In brief: banking regulatory framework in South Africa (2024)

Regulatory framework

Key policies

What are the principal governmental and regulatory policies that govern the banking sector?

In 2011, the National Treasury published a policy document titled ‘A safer financial sector to serve South Africa better’ (the 2011 Policy Document). The 2011 Policy document identifies the following policy priorities for the financial services sector.

Stability and soundness of financial institutions

The primary objective of the central bank of South Africa – the South African Reserve Bank (SARB) – is to protect the value of South Africa’s currency in the interest of balanced and sustainable economic growth in South Africa. The SARB assesses the stability and efficiency of South Africa’s financial system.

The Financial Sector Regulation Act 2017 (the FSR Act) commenced on 29 March 2018 and brought into effect the twin peaks model for the financial sector reform from 1 April 2018.

The FSR Act requires the SARB and other state organs to coordinate their functions and the implementation of financial stability in accordance with specified principles. The Financial Sector Laws Amendment Act 2021 (the FSLA Act), which has received presidential assent but is not yet in effect, implements elements of the twin peaks reform of the financial regulatory system applicable to the financial sector. Crucially, it introduces how to deal with a failing bank or other systematically important financial institution to protect financial stability with less reliance on the fiscus. The FSLA Act enables South Africa to meet the essential international standards following the 2008 financial crisis, as supported by G20 countries and outlined in the international standards of the Financial Services Board (FSB) for resolution planning. These standards are titled ‘Key attributes of effective resolution regimes for financial institutions’ and were issued in 2011, setting out the international standards for resolution regimes to deal with the problem of banks that are considered too big to fail. The FSLA Act therefore encompasses a variety of fundamental policy objectives that include:

public funds will no longer be the default origin of funding used to bail out failing banks and other large financial institutions;
losses incurred as a result of the failure of a financial institution will in the first instance be borne (through the bail-in) by shareholders and creditors who are able to assess their investment risks and who had benefited from profits gained by the institution as a going concern;
the SARB will get additional legal tools to make sure that crucial services continue and that stability is maintained in the event of a material failure;
following international best practice, a modified creditor hierarchy for financial institutions that fall within the scope of the envisaged framework is introduced, in terms of which covered depositors will rank as preferred creditors; and
the protection of vulnerable depositors is an essential element of the financial safety net in any country and also contributes to financial stability.

The National Treasury’s 2021 Budget Review refers to a financial stability framework developed by the National Treasury and the SARB that defines the SARB’s mandated responsibilities. The SARB further acknowledges its responsibility to mitigate the build-up of risks and vulnerabilities that could threaten the stability of the domestic financial system, and a crisis management framework for systemic risks and events.

Consumer protection and market conduct

The 2011 Policy Document contemplates improving market conduct regulation, including ramping up consumer education and introducing a retail banking services market conduct regulator. The FSR Act established the Financial Sector Conduct Authority (FSCA), which is mandated to, among others, protect financial customers by promoting the fair treatment of financial customers by financial institutions – including banks – and providing financial customers and potential financial customers with financial education programmes. The FSCA must also otherwise promote financial literacy, and the ability of financial customers and potential financial customers to make sound financial decisions.

Expanding access to financial services

In terms of the National Treasury's 2018 Budget Review, ‘financial inclusion’ refers to the provision of regulated financial services to the segments of society that are exposed to unavailable or inadequate financial services to enable social and economic development, particularly for:

low-income people;
women;
young people; and
small, medium and micro enterprises (SMMEs).

In October 2020, the National Treasury released for comment a draft policy titled ‘An inclusive financial sector for all’, which focuses on, among others, facilitating a more diversified provider and distribution base for financial services in South Africa.

The Amended Financial Services Sector Code (the Code) was published on 1 December 2017 in terms of the Broad-Based Black Economic Empowerment Act 2003 (the BBBEE Act). The Code applies to any person that conducts, among others, the business of banking in the South African financial sector. The Code aims to broaden and hasten the transformation process by making financial services accessible to the previously unbanked and underserved. The Code targets empowerment financing and access to financial services in sectors such as:

affordable housing;
black-owned or controlled SMMEs;
agriculture; and
transformational infrastructure.

In terms of the 2021 Budget Review, the Financial Sector Transformation Council is reviewing and developing the targets for management control and skills development, socio-economic development and consumer education, retirement funds and ownership, access to financial services, preferential procurement, and empowerment financing.

Among the initiatives planned pursuant to this policy objective is for the government to provide further support to cooperative banks (member-owned financial institutions) and dedicated banks (savings and loan financial institutions the activities of which are limited to the funding of risk-free or lower-risk retail assets to reduce the bank-default risk of depositors), including Postbank. The 2011 Policy Document identifies Postbank as among the financial institutions best suited to take the lead in satisfying the financial services needs of rural and lower-income communities in South Africa, and seeks to expand Postbank’s products and services to communities that have little or no access to commercial banking services. In terms of the 2018 Budget Review, Postbank has a temporary banking licence and an application for a full banking licence has been submitted to the SARB. The Banks Amendment Bill 2018 seeks to allow state-owned companies such as Postbank to register and conduct the business of a bank.

Financial integrity and combating financial crime

The 2011 Policy Document contemplates measures being taken to promote transparency to the financial sector by requiring financial institutions to conduct due diligence on their customers as well as maintain customer and transaction records that are accessible by supervisory and investigating authorities.

Regulated institutions

What are the defining characteristics of a bank to be caught by the banking laws and regulations? Is non-bank fintech regulated differently?

The BA regulates banking activities in South Africa. In summary, it states that no person shall conduct the business of a bank unless such a person is a public company and is registered as a bank in terms of the BA or has been authorised by the Prudential Authority to conduct the business of a bank through a branch of a foreign bank.

The BA defines 'the business of a bank' as:

the acceptance of deposits from the general public as a regular feature of the business in question;
the soliciting of or advertising for deposits;
the utilisation of money, or of the interest or other income earned on money accepted by way of a deposit:

for the granting by any person, acting as lender in such a person's own name – or through the medium of a trust or a nominee – of loans to other persons;
for investment by any person, acting as investor in such a person's own name or through the medium of a trust or a nominee; or
for the financing, wholly or to any material extent, by any person of any other business activity conducted by such a person in his or her own name through the medium of a trust or a nominee;

the obtaining, as a regular feature of the business in question, of money through the sale of an asset to any person other than a bank, subject to an agreement in terms of which the seller undertakes to purchase from the buyer at a future date the asset so sold or any other asset; or
any other activity that the Prudential Authority has, after consultation with the governor of the SARB and by notice in the Gazette, declared to be the business of a bank.

Other financial services as well as fintech services and products fall within the ambit of the FSR Act, which governs the rendering of financial services and financial institutions other than banks.

In terms of the Financial Advisory and Intermediary Services Act 2002 (the FAIS Act), a financial services provider means any person who:

furnishes advice;
furnishes advice and renders services; or
renders an intermediary service.

The Financial Intelligence Centre (FIC) and the National Payments System Department of the SARB issued Draft Directive 1 of 2019 and Draft FIC Guidance Note 102 as part of a joint consultation process on the administration of electronic funds transfers in accordance with Recommendation 16 of the Financial Action Task Force (FATF) regarding wire transfers. The aim of the directives is to regulate domestic and cross-border electronic transfers in relation to accountable institutions (including banks) that facilitate or enable the source or receipts of these transfers, or when they act as a broker in this regard. They further aim to permit the SARB to review certain transfers and determine if they threaten the national payment system, and they place an obligation on accountable institutions to disclose certain information regarding the origin of electronic fund transfers.

Fintech is not fully regulated in South Africa. The current regulations in the financial sector only provide guidance, and the uniqueness of fintech requires further and specific regulation.

The Intergovernmental Fintech Working Group (IFWG) published its first Fintech Landscaping Report on 22 January 2020. The aim of the report was to make the fintech market clearer so that the regulator can understand and be able to manage risk in the fintech space. In terms of the 2021 Budget Review, innovators have been using a hub established in April 2020 to engage regulators quickly and collectively on queries related to their innovations. The hub also allows live testing of new financial products or services in a controlled setting, and four products and services have been approved through this facility. Regulators have published policies and regulatory stances on cryptoassets, open banking (ie, the system and process of allowing third-party applications to access and control banking and related financial services) and the regulation of digital platforms (such as crowdfunding platforms) on the hub.

Due to South Africa's membership of the G20 and to adhere to global over-the-counter (OTC) derivatives reform, new OTC derivatives regulations were enacted in February 2018 under the Financial Markets Act 2012. The regulations define an OTC derivative as an unlisted derivative instrument that is executed – whether confirmed or not confirmed – excluding foreign exchange, spot contracts and physically settled commodity derivatives. The regulations also specifically aim to regulate the conduct of OTC derivative providers, which have been defined as persons who, as a regular feature of their business and transacting as principal:

originate, issue or sell OTC derivatives; or
make a market in OTC derivatives.

Most South African and some foreign banks in South Africa will qualify as OTC derivative providers.

Do the rules vary depending on the size or complexity of the banking institution?

No, an institution with the defining characteristics of a bank is regulated as such. Mutual banks and cooperative banks, however, have less stringent requirements compared to commercial banks.

Mutual banks

Mutual banks report to the SARB. Mutual banks have similar obligations as commercial banks under the FIC Act, the FAIS Act, the FSR Act and the National Credit Act 2005 (NCA). However, the Mutual Banks Act 1993 (MBA) is a specific statute that addresses the particular qualities and characteristics of mutual banks and their trading.

In terms of section 9 of the MBA, no person shall hold himself or herself out to be a mutual bank unless the person is registered as a mutual bank. Mutual banks are required to have accumulated share capital and unimpaired reserve funds as prescribed. Moreover, liquid assets to a value not less than the bank’s aggregate liabilities must be held at all times and such assets cannot be pledged or encumbered. All mutual banks must annually apply for a licence from the Registrar of Banks.

Cooperative banks

The Cooperative Banks Act 2007 (CBA) is the main piece of legislation that regulates cooperative financial institutions that are willing to register as cooperative banks under the CBA.

The CBA applies to cooperative banks registered under it as well as to any cooperative registered under the CBA that takes deposits, has 200 or more members and holds deposits to the value of one million rand or more.

Primary and secondary legislation

Summarise the primary statutes and regulations that govern the banking industry.

Regulation and supervision

The legal framework for the regulation and supervision of the banking sector in South Africa consists of the following pieces of legislation, and related regulations, directives, circulars and guidance notes:

the BA regulates the business of public companies taking deposits from the public and related matters;
the CBA regulates deposit-taking financial services cooperatives that are capitalised by their members and qualify as cooperative banks;
the MBA regulates the operations of informal financial structures such as credit unions, building societies and stokvels (general savings, burial or investment societies) that qualify as mutual banks;
the National Payment Systems Act 1998 regulates the management, administration, operation, regulation and supervision of payment, clearing and settlement systems in South Africa; and
the Companies Act 2008 (CA) regulates the organisation and management of companies generally.

Legislation concerning the oversight of the banking industry includes the following.

The South African Reserve Bank Act 1989 regulates the SARB and the monetary system in general.
The FSR Act regulates financial sector laws and regulators and provides for prudential standards applicable to, and the supervision of, financial institutions, including banks.
The Currency and Exchanges Act 1933 regulates legal tender, currency, exchanges and banking. The regulations published on 1 December 1961 under this act limit the extent to which South African residents and companies may transfer funds abroad. The exchange control rules are also set out in the Currency and Exchange Manuals and related client guideline documents implemented with effect from 1 August 2016.
The Financial Institutions (Protection of Funds) Act 2001 sets out the laws relating to the investment, safe custody and administration of funds and trust property by financial institutions.
The Promotion of Administrative Justice Act 2000 gives effect to the right to administrative action that is lawful, reasonable and procedurally fair, and applies to any administrative action taken by a financial sector regulator in terms of the FSR Act or any specific financial sector law.

Stability and soundness of financial institutions

The FSR Act has the objective of achieving a stable financial system that works in the interests of financial customers, and supports balanced and sustainable economic growth in South Africa.

The Financial Markets Act 2012 regulates financial markets, prohibits insider trading and other market abuses, and regulates and controls securities trading.

Consumer protection and market conduct

The NCA aims to promote a fair and non-discriminatory marketplace for access to consumer credit, and to prohibit certain unfair credit and credit-marketing practices as well as reckless credit granting.

The Consumer Protection Act 2008 (CPA) promotes a fair, accessible and sustainable marketplace for consumer products and services (including banking services). The CPA seeks, among others, to establish national norms and standards relating to consumer protection, and to prohibit certain unfair marketing and business practices.

The FAIS Act regulates the provision of financial advisory and intermediary services to clients.

The Competition Act 1998 applies to the investigation, control and evaluation of restrictive practices, abuse of dominant position and mergers.

The Promotion of Access to Information Act 2000 gives effect to the constitutional right of access to any information held by another person and required for the exercise or protection of any rights.

The Protection of Personal Information Act 2013 (the POPI Act), among others:

establishes minimum requirements for the processing of personal information by public and private bodies;
provides for the rights of persons regarding unsolicited electronic communications and automated decision-making; and
regulates the flow of personal information across the borders of South Africa.

The Electronic Communications and Transactions Act 2002 facilitates and regulates electronic communications and transactions.

The Home Loan and Mortgage Disclosure Act 2000 promotes fair lending practices, which requires disclosure by financial institutions of information regarding the provision of home loans.

Expanding access to financial services

The BBBEE Act establishes a legislative framework for the promotion of black economic empowerment. The Code published in terms of this legislation requires financial institutions to promote transformation in the financial services sector.

The South African Postbank Limited Act 2010 establishes the Postbank Division of the Post Office to, among others, conduct the business of a bank that will encourage and attract savings among South Africans.

Financial integrity and combatting financial crime

The Financial Intelligence Centre Act 2001 (FICA) seeks to combat money laundering activities as well as the financing of terrorist and related activities by, among others, imposing certain duties on institutions to identify and conduct due diligence in respect of the clients with whom they have business relationships.

The Prevention of Organised Crime Act 1998 criminalises money laundering, while the Protection of Constitutional Democracy Against Terrorism and Related Activities Act 2004 criminalises terror financing.

Regulatory authorities

Which regulatory authorities are primarily responsible for overseeing banks?

The SARB is responsible for, among others, supervising the banking sector and ensuring the effective functioning of the national payment system. The oversight of the soundness of the domestic banking system and financial stability has been delegated to the Bank Supervision Department within the SARB. The Bank Supervision Department is accountable to the Minister of Finance and is required to submit an annual report on its activities.

FICA establishes the Financial Intelligence Centre, which is required to supervise and enforce compliance with FICA or any directive made in terms of FICA by accountable institutions – including banks – for the purposes of its objective. The Financial Intelligence Centre is accountable to the Minister of Finance.

The National Credit Regulator is established in terms of the NCA to promote and support the development (where the need exists) of a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry to serve the needs of:

historically disadvantaged persons;
low-income persons and communities; and
remote, isolated or low-density populations and communities.

The National Credit Regulator is responsible for regulating the consumer credit industry by, among others, registering and suspending or cancelling the registration of credit providers, including banks. The National Credit Regulator is accountable to the Minister of Trade, Industry and Competition, who is currently responsible for consumer credit matters.

The FSR Act establishes the following new entities to regulate all financial institutions, including banks.

The Prudential Authority has been established within the administration of the SARB to promote and enhance the safety and soundness of financial institutions and market infrastructures as well as to protect financial customers against the risk of financial institutions failing to meet their obligations.
The Ombud Council is empowered to recognise ombudsman schemes and oversee alternative dispute resolution processes for complaints about financial institutions in relation to financial products, financial services and services provided by market infrastructures.
The FSCA has replaced the FSB as supervisor of South Africa’s non-banking financial services industry.

The FSCA is, subject to the concurrence of the SARB, responsible for making standards that impose requirements on providers of payment services or that are aimed at assisting in maintaining financial stability.

The Prudential Authority, the FSCA, the National Credit Regulator and the Financial Intelligence Centre follow the directives of the governor of the SARB in relation to an event or circ*mstance that is a systemic event and may reasonably be expected to have a substantial adverse effect on the financial system or on economic activity in South Africa.

The National Consumer Commission, established in terms of the CPA, enforces the CPA.

The Information Regulator, established in terms of the POPI Act, has the responsibility of monitoring and enforcing compliance with the provisions of the POPI Act by public and private bodies pertaining to data protection in South Africa. The Information Regulator must also ensure the protection of personal information that is being processed by such bodies.

Banks and controlling companies are only allowed to appoint auditors approved by the Prudential Authority. Where a bank or controlling company is unable to appoint an auditor that has been approved by the Prudential Authority, the Prudential Authority will appoint an auditor for the bank or controlling company (sections 61 and 62 of the BA).

Government deposit insurance

Describe the extent to which deposits are insured by the government. Describe the extent to which the government has taken an ownership interest in the banking sector and intends to maintain, increase or decrease that interest.

Following a discussion paper published by the SARB in May 2017 titled ‘Designing a deposit insurance scheme for South Africa’, the FSLA Act introduced an industry-funded deposit insurance scheme to protect qualifying depositors' funds up to a specific limit once a bank fails. The deposit insurance scheme will be managed by the SARB through a newly established Corporation for Deposit Insurance. Qualifying depositors will be guaranteed up to an amount of 100,000 rand per depositor.

The CBA requires the establishment of the Cooperative Banks Deposit Insurance Fund for the purposes of compensating members of cooperative banks (that paid contributions to the fund) for deposits lost as a result of a cooperative bank having been unable to repay the deposits from its members, up to a percentage or amount determined by the Minister of Finance.

The government of South Africa is not entitled to own any interest in the banking sector other than in relation to the state-owned Postbank.

Transactions between affiliates

Which legal and regulatory limitations apply to transactions between a bank and its affiliates? What constitutes an ‘affiliate’ for this purpose? Briefly describe the range of permissible and prohibited activities for financial institutions and whether there have been any changes to how those activities are classified.

In terms of the BA, a bank must manage its business so that the aggregate of the following amounts – less the excess amount of qualifying primary and secondary capital and reserve funds – does not at any time exceed 10 per cent of the bank’s aggregate amount of deposits, current accounts and other creditors:

its investments in debentures or preference shares of any of its associates (other than subsidiaries of which the main object is the acquisition and holding or development of immovable property), a bank or mutual bank in which debentures or preference shares are not convertible into ordinary shares;
its advances to any such associates; and
its guarantees or other instrument relating to the liabilities or contingent liabilities of such associates.

For the purposes of this provision, an ‘associate’ in relation to a bank refers to:

any subsidiary or holding company of that bank, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary; or
any juristic person to whom the board of directors is accustomed to act in accordance with the directions or instructions of that bank, including any trust controlled or administered by that bank.

The terms ‘holding company’, ‘subsidiary’ and ‘control’ have the meanings given to them in the CA.

The Prudential Authority must approve any transaction by a bank or its associate to:

establish or acquire a subsidiary within or outside South Africa, or enter into an agreement having the effect that any company becomes its subsidiary within or outside South Africa;
invest in a joint venture within or outside South Africa if the investment (alone or together with one or more investments already made by the bank in that joint venture) results in the bank being exposed to an amount representing more than 5 per cent of its capital and reserves and to make any further investment for so long as the bank is exposed; a joint venture means a contractual arrangement between two or more persons, one or more of whom is a bank or a controlling company, in terms whereof the parties undertake an economic activity that is subject to their joint control;
open or acquire a branch office outside South Africa;
acquire an interest in any undertaking that has its registered office or principal place of business outside South Africa;
create or acquire a trust of which the bank is a major beneficiary outside South Africa;
establish or acquire any financial or other business undertaking under its direct or indirect control outside South Africa;
establish or acquire a representative office outside South Africa; or
create or acquire a division within or outside South Africa by means of an arrangement or agreement with any person having the effect that such a person conducts his or her business through or by means of the division.

A bank or its controlling company must disclose to the Prudential Authority details of:

any subsidiary it has established or acquired;
any joint venture in which it has invested;
an undertaking in which it has acquired an interest; or
any trust or financial or other business undertakings that it has established or acquired.

The BA prohibits a bank from:

holding shares in any company of which such a bank is a subsidiary;
lending money to any person against security of its own shares or of shares of that bank’s controlling company; and
before provision has been made out of profits for any amount representing the cost of organisation or extension, or the purchase of a business, a loss (including a loss originating from the sale of an asset) or bad debts:
- opening any branch or agency or any further branch or agency, or paying out dividends on its shares; and
- concluding a repurchase agreement in respect of a fictitious asset or an asset created by means of a simulated transaction;
- purporting to have concluded a repurchase agreement without:
  - such an agreement being substantiated by a written document signed by the other party thereto; and
  - the details of such an agreement being recorded in the accounts of the bank as well as in the accounts, if any, kept by the bank in the name of such other party; or
- paying out dividends from its share capital without the prior written approval of the Prudential Authority.

A bank must hold all its assets in its own name, excluding any asset that:

is held pursuant to a bona fide hypothec to secure an actual or potential liability;
is held in the name of another person with the written approval of the Prudential Authority; or
falls within a category of assets designated by the Prudential Authority as assets that may be held in the name of another person.

Regulatory challenges

What are the principal regulatory challenges facing the banking industry?

The FSR Act requires the SARB, in collaboration with other state organs, to ensure financial stability. Differences in interpretation of the new regulatory requirements pursuant to the FSR Act and related legislation may cause disputes. For instance, the FSR Act grants the Prudential Authority broad powers to require a bank to take action to avoid risks arising from, among others:

conducting its business in an improper or financially unsound way;
the likelihood of the bank contravening a financial sector law; and
the likelihood of the bank being involved in a financial crime or causing or contributing to instability in the financial system.

The implementation of such provisions of the FSR Act may require banks to implement new internal processes and procedures or otherwise restrict their powers and actions. Banks may wish to challenge such restrictions.

Notwithstanding the above, the SARB continues to hold the view that, due to the inherent risk of cryptoassets and their unregulated nature, cryptoassets cannot be classified as legal tender. Until the SARB decides otherwise, cryptoassets will not be guaranteed by the SARB, and cryptoassets operate independently from the SARB and users. A merchant may refuse to accept cryptoassets as a payment instrument without being in breach of the law. Currently, the SARB does not oversee, supervise or regulate cryptoassets. The IFWG aims to direct and develop a regulatory framework regarding cryptoassets in South Africa. Amendments to the current regulatory framework are still in their infancy.

Consumer protection

Are banks subject to consumer protection rules?

Other than the provisions of the NCA, the CPA and the FAIS Act, banks are subject to scrutiny by competition authorities of their compliance with the provisions of the Competition Act 1998 regulating restrictive market practices. The Competition Act 1998 prohibits, among others, an agreement between – or concerted practice by – firms directly or indirectly fixing a purchase price, a selling price or any other trading condition. On 15 February 2017, the Competition Commission filed a complaint referral initiating proceedings against certain banks at the Competition Tribunal alleging that certain banks had entered into an agreement or engaged in a concerted practice to fix bids, offers and bid-offer spreads as well as to allocate customers and suppliers in respect of trade in the US dollar–rand currency pair. As at February 2022, the Competition Commission has indicted 28 banks (some local and some foreign) for fixing the US dollar–rand exchange rate.

On 3 July 2020, the FSCA introduced the Conduct Standard for Banks (the Standard). This regulatory framework allows the FSCA to critically and promptly supervise the market conduct of the banking sector in South Africa, in accordance with its mandate as set out in the FSR Act. The Standard establishes high-level requirements to be adhered to by the banking sector and is aimed at ensuring the fair treatment of financial customers.

Section 5(1)(d) of the Standard requires a bank to ensure that the terms, conditions and requirements in a contract between the bank and its retail financial customer are not unfair. Section 5(2) clarifies that, while not limiting the prohibition in section 5(1)(d), a term, condition or requirement in a contract will be unfair if it:

would cause a material and unreasonable imbalance in the parties' rights and obligations under the contract;
is not reasonably necessary to safeguard the legitimate interests of the financial institution that would be unjustly advantaged by the term, condition or requirement;
would result in an unfair outcome (financial or otherwise) to a retail financial customer if it were applied or relied on;
unreasonably requires a retail financial customer, whether as a condition to enter into a transaction or otherwise, to waive any right or release the bank of any obligation or liability.

Future changes

In what ways do you anticipate the legal and regulatory policy changing over the next few years?

A study on South Africa’s bank practices was recently prepared by the World Bank and published for public comment by the National Treasury. The report is titled ‘South Africa Retail Banking Diagnostic: Treating Customers Fairly in relation to Transactional Accounts and Fixed Deposits’. The report assesses the conduct of retail banks and makes recommendations that are intended to inform the FSCA’s approach to regulating the way in which banks treat their customers in emerging market conduct regulations. The report identifies potential shortcomings in bank conduct and recommends, among others, ensuring that banks:

focus on suitability for customers when developing account and deposit products;
create transactional accounts that respond to the needs of low-income customers; and
improve the disclosure of timely, clear and comparable information to account and deposit product customers.

The National Treasury also published a second draft of its Conduct of Financial Institutions Bill (the COFI Bill) for public comment in September 2021. The COFI Bill aims to improve market conduct in South Africa by streamlining the financial sector laws that regulate the conduct of financial institutions and implementing policy, including in relation to the fair treatment of financial customers.

The Prudential Authority and the FSCA are entitled to issue:

prudential and conduct standards;
guidance notices on the application of the applicable financial sector laws; and
interpretation rulings confirming the interpretation or application of specified legal provisions.

In December 2021, the Prudential Authority and the FSCA issued a draft joint standard on sound practices and processes surrounding cybersecurity and cyber resilience for financial institutions. This standard was aimed at the prevention of, response to and recovery from cyberattacks.

Law stated date

Correct on

Give the date on which the information above is accurate.

February 2021.