14 working days from the date of the penalty order. |
Click here for detail |
2021-12-24 | Administrative penalty order issued in terms of section 167(1) of the Financial Sector Regulation Act, 2017 regarding a contravention of section 6.2 and section 9.2 read with Attachment 7 of the Prudential Standard TCFI-01 dated 26 September 2018. | Motswedi Financial Services Co-operative Limited | Penalty of R30 000 (thirty thousand rand) which is payable within 14 working days from the date of the penalty order. | Click here for detail |
2022-04-29 | Administrative penalty order issued in terms of section 167(1) of the Financial Sector Regulation Act 9 2017. The penalty arises from the following contraventions of the Insurance Act No. 18 of 2017 (Insurance Act), by LBIC: a) The PA found that on 02 December 2015 LBIC amended its Memorandum of Incorporation (MoI). Amongst the amendments to the MoI was a change in the capital structure, which resulted in the increase of the authorised shares without the approval required in terms of the now repealed section 23(1)(a) of the then Short-term Insurance Act, 1998 (Act no. 53 of 1998), that was in force at that time; b) The PA also found that LBIC appointed various directors to their Board of Directors without the required approvals from the PA in terms of section 14(1) of the Insurance Act; and c) The PA found that LBIC effected terminations of directors without the required notifications to the PA in terms of section 16(1) of the Insurance Act. |
Land Bank Insurance Company SOC Limited | Penalty of R3 000 000 (three million rand) of the administrative penalty will be suspended for a period of three years from the date the penalty is imposed, subject to LBIC not committing a similar offence during this period. 3. The remaining balance of R2 000 000 (two million rand), inclusive of costs, must be paid within 14 working days from the date of this order. | Click here for detail |
2022-04-29 | Administrative penalty order issued in terms of section 167(1) of the Financial Sector Regulation Act 9 2017. The penalty arises from the contravention of sections 14(1) and 16(1) of the Insurance Act No. 18 of 2017 (Insurance Act), by LBLIC: a. The PA found that LBLIC appointed various directors to their Board of Directors without the required approvals from the PA in terms of section 14(1) of the Insurance Act; and b. The PA also found that LBLIC effected terminations of directors without the required notifications to the PA in terms of section 16(1) of the Insurance Act. |
Land Bank Insurance Life Company SOC Limited | Penalty of R1 376 000 (one million, three hundred and seventy-six thousand rand) of the administrative penalty will be suspended for a period of three years from the date the penalty is imposed, subject to LBLIC not committing a similar offence during this period. The remaining balance of R688 000 (six hundred and eighty-eight thousand rand), inclusive of costs, must be paid within 14 working days from the date of this order. |
Click here for detail |
2022-07-05 | Administrative penalty order issued in terms of section 167(1) of the of the Financial Sector Regulation Act, 2017 regarding a contravention of sections 30 and 31 of the Insurance Act No. 18 of 2017 as well as Prudential Standards for Governance of Insurers 2 and 3 |
Escap SOC Limited | Penalty of Five million rands; Three million of the penalty will be suspended for a period of three years from the date the penalty order, subject to Escap not committing a similar offence during this period |
Click here for detail |
2022-12-07 | Administrative penalty order issued in terms of section 167(1) of the Financial Sector Regulation Act, 2017, regarding the contravention of section 14(1)(b) of the Insurance Act, No. 18 of 2017. | Lloyd's and Lloyd's Underwriters | Penalty of R117 500 (one hundred and seventeen thousand and five hundred rand) is payable within 14 working days from the date of the penalty order. | Click here for detail |
2023-09-22 | Administrative penalty order issued in terms of section 167(1) of the Financial Sector Regulation Act, 2017, regarding the contravention of section 60(5)(b) of the Banks Act, No. 94 of 1990 and regulation 42 of the Regulations relating to banks. | African Bank Holdings Limited and African Bank Limited | Penalty of R1 000 000 (one million rand) is payable within 14 working days from the date of the penalty order. | Click here for detail |
2023-10-16 | Administrative penalty order issued in terms of section 167 (1) (a) of the Financial Sector Regulation Act, 2017 regarding a contravention of paragraph 4.5 of FSI 2.1, by entering into a lease agreement for their office premises which results into an encumbrance of an asset without the approval of the PA. | King Price Life Limited | Penalty of R300,000 of which R150,000 is suspended for a period of 3 years from date of penalty order | Click here for detail |
2024-05-08 | Administrative penalty order issued in terms of section 167(1) of the of the Financial Sector Regulation Act, 2017 regarding a contravention of section 5(4) and 38(1)(e) of the Insurance Act, 2017 (Act No. 28 of 2017). | King Price Insurance Company Limited | A total administrative penalty of R 924,311 (Nine hundred and twenty-four thousand three hundred and eleven rand) is imposed in terms of section 167(1) of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) (FSR Act) on King Price Insurance Company Limited. | Click here for details |
2024-06-10 | Administrative penalty order issued in terms of section 167(1) of the of the Financial Sector Regulation Act, 2017 regarding a contravention of section 14(1), section 16(1) and 44(1) of the Insurance Act, 2017 (Act No. 18 of 2017). | Workers Life Assurance Company Limited | A total administrative penalty of R992,500 (nine hundred and ninety-two thousand five hundred rand) in terms of section 167(1) of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) (FSR Act) on Workerslife Assurance Company Limited. | Click here for detials |
2024-06-10 | Administrative penalty order issued in terms of section 167(1) of the of the Financial Sector Regulation Act, 2017 regarding a contravention of section 14(1), section 16(1) and 44(1) of the Insurance Act, 2017 (Act No. 18 of 2017). | Workers Life Insurance Limited | A total administrative penalty of R917,500 (Nine hundred and seventeen thousand five hundred rand) in terms of section 167(1) of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) (FSR Act) on Workerslife Insurance Limited. | Click here for detials |
2024-09-19 | Administrative penalty order issued in terms of Section 167 (1) of the Financial Sector Regulation Act, 2017 regarding a contravention of section 5(4) of the Insurance Act, No. 18 of 2017 | Swiss Re Africa Limited | Penalty of R1 387 719.15 (One million three hundred and eighty-seven thousand seven hundred and nineteen rands and fifteen cents) is suspended for a period of two-years from the date the penalty is imposed, subject to Swiss Re Africa Limited not committing a similar offence during this period. | Click here for details |
Banks and Insurers
Certain measures are necessary for maintaining the continuity of the vital economic functions of financial institutions, which is often in the interests of financial stability. The tools that the PA has at its disposal through the applicable financial sector laws include early intervention at problem financial institutions. These regulatory interventions may, among other things, result in increased capital requirements or agreed restructuring arrangements.
The process of establishing and refining the legislation, policies and other legal instruments necessary to effectively manage a financial crisis as well as to effect the orderly resolution of failing financial institutions is ongoing. Current developments include the design of a resolution framework and the establishment of a deposit insurance scheme for South Africa.
The PA makes every effort to ensure that all actions it takes are lawful, reasonable and procedurally fair. However, a person aggrieved by a decision taken by the PA may apply to the Financial Services Tribunal for a reconsideration of the decision. The Tribunal may dismiss the application, set the decision aside and remit the matter to the PA for further consideration or, in certain instances, set the decision aside and substitute the decision with that of the Tribunal. However, neither an application for a reconsideration of a decision by the PA nor the proceedings on the application suspends the decision of the PA unless it is specifically ordered by the Tribunal.
The details of the Financial Services Tribunal can be found on the FSCA website:
If you have further questions about functions of the prudential authority, please do not hesitate to contact us.