Financial Sector Regulation Act, 2017

Act 9 of 2017

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This is the version of this Act as it was from 24 March 2023 to 31 March 2023. Read the latest available version.
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Act 9 of 2017
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South Africa

Financial Sector Regulation Act, 2017

Act 9 of 2017

  • Published in Government Gazette 41060 on 22 August 2017
  • Assented to on 21 August 2017
  • There are multiple commencements
    • Provisions Status
    Unknown provisions commenced on 9 February 2018 by Government Notice R99 of 2018.
    Note: See Schedule 4 for details of provisions that commenced on this date
    Chapter 1, Part 1, section 1; Chapter 7 (section 97–110); Chapter 17, Part 5, section 288; Part 6, section 301(4), section 304 commenced on 29 March 2018 by General Notice 169 of 2018.
    Note: Date of commencement of Schedules 1 and 4, insofar as they repeal the Policy Board for Financial Services and Regulation Act 141 of 1993 and the Insolvency Act 24 of 1936
    Chapter 1, Part 1, section 2–6; Part 2 (section 7–8); Part 3 (section 9–10); Chapter 2 (section 11–31); Chapter 3 (section 32–55); Chapter 4 (section 56–75); Chapter 5, Part 1 (section 76–78); Part 2 (section 79–82); Chapter 6, Part 1, section 87–89; Part 2 (section 91–96); Chapter 8, Part 1, section 111(1)(a), (2)–(7); Part 2 (section 112–124); Part 3 (section 125–128); Chapter 9 (section 129–140); Chapter 10 (section 141–156); Chapter 13 (section 167–174); Chapter 15 (section 218–236); Chapter 17, Part 1 (section 250–255); Part 3, section 265–268, section 271–276; Part 4, section 277–286; Part 6, section 289, section 291–300, section 301(1), (3)–(5), section 303 commenced on 1 April 2018 by General Notice 169 of 2018.
    Unknown provisions commenced on 7 May 2018 by General Notice 169 of 2018.
    Note: See Schedule 4 for details of provisions that commenced on this date
    Unknown provisions commenced on 1 August 2018 by General Notice 169 of 2018.
    Note: See Schedule 4 for details of provisions that commenced on this date
    Chapter 17, Part 6, section 290 commenced on 28 September 2018 by Government Notice 1019 of 2018.
    Note: See Schedule 4 for details regarding the dates of commencement of section 290
    Chapter 6, Part 1, section 90; Chapter 17, Part 3, section 270; Part 6, section 301(2), (6)–(7) commenced on 1 October 2018 by General Notice 169 of 2018.
    Chapter 11 (section 157–159) commenced on 1 January 2019 by General Notice 169 of 2018.
    Chapter 12 (section 160–166) commenced on 1 March 2019 by General Notice 169 of 2018.
    Unknown provisions commenced on 18 March 2019 by General Notice 142 of 2019.
    Note: See Schedule 4 for details of provisions that commenced on this date
    Unknown provisions commenced on 1 April 2019 by Government Notice R99 of 2018.
    Note: See Schedule 4 for details of provisions that commenced on this date
    Chapter 14 (section 175–217) commenced on 1 November 2020 by General Notice 169 of 2018.
    Unknown provisions commenced on 31 May 2021 by General Notice 169 of 2018.
    Note: See Schedule 4 for details of provisions that commenced on this date
    Chapter 11, Part 1, section 159(4); Chapter 11A (section 159A–159C) commenced on 31 December 2022 by Act 22 of 2022.
    Chapter 12A, Part 6, section 166AE, section 166AH–166AS, section 166AU–166BB; Part 7, section 166BF commenced on 24 March 2023 by Act 23 of 2021.
    Chapter 16 (section 237–249); Chapter 17, Part 6, section 302 commenced on 1 April 2023 by General Notice 169 of 2018.
    Chapter 12A, Part 1–4 commenced on 1 June 2023 by Government Notice 3202 of 2023.
    Unknown provisions commenced on 1 April 2024 by Government Notice 4468A of 2024.
    Unknown provisions commenced on 1 June 2024 by General Notice 169 of 2018.
    Chapter 5, Part 3 (section 83–86); Chapter 8, Part 1, section 111(1)(b); Chapter 12A, Part 5; Part 6, section 166AF–166AG, section 166AT, section 166BC; Part 7, section 166BD–166BE; Chapter 17, Part 2 (section 256–264); Part 3, section 269; Part 4, section 287; Part 5 (in part); Part 6 (in part); Part 7 (section 305) not yet commenced.
  • [This is the version of this document as it was from 24 March 2023 to 31 March 2023.]
  1. [Amended by Insurance Act, 2017 (Act 18 of 2017) on 1 July 2018]
  2. [Amended by Financial Sector Laws Amendment Act, 2021 (Act 23 of 2021) on 29 April 2022]
  3. [Amended by General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 (Act 22 of 2022) on 31 December 2022]
  4. [Amended by Financial Sector Laws Amendment Act, 2021 (Act 23 of 2021) on 24 March 2023]
To establish a system of financial regulation by establishing the Prudential Authority and the Financial Sector Conduct Authority, and conferring powers on these entities; to preserve and enhance financial stability in the Republic by conferring powers on the Reserve Bank; to establish the Financial Stability Oversight Committee; to regulate and supervise financial product providers and financial services providers; to improve market conduct in order to protect financial customers; to provide for co-ordination, co-operation, collaboration and consultation among the Reserve Bank, the Prudential Authority, the Financial Sector Conduct Authority, the National Credit Regulator, the Financial Intelli­gence Centre and other organs of state in relation to financial stability and the functions of these entities; to establish the Financial System Council of Regulators and the Financial Sector Inter-Ministerial Council; to provide for making regulatory instruments, including prudential standards, conduct standards and joint standards; to make provision for the licensing of financial institutions; to make comprehensive provision for powers to gather information and to conduct supervisory on-site inspections and investigations; to make provision in relation to significant owners and beneficial owners of financial institutions and the supervision of financial conglomerates in relation to eligible financial institutions that are part of financial conglomerates; to provide for powers to enforce financial sector laws, including by the imposition of administrative penalties; to provide for the protection and promotion of rights in the financial sector as set out in the Constitution; to establish the Ombud Council and confer powers on it in relation to ombud schemes; to provide for coverage of financial product and financial service providers by appropriate ombud schemes; to establish the Financial Services Tribunal as an independent tribunal and to confer on it powers to reconsider decisions by financial sector regulators, the Ombud Council and certain market infrastructures; to establish the Financial Sector Information Register and make provision for its operation; to provide for information sharing arrangements; to create offences; to provide for regulation-making powers of the Minister; to amend and repeal certain financial sector laws; to make transitional and savings provisions; and to provide for matters connected therewith.[longtitle amended by section 64 of Act 22 of 2022]BE IT ENACTED by the Parliament of the Republic of South Africa, as follows:—

Chapter 1
Interpretation, object and administration of Act

Part 1 – Interpretation

1. Definitions

(1)In this Act, unless the context indicates otherwise—"administrative action" has the same meaning ascribed to it in terms of section 1 of the Promotion of Administrative Justice Act;"administrative action committee" means a committee established in terms of section 87;"administrative action procedure" means a procedure determined in terms of section 92;"administrative penalty order" means an order in terms of section 167;"Banks Act" means the Banks Act, 1990 (Act No. 94 of 1990);"benchmark" means any index—(a)by reference to which the amount payable under a financial instrument or a financial contract, or the value of a financial instrument, is determined; or(b)that is used to measure the performance of an investment fund with the purpose of tracking the return of such index or of defining the asset allocation of a portfolio or of computing the performance fees;"business document" means a document held by a person in connection with carrying on a business;"business premises" means premises, including a building or a part of a building, used by a person for carrying on a business;"Chairperson" means the person holding the office of the Chairperson of the Tribunal in terms of section 220(4), and includes a person acting as the Chairperson;"Chief Executive Officer" means the Chief Executive Officer of the Prudential Authority appointed in terms of section 36(1), and includes a person acting as the Chief Executive Officer;"Chief Ombud" means a person appointed as the Chief Ombud of the Ombud Council in terms of section 188;"collective investment scheme" has the same meaning ascribed to it in terms of section 1 of the Collective Investments Schemes Control Act, 2002 (Act No. 45 of 2002);"Commissioner", in relation to the Financial Sector Conduct Authority, means the Commissioner of the Financial Sector Conduct Authority appointed in terms of section 61 (1), and includes a person acting as the Commissioner;"Companies Act" means the Companies Act, 2008 (Act No. 71 of 2008);"company" has the same meaning ascribed to it in terms of section 1 of the Companies Act;"Competition Commission" means the Competition Commission established in terms of section 19 of the Competition Act, 1998 (Act No. 89 of 1998);"conduct standard" means a standard made in terms of section 106;"Constitution" means the Constitution of the Republic of South Africa, 1996;"Consumer Protection Act" means the Consumer Protection Act, 2008 (Act No. 68 of 2008);"contractor" means a person with whom a financial institution has entered into an outsourcing arrangement but does not include an independent contractor as described in the definition of "staff member";"control function" means each of the following:(a)The risk management function;(b)the compliance function;(c)the internal audit function; and(d)the actuarial function;"Council for Medical Schemes" means the Council for Medical Schemes established in terms of section 3 of the Medical Schemes Act;"Court" means a Superior Court as defined in section 1 of the Superior Courts Act, 2013 (Act No. 10 of 2013);"credit" has the same meaning ascribed to it in section 1 of the National Credit Act;"credit agreement" has the same meaning ascribed to it in section 1 of the National Credit Act;"debarment order" means an order made in terms of section 153 or 205;"Deputy Commissioner" means a person appointed as a Deputy Commissioner in terms of section 61(2), and includes a person acting as a Deputy Commissioner;"Deputy Governor" means a person appointed in terms of section 4 or 6(1)(a) of the Reserve Bank Act as a Deputy Governor of the Reserve Bank;"Director-General" means the Director-General of the National Treasury, and includes a person acting as the Director-General;"disqualified person" means a person who—(a)is engaged in the business of a financial institution, or has a direct material financial interest in a financial institution, except as a financial customer;(b)is a member of the Cabinet, a member of the Executive Council of a province, a member of the National Assembly, a permanent delegate to the National Council of Provinces, a member of a provincial legislature or a member of a municipal council;(c)is an office-bearer of, or is in a remunerated leadership position in, a political party;(d)has at any time been removed from an office or position of trust;(e)is or has been subject to debarment in terms of a financial sector law;(f)is or has at any time been sanctioned for contravening a law relating to the regulation or supervision of financial institutions, or the provision of financial products or financial services or a corresponding law of a foreign jurisdiction;(g)is or has at any time been convicted of—(i)theft, fraud, forgery, uttering of a forged document, perjury or an offence involving dishonesty, whether in the Republic or elsewhere; or(ii)an offence in terms of the Prevention of Corruption Act, 1958 (Act No. 6 of 1958), the Corruption Act, 1992 (Act No. 94 of 1992), Parts 1 to 4, or section 17, 20 or 21 of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), or a corresponding offence in terms of the law of a foreign country;(h)is or has been convicted of any other offence committed after the Constitution came into effect, where the penalty imposed for the offence is or was imprisonment without the option of a fine;(i)is subject to a provisional sequestration order or is an unrehabilitated insolvent;(j)is disqualified from acting as a member of a governing body of a juristic person in terms of applicable legislation; or(k)is declared by the High Court to be of unsound mind or mentally disordered, or is detained in terms of the Mental Health Care Act, 2002 (Act No. 17 of 2002);"document" includes —(a)a book, record, security, invoice, account and any other information appearing on a physical object;(b)information stored or recorded electronically, digitally, photographically, magnetically or optically; and(c)any device on, or by means of, which information is recorded or stored;"eligible financial institution" means each of the following:(a)A financial institution licensed or required to be licensed as a bank in terms of the Banks Act;(b)a financial institution registered as a long-term insurer in terms of the Long-term Insurance Act or a short-term insurer in terms of the Short-term Insurance Act or licensed or required to be licensed in terms of the Insurance Act;[paragraph (b) substituted by section 72(1) of Act 18 of 2017](c)a market infrastructure; and(d)a financial institution prescribed in Regulations for the purposes of this definition;"enforceable undertaking" means an undertaking referred to in section 151 or 203"Executive Committee" means the Committee established in terms of section 60;"Financial Advisory and Intermediary Services Act" means the Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002);"financial conglomerate" means a group of companies designated as a financial conglomerate in terms of section 160;"financial crime" includes an offence in terms of—(a)a financial sector law;(b)sections 2, 4, 5 and 6 of the Prevention of Organised Crime Act, 1998 (Act No. 121 of 1998);(c)the Financial Intelligence Centre Act; or(d)section 4 of the Protection of Constitutional Democracy against Terrorist and Related Activities Act, 2004 (Act No. 33 of 2004);"financial customer" means a person to, or for, whom a financial product, a financial instrument, a financial service or a service provided by a market infrastructure is offered or provided, in whatever capacity, and includes —(a)a successor in title of the person; and(b)the beneficiary of the product, instrument or service;"financial inclusion" means that all persons have timely and fair access to appropriate, fair and affordable financial products and services;"financial institution" means any of the following, other than a representative:(a)A financial product provider;(b)a financial service provider;(c)a market infrastructure;(d)a holding company of a financial conglomerate; or(e)a person licensed or required to be licensed in terms of a financial sector law;"financial instrument" means—(a)a share as defined in section 1 of the Companies Act;(b)a depository receipt and other equivalent instruments;(c)a debt instrument such as a debenture or a bond, but not a credit agreement;(d)money market securities as defined in section 1(1) of the Financial Markets Act;(e)a derivative instrument as defined in section 1(1) of the Financial Markets Act; or(f)a warrant, certificate, securitisation instrument or other instrument acknowledging, conferring or creating rights to subscribe to, acquire, dispose of, or convert, the financial instruments referred to in paragraphs (a) to (e);"Financial Intelligence Centre" means the Financial Intelligence Centre established in terms of section 2 of the Financial Intelligence Centre Act;"Financial Intelligence Centre Act" means the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001);"Financial Markets Act" means the Financial Markets Act, 2012 (Act No. 19 of 2012);"Financial product" means a financial product as defined in section 2;"Financial product provider" means a person that, as a business or as part of a business, provides a financial product;"financial sector body" means each of the following:(a)The Prudential Authority;(b)the Financial Sector Conduct Authority;(c)the Tribunal;(d)the Ombud Council;(e)the Office of the Pension Funds Adjudicator; and(f)the Office of the Ombud for Financial Services Providers;"Financial Sector Conduct Authority" means the authority established in terms of section 56;"Financial sector law" means—(a)this Act;(b)a law listed in Schedule 1;(c)a Regulation made in terms of this Act or made in terms of a law referred to in Schedule 1; or(d)a regulatory instrument made in terms of this Act or made in terms of a law referred to in Schedule 1;"financial sector regulator" means —(a)the Prudential Authority;(b)the Financial Sector Conduct Authority;(c)the National Credit Regulator, but only in respect of Parts 2, 3 and 5 of Chapter 2, and Parts 1, 2 and 3 of Chapter 5; or(d)the Financial Intelligence Centre, but only in respect of Parts 2, 3 and 5 of Chapter 2, and Parts 1, 2 and 3 of Chapter 5;"financial service" means a financial service as defined in section 3;"financial service provider" means a person that, as a business or as part of a business, provides a financial service;"financial stability" means financial stability as defined in section 4;"Financial Stability Oversight Committee" means the committee established in terms of section 20;"financial system" means the system of institutions and markets through which financial products, financial instruments and financial services are provided and traded, and includes the operation of a market infrastructure and a payment system;"Financial System Council of Regulators" means the council established in terms of section 79(1);"financial year" means a period of 12 months commencing on 1 April of each year;"foreign financial instrument" means an instrument provided outside the Republic, or provided by a person outside the Republic, that is similar to, or corresponds to, a financial instrument;"foreign financial product" means a facility or arrangement provided outside the Republic, or provided by a person outside the Republic, that is similar to, or corresponds to, a financial product;"Friendly Societies Act" means the Friendly Societies Act, 1956 (Act No. 25 of 1956);"governing body" means—(a)in relation to a financial institution, a person or body of persons, whether elected or not, that manages, controls, formulates the policy and strategy of the financial institution, directs its affairs or has the authority to exercise the powers and perform the functions of the financial institution, and includes —(i)the general partner of an en commandite partnership or the partners of any other partnership;(ii)the members of a close corporation;(iii)the trustees of a trust;(iv)the board of directors of a company; and(v)the board of a pension fund referred to in section 7A of the Pension Funds Act; and(b)in relation to an ombud scheme, the body of persons that oversees the affairs of the ombud scheme;"Governor" means the person appointed in terms of section 4 or 6(1)(a) of the Reserve Bank Act as the Governor of the Reserve Bank;"group of companies" has the same meaning ascribed to it in terms of section 1 of the Companies Act;"head of a control function" means a person appointed by a financial institution to ensure the performance of a control function, and includes a person so appointed through an outsourcing arrangement;"holding company" means a holding company as defined in section 1 of the Companies Act, being a company incorporated in the Republic;"index" means any figure—(a)that is published or made available to the public; and(b)that is regularly determined—(i)entirely or partially by the application of a formula or any other method of calculation, or by an assessment; and(ii)on the basis of the value of one or more underlying assets or prices, and any derivative thereof; and(c)is determined to be an index for this purpose by the Financial Sector Conduct Authority;"industry ombud scheme" means an arrangement with the following characteristics:(a)The arrangement is established by one or more financial institutions;(b)the purpose of the arrangement is to facilitate mediation and resolution of complaints from financial customers about financial institutions that are members of the ombud scheme; and(c)mediation or resolution of the complaints in terms of the ombud scheme is undertaken by an ombud appointed in terms of the ombud scheme’s governing rules;"Insurance Act" means the Insurance Act, 2017 (Act No. 18 of 2017);[definition of "Insurance Act" inserted by section 72(1) of Act 18 of 2017]"Inter-Ministerial Council" means the Financial Sector Inter-Ministerial Council established in terms of section 83(1);"interpretation ruling" means a statement in terms of section 142;"inter-related" has the same meaning ascribed to it in terms of section 1 of the Companies Act;"investigator" means a person appointed as an investigator in terms of section 134;"joint standard" means a standard made in terms of section 107;"juristic person" includes —(a)a company, close corporation or co-operative incorporated or registered in terms of legislation whether in the Republic or elsewhere;(b)an association, partnership, club or other body of persons of whatever description, corporate or unincorporated;(c)a trust or trust fund;(d)an entity referred to in paragraph (a), (b) or (c) that is in liquidation, under business rescue proceedings or under judicial management; and(e)the estate of a deceased or insolvent person;"key person", in relation to a financial institution, means each of the following:(a)A member of the governing body of the financial institution;(b)the chief executive officer or other person in charge of the financial institution;(c)a person other than a member of the governing body of the financial institution who makes or participates in making decisions that—(i)affect the whole or a substantial part of the business of the financial institution; or(ii)have the capacity to affect significantly the financial standing of the financial institution;(d)a person other than a member of the governing body of the financial institution who oversees the enforcement of policies and the implementation of strategies approved or adopted by the governing body of the financial institution;(e)the head of a control function of the financial institution; and(f)the head of a function of the financial institution that a financial sector law requires to be performed;"legal practitioner" means a legal practitioner as defined in section 1 of the Legal Practice Act, 2014 (Act No. 28 of 2014);"leniency agreement" means an agreement referred to in section 156;"levy" means a levy imposed by a financial sector body in terms of legislation that empowers the imposition of a levy, and includes interest payable on an unpaid levy;"licence" includes a written licence, registration, approval, recognition, permis­sion, consent or any other authorisation in terms of a financial sector law, however it is described in that law, to provide a financial product, financial service or a market infrastructure;"Long-term Insurance Act" means the Long-term Insurance Act, 1998 (Act No. 10 of 1998);"market infrastructure" means each of the following, as they are defined in section 1(1) of the Financial Markets Act:(a)A central counterparty;(b)a central securities depository;(c)a clearing house;(d)an exchange; and(e)a trade repository;"Medical Schemes Act" means the Medical Schemes Act, 1998 (Act No. 131 of 1998);"Minister" means the Minister of Finance;"National Credit Act" means the National Credit Act, 2005 (Act No. 34 of 2005);"National Credit Regulator" means the National Credit Regulator established in terms of section 12 of the National Credit Act;"National Payment System Act" means the National Payment System Act, 1998 (Act No. 78 of 1998);"National Treasury" means the National Treasury established in terms of section 5 of the Public Finance Management Act;"ombud" means each of the following:(a)The Adjudicator as defined in section 1(1) of the Pension Funds Act;(b)the Ombud for Financial Services Providers as defined in section 1(1) of the Financial Advisory and Intermediary Services Act;(c)a person declared by a specific financial sector law to be a statutory ombud; and(d)a person who has the function, in terms of the rules of a recognised industry ombud scheme, of mediating or resolving complaints to which the scheme applies;"Ombud Board" means the Board of the Ombud Council established in terms of section 179(1);"Ombud Council" means the Ombud Council established in terms of section 175;"Ombud Council rule" means a rule made by the Ombud Council in terms of section 201;"ombud scheme" means —(a)an industry ombud scheme; or(b)a statutory ombud scheme;"organ of state" has the same meaning ascribed to it in terms of section 239 of the Constitution;"outsourcing arrangement", in relation to a financial institution, means an arrangement between a financial institution and another person for the provision to or for the financial institution of any of the following:(a)A control function;(b)a function that a financial sector law requires to be performed or requires to be performed in a particular way or by a particular person; and(c)a function that is integral to the nature of a financial product or financial service that the financial institution provides, or is integral to the nature of the market infrastructure,but does not include—(i)a contract of employment between the financial institution and a person referred to in paragraph (a) or (b) of the definition of "staff member"; or(ii)an arrangement between a financial institution and a person for the person to act as a representative of the financial institution;"panel" means a panel of the Tribunal constituted in terms of section 224;"panel list" means the list referred to in section 225;"panel member" means a member of a panel;"party", to proceedings on a reconsideration of a decision by the Tribunal, means—(a)the person who applied for the reconsideration; and(b)the decision-maker that made the decision;"payment service" means a service provided to a financial customer to facilitate payments to, or from, the financial customer;"payment system" has the same meaning ascribed to it in terms of section 1 of the National Payment System Act;"Pension Funds Act" means the Pension Funds Act, 1956 (Act No. 24 of 1956);"person" means a natural person or a juristic person, and includes an organ of state;"Promotion of Administrative Justice Act" means the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000);"Protection of Personal Information Act" means the Protection of Personal Information Act, 2013 (Act No. 4 of 2013);"provision of a benchmark" includes —(a)administering the arrangements for determining a benchmark;(b)collecting, analysing or processing input data for the purpose of determining a benchmark; and(c)determining a benchmark through the application of a formula or other method of calculation or by an assessment of input data provided for that purpose;"Prudential Authority" means the authority established in terms of section 32;"Prudential Committee" means the committee established in terms of section 41;"Prudential standard" means a standard made in terms of section 105;"Public Finance Management Act" means the Public Finance Management Act, 1999 (Act No. 1 of 1999);"qualifying stake" means, in respect of a financial institution that—(a)is a company, that a person, directly or indirectly, alone or together with a related or inter-related person—(i)holds at least 15% of the issued shares of the financial institution;(ii)has the ability to exercise or control the exercise of at least 15% of the voting rights attached to securities of the financial institution;(iii)has the ability to dispose of or control the disposal of at least 15% of the financial institution’s securities; or(iv)holds rights in relation to the financial institution that, if exercised, would result in the person, directly or indirectly, alone or together with a related or inter-related person—(aa)holding at least 15% of the securities of the financial institution;(bb)having the ability to exercise or control at least 15% of the voting rights attached to shares or other securities of the financial institution; or(cc)having the ability to dispose of or direct the disposal of at least 15% of the financial institution’s securities;(b)is a close corporation, that a person, directly or indirectly, alone or together with a related or inter-related person, holds at least 15% of the members’ interests or controls, or has the right to control, at least 15% of members’ votes in the close corporation;(c)is a trust, that a person has, directly or indirectly, alone or together with a related or inter-related person—(i)the ability to exercise or control the exercise of at least 15% of the votes of the trustees;(ii)the power to appoint at least 15% of the trustees; or(iii)the power to appoint or change any beneficiaries of the trust;"recognised industry ombud scheme" means an industry ombud scheme that is recognised in terms of section 194;"Regulation" means a Regulation made in terms of section 288;"regulator’s directive" means a directive issued by a financial sector regulator in terms of section 143, 144 or 159;"regulatory instrument" means each of the following:(a)A prudential standard;(b)a conduct standard;(c)a joint standard;(d)an Ombud Council rule;(e)a determination of fees in terms of section 237(1)(a);(f)an instrument identified as a regulatory instrument in a financial sector law; and(g)an instrument amending or revoking an instrument referred to in paragraphs (a) to (f);"related party", in relation to a person (the "first person"), means a person connected to the first person in a manner described in section 2(1)(a), (b) or (c) of the Companies Act;"Register" means the Financial Sector Information Register referred to in section 256;"representative", in relation to a financial institution, means a representative of the institution in terms of the Financial Advisory and Intermediary Services Act;"Reserve Bank" means the South African Reserve Bank as referred to in section 223 of the Constitution, read with the Reserve Bank Act;"Reserve Bank Act" means the South African Reserve Bank Act, 1989 (Act No. 90 of 1989);"responsible authority", for a financial sector law, means the responsible authority for the financial sector law as defined in section 5;"section 27 memorandum of understanding" means a memorandum of understanding referred to in section 27;"section 77 memorandum of understanding" means a memorandum of understanding referred to in section 77;"securities services" has the same meaning ascribed to it in terms of section 1(1) of the Financial Markets Act;"service provided by a market infrastructure" means business conducted or a function or duty performed by a market infrastructure in terms of the Financial Markets Act, and "services provided by market infrastructures" has a similar meaning;"Short-term Insurance Act" means the Short-term Insurance Act, 1998 (Act No. 53 of 1998);"significant owner", of a financial institution, means a significant owner of the institution as described in section 157;"special levy" means a levy imposed as a special levy by a financial sector body in terms of legislation that empowers the imposition of a levy;"specific financial sector law" means a financial sector law, other than this Act, regulating a specific type of financial product, financial service or market infrastructure;"staff member", of a person, means —(a)an employee, as defined in section 213 of the Labour Relations Act, 1995 (Act No. 66 of 1995);(b)a natural person who is seconded to the person;(c)a natural person who is engaged by the person on contract as an independent contractor to provide goods or services to the person or to perform functions or duties on behalf of the person under terms specified in the contract, but not in terms of an outsourcing arrangement;"standard" means any of the following:(a)A prudential standard;(b)a conduct standard; and(c)a joint standard;"statutory ombud" means each of the following:(a)The Adjudicator as defined in section 1(1) of the Pension Funds Act;(b)the Ombud for Financial Services Providers as defined in section 1(1) of the Financial Advisory and Intermediary Services Act; and(c)a person declared by a specific financial sector law to be a statutory ombud;"statutory ombud scheme" means a scheme declared by a specific financial sector law to be a statutory ombud scheme;"supervised entity" means each of the following:(a)A licensed financial institution;(b)a person with whom a licensed financial institution has entered into an outsourcing arrangement; and(c)a representative of a financial institution;"supervisory on-site inspection" means an inspection as contemplated in Part 3 of Chapter 9;"systemic event" means an event or circumstance, including one that occurs or arises outside the Republic, that may reasonably be expected to have a substantial adverse effect on the financial system or on economic activity in the Republic, including an event or circumstance that leads to a loss of confidence that operators of, or participants in, payment systems, settlement systems or financial markets, or financial institutions, are able to continue to provide financial products or financial services, or services provided by a market infrastructure;"systemically important financial institution" means a financial institution designated in terms of section 29;"taxable income" has the same meaning ascribed to it in terms of section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);"this Act" includes the Regulations and regulatory instruments made in terms of this Act;"transformation of the financial sector" means transformation as envisaged by the Financial Sector Code for Broad-Based Black Economic Empowerment issued in terms of section 9(1) of the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003);"Tribunal" means the Financial Services Tribunal established in terms of section 219 (1);"Tribunal member" means a member of the Tribunal referred to in section 220;"Tribunal rules" means rules made in terms of section 227;"trust" has the same meaning ascribed to it in terms of section 1 of the Trust Property Control Act, 1988 (Act No. 57 of 1988);"trustee" has the same meaning ascribed to it in terms of section 1 of the Trust Property Control Act, 1988 (Act No. 57 of 1988);"website" means a website as defined in section 1 of the Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002); and"winding-up" means the process of dissolving a financial institution that includes the selling of all assets, the paying off of creditors and the distribution of any remaining assets.
(2)In this Act, unless the context indicates otherwise, a word or expression derived from, or that is another grammatical form of, a word or expression defined in this Act has a corresponding meaning.
(3)A reference in a financial sector law, or in an instrument made or issued in terms of a financial sector law, to compliance with financial sector laws or to compliance with a particular financial sector law includes a reference to compliance with requirements in instruments made or issued in terms of the relevant financial sector laws.

2. Financial products

(1)In this Act "financial product" means—
(a)a participatory interest in a collective investment scheme;
(b)a long-term policy as defined in section 1(1) of the Long-term Insurance Act or a life insurance policy as defined in section 1 of the Insurance Act;[paragraph (b) substituted by section 72(1) of Act 18 of 2017]
(c)a short-term policy as defined in section 1(1) of the Short-term Insurance Act or a non-life insurance policy as defined in section 1 of the Insurance Act;[paragraph (c) substituted by section 72(1) of Act 18 of 2017]
(d)a benefit provided by—
(i)a pension fund organisation, as defined in section 1(1) of the Pension Funds Act, to a member of the organisation by virtue of membership; or
(ii)a friendly society, as defined in section 1(1) of the Friendly Societies Act, to a member of the society by virtue of membership;
(e)a deposit as defined in section 1(1) of the Banks Act;
(f)a health service benefit provided by a medical scheme as defined in section 1(1) of the Medical Schemes Act;
(g)except for the purposes of Chapter 4 and section 106, the provision of credit provided in terms of a credit agreement regulated in terms of the National Credit Act;
(h)a warranty, guarantee or other credit support arrangement as provided for in a financial sector law;
(i)a facility or arrangement designated by Regulations for this section as a financial product; and
(j)a facility or arrangement that includes one or more of the financial products referred to in paragraphs (a) to (i).
(2)The Regulations may designate as a financial product any facility or arrangement that is not regulated in terms of a specific financial sector law if—
(a)doing so will further the object of this Act set out in section 7; and
(b)the facility or arrangement is one through which, or through the acquisition of which, a person conducts one or more of the following activities:
(i)Lending;
(ii)making a financial investment; and
(iii)managing financial risk.
(3)For the purposes of subsection (2)(b)(ii), a person makes a financial investment when the person (the "investor") —
(a)gives a contribution, in money or money’s worth, to another person and any of the following apply:
(i)The other person uses the contribution to generate a financial return for the investor;
(ii)the investor intends that the other person will use the contribution to generate a financial return for the investor, even if no return, or a loss, is in fact generated;
(iii)the other person intends that the contribution be used to generate a financial return for the investor, even if no return, or a loss, is in fact generated; and
(b)has no day-to-day control over the use of the contribution.
(4)For the purposes of subsection (2)(b)(iii), a person manages financial risk when the person—
(a)manages the financial consequences to the person of particular events or circumstances occurring or not occurring; or
(b)avoids or limits the financial consequences of fluctuations in, or in the value of, receipts or costs, including prices and interest rates.
(5)Regulations designating a financial product in terms of subsection (2) may specify the financial sector regulator that is the responsible authority for the designated product.

3. Financial services

(1)In this Act "financial service" means —
(a)any of the following activities conducted in the Republic in relation to a financial product, a foreign financial product, a financial instrument, or a foreign financial instrument:
(i)Offering, promoting, marketing or distributing;
(ii)providing advice, recommendations or guidance;
(iii)operating or managing;
(iv)providing administration services;
(b)dealing or making a market in the Republic in a financial product, a foreign financial product, a financial instrument or a foreign financial instrument;
(c)a payment service;
(d)securities services;
(e)an intermediary service as defined in section 1(1) of the Financial Advisory and Intermediary Services Act;
(f)a service related to the buying and selling of foreign exchange;
(g)a service related to the provision of credit, including a debt collection service, but excluding the services of—
(i)a debt counsellor registered in terms of section 44 of the National Credit Act who provides the services of a debt counsellor as contemplated in that Act;
(ii)a payment distribution agent as defined in section 1 of the National Credit Act; or
(iii)an alternative dispute resolution agent, as defined in section 1 of the National Credit Act;
(h)a service provided to a financial institution through an outsourcing arrange­ment;
(i)any other service provided by a financial institution, being a service regulated by a specific financial sector law; and
(j)a service designated by the Regulations for this section as a financial service.
(2)A service provided by a market infrastructure is not a financial service unless designated by Regulations in terms of subsection (3).
(3)If doing so will further the object of this Act set out in section 7, the Regulations may designate as a financial service—
(a)any service that is not regulated in terms of a specific financial sector law if the service, that is provided in the Republic, relates to—
(i)a financial product, a foreign financial product, a financial instrument or a foreign financial instrument;
(ii)an arrangement that is in substance an arrangement for lending, making a financial investment or managing financial risk, all as contemplated in section 2(2) to (4); or
(iii)the provision of a benchmark or index; or
(b)a service provided by a market infrastructure.
(4)For the purposes of subsection (1)(b) of the definition of "financial service" in subsection (1) —"dealing" means any of the following, whether done as a principal or as an agent:
(a)In relation to securities or participatory interests in a collective investment scheme, underwriting the securities or interests; and
(b)the buying or selling of the securities or interests for own account or on behalf of another person as a business, a part of a business or incidental to conducting a business;
"making a market" in a financial instrument takes place when—
(a)a person, through a facility, at a place or otherwise, states the prices at which the person offers to acquire or dispose of financial instruments, whether or not on the person’s own account; and
(b)other persons reasonably expect that they can enter into transactions for those instruments at those prices.
(5)Regulations designating a financial service in terms of subsection (3) may specify the financial sector regulator that is the responsible authority for the designated financial service.

4. Financial stability

(1)For the purposes of this Act, "financial stability" means that—
(a)financial institutions generally provide financial products and financial services, and market infrastructures generally perform their functions and duties in terms of financial sector laws, without interruption;
(b)financial institutions are capable of continuing to provide financial products and financial services, and market infrastructures are capable of continuing to perform their functions and duties in terms of financial sector laws, without interruption despite changes in economic circumstances; and
(c)there is general confidence in the ability of financial institutions to continue to provide financial products and financial services, and the ability of market infrastructures to continue to perform their functions and duties in terms of financial sector laws, without interruption despite changes in economic circumstances.
(2)A reference in this Act to maintaining financial stability includes, where financial stability has been adversely affected, a reference to restoring financial stability.

5. Responsible authorities

(1)Subject to subsection (2), the responsible authority for a financial sector law is the financial sector regulator identified in Schedule 2 as the responsible authority for that financial sector law.
(2)Despite subsection (1) and sections 2(5) and 3(5), if a section 77 memorandum of understanding provides for one of the financial sector regulators to delegate its functions and powers in relation to a provision of a financial sector law for which it is the responsible authority to another financial sector regulator, the other financial sector regulator is, to the extent of the delegation, the responsible authority for the provision.

6. Financial institutions that are juristic persons

Where a financial sector law imposes an obligation to be complied with by an entity that is a juristic person, the members of the governing body of that juristic person must ensure that the obligation is complied with.

Part 2 – Object and administration of Act

7. Object of Act

(1)The object of this Act is to achieve a stable financial system that works in the interests of financial customers and that supports balanced and sustainable economic growth in the Republic, by establishing, in conjunction with the specific financial sector laws, a regulatory and supervisory framework that promotes —
(a)financial stability;
(b)the safety and soundness of financial institutions;
(c)the fair treatment and protection of financial customers;
(d)the efficiency and integrity of the financial system;
(e)the prevention of financial crime;
(f)financial inclusion;
(g)transformation of the financial sector; and
(h)confidence in the financial system.
(2)When seeking to achieve the object of this Act, the Reserve Bank and the financial sector regulators must not be constrained from achieving their objectives and responsibilities as set out in sections 11, 33 and 57.

8. Administration of Act

The Minister is responsible for the administration of this Act.

Part 3 – Application of other legislation

9. Inconsistencies between Act and other financial sector laws

(1)In the event of any inconsistency between a provision of this Act, other than a Regulation or a regulatory instrument made under this Act, and a provision of another Act that is a financial sector law, the provision of this Act prevails.
(2)In the event of any inconsistency between a provision of a Regulation or a regulatory instrument made in terms of this Act and a provision of a Regulation or a regulatory instrument made in terms of a specific financial sector law, the provision of the Regulation or regulatory instrument made in terms of this Act prevails.

10. Application of other legislation

(1)The Consumer Protection Act does not apply to, or in relation to—
(a)a function, act, transaction, financial product or financial service that is subject to the National Payment System Act or a financial sector law, and which is regulated by the Financial Sector Conduct Authority in terms of a financial sector law; or
(b)the Reserve Bank, the Prudential Authority, the Financial Sector Conduct Authority, the Prudential Committee, the Executive Committee, the Chief Executive Officer, the Commissioner or a Deputy Commissioner.
(2)
(a)Section 18(2) and (3) of the Competition Act, 1998 (Act No. 89 of 1998) applies, with the necessary changes required by the context, to a merger which requires the approval of the Minister, the Prudential Authority or the Financial Sector Conduct Authority in terms of a financial sector law.
(b)For the purposes of paragraph (a), "merger" means a merger as defined in section 12 of the Competition Act.
(c)Section 116(4) and (9) of the Companies Act applies, with the necessary changes required by the context, to an amalgamation or a merger which requires the approval of the Minister, the Prudential Authority or the Financial Sector Conduct Authority in terms of a financial sector law.
(d)For the purposes of paragraph (c), "amalgamation or merger" means an "amalgamation or merger" as defined in section 1 of the Companies Act.

Chapter 2
Financial stability

Part 1 – Powers and functions of Reserve Bank

11. Responsibility for financial stability

(1)The Reserve Bank is responsible —
(a)for protecting and enhancing financial stability; and
(b)if a systemic event has occurred or is imminent, for restoring or maintaining financial stability.
(2)When fulfilling its responsibility in terms of subsection (1), the Reserve Bank—
(a)must act within a policy framework agreed between the Minister and the Governor;
(b)may utilise any power vested in it as the Republic’s central bank or conferred on it in terms of this Act or any other legislation; and
(c)must have regard to, amongst other matters, the roles and functions of other organs of state exercising powers that affect aspects of the economy.

12. Monitoring of risks by Reserve Bank

The Reserve Bank must—
(a)monitor and keep under review—
(i)the strengths and weaknesses of the financial system; and
(ii)any risks to financial stability, and the nature and extent of those risks, including risks that systemic events will occur and any other risks contemplated in matters raised by members of the Financial Stability Oversight Committee or reported to the Reserve Bank by a financial sector regulator;
(b)take steps to mitigate risks to financial stability, including advising the financial sector regulators, and any other organ of state, of the steps to take to mitigate those risks; and
(c)regularly assess the observance of principles in the Republic developed by international standard setting bodies for market infrastructures, and report its findings to the financial sector regulators and the Minister, having regard to the circumstances and the context within the Republic.

13. Financial stability review

(1)The Reserve Bank must, at least every six months, make an assessment of the stability of the financial system, herein referred to as the "financial stability review".
(2)A financial stability review must set out—
(a)the Reserve Bank’s assessment of financial stability in the period under review;
(b)its identification and assessment of the risks to financial stability in at least the next 12 months;
(c)an overview of steps taken by it and the financial sector regulators to identify and manage risks, weaknesses or disruptions in the financial system during the period under review and that are envisaged to be taken during at least the next 12 months; and
(d)an overview of recommendations made by it and the Financial Stability Oversight Committee during the period under review and progress made in implementing those recommendations.
(3)Information which, if published may materially increase the possibility of a systemic event, only needs to be published in a financial stability review after the risk of a systemic event subsides, or has been addressed.
(4)The Reserve Bank must—
(a)submit a copy of each review to the Minister and the Financial Stability Oversight Committee for information and comment, and allow the Minister or the Financial Stability Oversight Committee at least two weeks to make comments, should they wish to do so;
(b)publish the review, after having taken into account any comments that may have been received in terms of paragraph (a); and
(c)table a copy of the review in Parliament.

Part 2 – Managing systemic events and risks in relation to systemic events

14. Determination of systemic events

(1)The Governor may, after having consulted the Minister, determine that a specified event or circumstance, or a specified combination of events or circumstances, is a systemic event.
(2)The Governor may, before making a determination in terms of subsection (1), consult the Financial Stability Oversight Committee.
(3)A determination in terms of subsection (1) may be made whether or not the event or circumstance, or combination of events or circumstances, has already occurred or arisen.
(4)The Governor may, after having consulted the Minister, determine that a specified systemic event has occurred or is imminent.
(5)The Governor—
(a)must notify the Minister of a determination made in terms of subsection (1) or (4);
(b)must keep the determination under review;
(c)may, at any time, after having consulted the Minister, amend or revoke a determination in writing; and
(d)must notify the Minister of any amendment or revocation of a determination made in terms of subsection (1) or (4).
(6)The Reserve Bank must notify the financial sector regulators of a determination in terms of this section, and of an amendment or revocation of such a determination.
(7)The Reserve Bank must, in respect of a determination made in terms of subsection (1) or (4), and any amendment or revocation of such a determination—
(a)table the determination, or the amendment or revocation of the determination, in Parliament; and
(b)publish the determination, or the amendment or revocation of the determina­tion, on the Reserve Bank’s website.

15. Functions of Reserve Bank in relation to systemic events

(1)The Reserve Bank must take all reasonable steps—
(a)to prevent systemic events from occurring; and
(b)if a systemic event has occurred or is imminent, to—
(i)mitigate without delay the adverse effects of the event on financial stability; and
(ii)manage the systemic event and its effects.
(2)When acting in terms of subsection (1), the Reserve Bank must have regard to the need to—
(a)minimise adverse effects on financial stability and economic activity;
(b)protect, as appropriate, financial customers; and
(c)contain the cost to the Republic of the systemic event and the steps taken.

16. Information to Minister

(1)If the Governor has in terms of section 14(4) determined that a systemic event has occurred or is imminent, the Governor must ensure that the Minister is kept informed of the event and of any steps being taken or proposed to manage the event and the effects of the event.
(2)The Reserve Bank may not, except with the Minister’s approval, take a step in terms of section 15 that will or is likely to—
(a)bind the National Revenue Fund to any expenditure;
(b)have a material impact on the cost of borrowing for the National Revenue Fund; or
(c)create a future financial commitment or a contingent liability for the National Revenue Fund.

17. Responsibilities of financial sector regulators

If the Governor has in terms of section 14(4) determined that a systemic event has occurred or is imminent, each financial sector regulator must—
(a)provide the Reserve Bank with any information in the possession of the financial sector regulator, which may be relevant for the Bank to manage the systemic event or the effects of the systemic event; and
(b)consult the Reserve Bank before exercising any of their powers in a way that may compromise steps taken or proposed in terms of section 15 to manage the systemic event or the effects of the systemic event.

18. Directives to financial sector regulators

(1)The Governor may direct a financial sector regulator, in writing, to provide the Reserve Bank with information specified in the directive that the Reserve Bank or the Governor needs for exercising their powers in terms of section 14 or 15, that is in the possession of the financial sector regulator or obtainable by it.
(2)
(a)If the Governor has in terms of section 14(4) determined that a systemic event has occurred or is imminent, the Governor may, in writing, direct a financial sector regulator to assist the Reserve Bank in complying with section 15 by acting in accordance with the directive when exercising its powers.
(b)A directive in terms of paragraph (a) may include directions aimed at—
(i)supporting the restructuring, resolution or winding-up of any financial institu­tion;
(ii)preventing or reducing the spread of risk, weakness or disruption through the financial system; or
(iii)increasing the resilience of financial institutions to risk, weakness or disruption.
(3)The Prudential Authority, Financial Sector Conduct Authority and the Financial Intelligence Centre must comply with a directive issued to it in terms of subsection (1) or (2).
(4)The National Credit Regulator must comply with a directive issued to it in terms of subsection (1) or (2), provided that the Minister has consulted the Minister responsible for consumer credit matters on the directive.

19. Exercise of powers by other organs of state

(1)If the Governor has in terms of section 14(4) determined that a systemic event has occurred or is imminent, an organ of state exercising powers in respect of a part of the financial system may not, without the approval of the Minister, acting in consultation with the Cabinet member responsible for that organ of state, exercise its powers in a way that is inconsistent with a decision or steps taken by the Governor or the Reserve Bank in terms of this Part, in order to manage that systemic event or the effects of that systemic event.
(2)Any unresolved issues between the Minister and that Cabinet member must be referred to Cabinet.
(3)Subsection (1) does not apply to the financial sector regulators.

Part 3 – Financial Stability Oversight Committee

20. Establishment of Financial Stability Oversight Committee

(1)A committee called the Financial Stability Oversight Committee is hereby established.
(2)The primary objectives of the Financial Stability Oversight Committee are to—
(a)support the Reserve Bank when the Reserve Bank performs its functions in relation to financial stability; and
(b)facilitate co-operation and collaboration between, and co-ordination of action among, the financial sector regulators and the Reserve Bank in respect of matters relating to financial stability.

21. Functions of Financial Stability Oversight Committee

The Financial Stability Oversight Committee has the following functions:
(a)To serve as a forum for representatives of the Reserve Bank and of each of the financial sector regulators to be informed, and to exchange views, about the activities of the Reserve Bank and the financial sector regulators regarding financial stability;
(b)to make recommendations to the Governor on the designation of systemically important financial institutions;
(c)to advise the Minister and the Reserve Bank on—
(i)steps to be taken to promote, protect or maintain, or to manage or prevent risks to, financial stability; and
(ii)matters relating to crisis management and prevention;
(d)to make recommendations to other organs of state regarding steps that are appropriate for them to take to assist in promoting, protecting or maintaining, or managing or preventing risks to financial stability; and
(e)any other function conferred on it in terms of applicable legislation.

22. Membership

(1)The Financial Stability Oversight Committee consists of the following members:
(a)The Governor;
(b)the Deputy Governor responsible for financial stability matters;
(c)the Chief Executive Officer;
(d)the Commissioner;
(e)the Chief Executive Officer of the National Credit Regulator;
(f)the Director-General;
(g)the Director of the Financial Intelligence Centre; and
(h)a maximum of three additional persons appointed by the Governor.
(2)A member of the Financial Stability Oversight Committee referred to in terms of subsection (1)(h) holds office for the period, and on the terms, determined by the Governor.

23. Administrative support by Reserve Bank

(1)The Reserve Bank must provide administrative support, and other resources, including financial resources, for the effective functioning of the Financial Stability Oversight Committee.
(2)The Reserve Bank must ensure that minutes of each meeting of the Financial Stability Oversight Committee are kept in a manner determined by the Governor.

24. Meetings and procedure

(1)The Financial Stability Oversight Committee must meet at least every six months.
(2)The Governor—
(a)may convene a meeting of the Financial Stability Oversight Committee at any time; and
(b)must convene a meeting if requested to do so by the Chief Executive Officer, the Commissioner or the Chief Executive Officer of the National Credit Regulator.
(3)
(a)The Governor chairs a meeting of the Financial Stability Oversight Committee at which the Governor is present.
(b)If the Governor is not present at a meeting, the Deputy Governor responsible for financial stability matters chairs the meeting.
(4)
(a)A member of the Financial Stability Oversight Committee who is unable to attend a meeting may, after notice to the other members and with the concurrence of the person who will chair the meeting, nominate an alternate to attend that meeting in the member’s absence.
(b)An alternate referred to in paragraph (a) has, for that meeting, the same rights as the member of the Financial Stability Oversight Committee.
(5)The Financial Stability Oversight Committee may determine its procedures, including quorum requirements.
(6)The person chairing a meeting may invite any person, including a representative of an organ of state or a financial institution, to attend the meeting.
(7)The Financial Stability Oversight Committee may establish separate working groups or subcommittees.
(8)In the event of an equality of votes on a matter that may be voted upon by the Financial Stability Oversight Committee, the person chairing a meeting has a casting vote in addition to a deliberative vote.

Part 4 – Financial Sector Contingency Forum

25. Financial Sector Contingency Forum

(1)The Governor must establish a forum called the Financial Sector Contingency Forum.
(2)The primary objective of the Financial Sector Contingency Forum is to assist the Financial Stability Oversight Committee with—
(a)the identification of potential risks that systemic events will occur; and
(b)the co-ordination of appropriate plans, mechanisms and structures to mitigate those risks.
(3)The Financial Sector Contingency Forum is composed of at least eight members, including—
(a)a Deputy Governor designated by the Governor, which Deputy Governor is the Chairperson;
(b)representatives of each of the financial sector regulators;
(c)representatives of other organs of state, as the Chairperson may determine; and
(d)representatives of financial sector industry bodies and any other relevant person, as the Chairperson may determine.
(4)The Financial Sector Contingency Forum must meet at least every six months.
(5)The Financial Sector Contingency Forum must be convened and must function in accordance with procedures determined by the Governor.
(6)The Reserve Bank must provide administrative support, and other resources, including financial resources, for the effective functioning of the Financial Sector Contingency Forum.

Part 5 – Roles of financial sector regulators and other organs of state in maintaining financial stability

26. Co-operation among Reserve Bank and financial sector regulators in relation to financial stability

(1)The financial sector regulators must—
(a)co-operate and collaborate with the Reserve Bank, and with each other, to maintain, protect and enhance financial stability;
(b)provide such assistance and information to the Reserve Bank and the Financial Stability Oversight Committee to maintain or restore financial stability as the Reserve Bank or the Financial Stability Oversight Committee may reasonably request;
(c)promptly report to the Reserve Bank any matter of which the financial sector regulator becomes aware that poses or may pose a risk to financial stability; and
(d)gather information from, or about, financial institutions that concerns financial stability.
(2)The Reserve Bank must, when exercising its powers in terms of this Chapter, take into account—
(a)any views expressed and any information reported by the financial sector regulators; and
(b)any recommendations of the Financial Stability Oversight Committee.

27. Memoranda of understanding relating to financial stability

(1)The financial sector regulators and the Reserve Bank must, not later than six months after this Chapter takes effect, enter into one or more memoranda of understanding with respect to how they will co-operate and collaborate with, and provide assistance to, each other and otherwise perform their roles and comply with their duties relating to financial stability.
(2)The financial sector regulators and the Reserve Bank must review and update the memoranda of understanding as appropriate, but at least once every three years.
(3)A copy of a memorandum of understanding must, without delay after being entered into or updated, be provided to the Minister and the Cabinet member responsible for consumer credit matters.
(4)The validity of any action taken by a financial sector regulator in terms of a financial sector law, the National Credit Act or the Financial Intelligence Centre Act is not affected by a failure to comply with this section or a memorandum of understanding contemplated in this section.

28. Roles of other organs of state in relation to financial stability

An organ of state, other than a financial sector regulator, must—
(a)in performing its functions, have regard to the implications of its activities on financial stability; and
(b)provide such assistance and information to the Reserve Bank and the Financial Stability Oversight Committee so as to maintain and restore financial stability as the Bank or the Committee may reasonably request.

Part 6 – Systemically important financial institutions

29. Designation of systemically important financial institutions

(1)
(a)The Governor may, by written notice to a financial institution, designate the institution as a systemically important financial institution.
(b)The power of the Governor in terms of paragraph (a) may not be delegated.
(2)Before designating a financial institution in terms of subsection (1) as a systemically important financial institution, the Governor must—
(a)give the Financial Stability Oversight Committee notice of the proposed designation and a statement of the reasons why the designation is proposed, and invite the Committee to provide advice on the proposal within a specified reasonable period; and
(b)if, after considering the Committee’s advice, the Governor proposes to designate the financial institution in terms of subsection (1), invite the financial institution to make submissions on the matter, and give it a reasonable period to do so.
(3)In deciding whether to designate a financial institution in terms of subsection (1), the Governor must take into account at least the following:
(a)The size of the financial institution;
(b)the complexity of the financial institution and its business affairs;
(c)the interconnectedness of the institution with other financial institutions within or outside the Republic;
(d)whether there are readily available substitutes for the financial products and financial services that the financial institution provides or, in the case of a market infrastructure, the market infrastructure;
(e)recommendations of the Financial Stability Oversight Committee;
(f)submissions made by or for the institution; and
(g)any other matters that may be prescribed by Regulation.
(4)
(a)If the Governor has determined in terms of section 14(4) that a systemic event has occurred or is imminent, the Governor may designate a financial institution as a systemically important financial institution without complying, or complying fully, with subsection (2) or (3).
(b)If the Governor acts in terms of paragraph (a) and designates a financial institution without complying, or complying fully, with subsection (2) or (3), the financial institution may make submissions on the designation to the Governor within 30 days after being notified of the designation.
(c)The Governor must consider any submissions in terms of paragraph (b) and, by notice to the financial institution, either confirm or revoke the designation.
(5)The designation of a financial institution as a systemically important financial institution does not imply, or entitle the financial institution to, a guarantee or any form of credit or other support from any organ of state.
(6)The Governor may, in writing, revoke a designation made in terms of this section.
(7)A designation, and the revocation of a designation, in terms of this section must be published.

30. Prudential standards and regulator’s directives in respect of systemically impor­tant financial institutions

(1)To mitigate the risks that systemic events may occur, the Reserve Bank may, after consulting the Prudential Authority, direct the Prudential Authority to impose, either through prudential standards or regulator’s directives, requirements applicable to one or more specific systemically important financial institutions or to such institutions generally in relation to any of the following matters:
(a)Solvency measures and capital requirements, which may include require­ments in relation to counter-cyclical capital buffers;
(b)leverage ratios;
(c)liquidity;
(d)organisational structures;
(e)risk management arrangements, including guarantee arrangements;
(f)sectoral and geographical exposures;
(g)required statistical returns;
(h)recovery and resolution planning; and
(i)any other matter in respect of which a prudential standard or regulator’s directive may be made that is prescribed by Regulations made for this section on the recommendation of the Governor.
(2)The Prudential Authority may make prudential standards or issue regulator’s directives as contemplated in subsection (1).
(3)The Prudential Authority must notify the Reserve Bank and the Financial Stability Oversight Committee of any steps taken to enforce a prudential standard made or a regulator’s directive issued in terms of subsection (2), and the effect of those steps.

31. Winding-up and similar steps in respect of systemically important financial institutions

(1)None of the following steps may be taken in relation to a systemically important financial institution or a systemically important financial institution within a financial conglomerate without the concurrence of the Reserve Bank:
(a)Suspending, varying, amending or cancelling a licence issued to that financial institution;
(b)adopting a special resolution to wind up the financial institution voluntarily;
(c)applying to a court for an order that the financial institution be wound up;
(d)appointing an administrator, trustee or curator for the financial institution;
(e)placing the financial institution under business rescue or adopting a business rescue plan for the financial institution;
(f)entering into an agreement for amalgamation or merger of the financial institution with a company; and
(g)entering into a compromise arrangement with creditors of the financial institution.
(2)A step referred to in subsection (1) that is taken without the Reserve Bank’s concurrence is void.

Chapter 3
Prudential Authority

Part 1 – Establishment, objective and functions

32. Establishment

(1)An authority called the Prudential Authority is hereby established.
(2)The Prudential Authority is a juristic person operating within the administration of the Reserve Bank.
(3)The Prudential Authority is not a public entity in terms of the Public Finance Management Act.

33. Objective

The objective of the Prudential Authority is to—
(a)promote and enhance the safety and soundness of financial institutions that provide financial products and securities services;
(b)promote and enhance the safety and soundness of market infrastructures;
(c)protect financial customers against the risk that those financial institutions may fail to meet their obligations; and
(d)assist in maintaining financial stability.

34. Functions

(1)In order to achieve its objective, the Prudential Authority must—
(a)regulate and supervise, in accordance with the financial sector laws —
(i)financial institutions that provide financial products or securities services; and
(ii)market infrastructures;
(b)co-operate with and assist the Reserve Bank, the Financial Stability Oversight Committee, the Financial Sector Conduct Authority, the National Credit Regulator and the Financial Intelligence Centre, as required in terms of this Act;
(c)co-operate with the Council for Medical Schemes in the handling of matters of mutual interest;
(d)support sustainable competition in the provision of financial products and financial services, including through co-operating and collaborating with the Competition Commission;
(e)support financial inclusion;
(f)regularly review the perimeter and scope of financial sector regulation, and take steps to mitigate risks identified to the achievement of its objective or the effective performance of its functions; and
(g)conduct and publish research relevant to its objective.
(2)The Prudential Authority must also perform any other function conferred on it in terms of any other provision of this Act or other legislation.
(3)The Prudential Authority may do anything else reasonably necessary to achieve its objective, including—
(a)co-operating with its counterparts in other jurisdictions; and
(b)participating in relevant international regulatory, supervisory, financial stability and standard setting bodies.
(4)When performing its functions, the Prudential Authority must—
(a)take into account the need for a primarily pre-emptive, outcomes focused and risk-based approach, and prioritise the use of its resources in accordance with the significance of risks to the achievement of its objective; and
(b)to the extent practicable, have regard to international regulatory and supervisory standards set by bodies referred to in subsection (3)(b), and circumstances in the Republic.
(5)The Prudential Authority must perform its functions without fear, favour or prejudice.

Part 2 – Governance

35. Overall governance objective

The Prudential Authority must manage its affairs in an efficient and effective way, and establish and implement appropriate and effective governance systems and processes, having regard to, among other things, internationally accepted standards and practices in these matters.

36. Appointment of Chief Executive Officer

(1)The Governor must, with the concurrence of the Minister, appoint a Deputy Governor who has appropriate expertise in the financial sector, other than the Deputy Governor responsible for financial stability, as the Chief Executive Officer of the Prudential Authority.
(2)When appointing a Deputy Governor as the Chief Executive Officer, that Deputy Governor and the Governor must agree, in writing, on—
(a)the performance measures that will be used to assess the Deputy Governor’s performance as the Chief Executive Officer; and
(b)the level of performance to be achieved against those performance measures.
(3)A person may not be appointed or hold office as the Chief Executive Officer if the person—
(a)is a disqualified person; or
(b)is not ordinarily resident in the Republic.

37. Role of Chief Executive Officer

(1)The Chief Executive Officer—
(a)is responsible for the day-to-day management and administration of the Prudential Authority; and
(b)subject to section 42(b), must perform the functions of the Prudential Authority, including exercising the powers and carrying out the duties associated with those functions.
(2)When acting in terms of subsection (1), the Chief Executive Officer must implement the policies and strategies adopted by the Prudential Committee.

38. Term of office of Chief Executive Officer

(1)A person appointed as the Chief Executive Officer—
(a)holds office for a term no longer than five years, as the Governor may determine;
(b)is, at the expiry of that term, eligible for re-appointment for one further term; and
(c)must vacate office before the expiry of a term of office if that person—
(i)resigns as Chief Executive Officer, by giving at least three months written notice to the Governor, or a shorter period that the Governor may accept;
(ii)ceases to hold office as Deputy Governor; or
(iii)is removed from office as Chief Executive Officer.
(2)The Governor must, at least three months before the end of the Chief Executive Officer’s first term of office, inform the Chief Executive Officer whether the Governor proposes to re-appoint the person as Chief Executive Officer.

39. Removal of Chief Executive Officer

(1)The Governor must, subject to due process, remove the Chief Executive Officer from office if the Chief Executive Officer becomes a disqualified person.
(2)The Governor may, with the concurrence of the Minister, remove the Chief Executive Officer from office if an independent inquiry, established by the Governor with the concurrence of the Minister, has found that the Chief Executive Officer—
(a)is unable to perform the duties of office for health or other reasons;
(b)has failed in a material way to achieve the level of performance against the performance measures agreed to in terms of section 36(2);
(c)has failed in a material way to discharge any of the responsibilities of office, including any responsibilities entrusted in terms of legislation; or
(d)has acted in a way that is inconsistent with continuing to hold the office.
(3)If an independent inquiry has been established in terms of subsection (2), the Governor may suspend the Chief Executive Officer from office pending a decision on the removal of the Chief Executive Officer.
(4)Without limiting subsection (2)(c), the Chief Executive Officer must be taken to have failed in a material way to discharge the responsibilities of office if he or she is absent from two consecutive meetings of the Prudential Committee without the leave of the Prudential Committee.
(5)If the Chief Executive Officer is removed from office in terms of subsection (2), the Minister must, within 30 days, submit the report and findings of the independent inquiry to the National Assembly.

40. Acting Chief Executive Officer

The Governor may appoint a senior staff member of the Prudential Authority or a Deputy Governor to act as Chief Executive Officer when the Chief Executive Officer is absent from office, suspended or is otherwise unable to perform the functions of office.

41. Establishment of Prudential Committee

(1)A committee called the Prudential Committee is hereby established for the Prudential Authority.
(2)The Prudential Committee consists of the Governor, the Chief Executive Officer and the other Deputy Governors.

42. Role of Prudential Committee

The Prudential Committee must—
(a)generally oversee the management and administration of the Prudential Authority to ensure that it is efficient and effective; and
(b)act for the Prudential Authority in the following matters:
(i)Authorising the Chief Executive Officer to sign, on behalf of the Prudential Authority, a section 27 or section 77 memorandum of understanding and any amendment to such a memorandum;
(ii)delegating powers of the Prudential Authority to the Financial Sector Conduct Authority in terms of a section 77 memorandum of understand­ing;
(iii)adopting the regulatory strategy of the Prudential Authority, and any amendment to the strategy;
(iv)adopting the administrative action procedures of the Prudential Authority, and any amendment to those procedures;
(v)appointing members of subcommittees of the Prudential Authority required or permitted by a law, and giving directions regarding the conduct of the work of any subcommittee;
(vi)making prudential standards, joint standards and other regulatory instruments in terms of financial sector laws;
(vii)making determinations of fees in terms of financial sector laws; and
(viii)any other matter assigned in terms of a financial sector law to the Prudential Committee.

43. Meetings of Prudential Committee

(1)
(a)The Prudential Committee must meet as often as necessary for the performance of its functions.
(b)An audio or audio-visual conference among a majority of the members of the Prudential Committee, which enables each participating member to hear and be heard by each of the other participating members, must be regarded as a meeting of the Prudential Committee, and each participating member must be regarded as being present at such a meeting.
(2)Meetings of the Prudential Committee are held at times and, except where subsection (1)(b) applies, at places determined by the Governor.
(3)A quorum for a meeting of the Prudential Committee is a majority of its members.
(4)
(a)The Governor chairs meetings of the Prudential Committee at which the Governor is present.
(b)If the Governor is not present at a meeting, a Deputy Governor other than the Chief Executive Officer, who is nominated by the Governor, or selected in accordance with a procedure determined by the Governor, chairs the meeting.
(5)The Governor or the Deputy Governor chairing a meeting of the Prudential Committee may invite or allow any other person, including a representative of the Financial Sector Conduct Authority or the National Credit Regulator, to attend a meeting of the Prudential Committee, but a person who is invited has no right to vote at the meeting.
(6)The members may regulate proceedings at Prudential Committee meetings as they consider appropriate.
(7)The Chief Executive Officer must ensure that minutes of each meeting of the Prudential Committee are kept in a manner determined by the Chief Executive Officer.

44. Decisions of Prudential Committee

(1)
(a)A proposal before a meeting of the Prudential Committee becomes a decision of the committee if a majority of the members present, or regarded as being present, and voting on the proposal, vote for the proposal.
(b)In the event of an equality of votes on a proposal, the person chairing the meeting has a casting vote in addition to a deliberative vote.
(2)The Prudential Committee may, in accordance with procedures determined by it, make a decision on a proposal outside a meeting of the Prudential Committee.
(3)A decision of the Prudential Committee is not invalid merely because—
(a)there was a vacancy in the office of a member when the decision was taken; or
(b)a person who was not a member participated in the decision, as long as such person did not vote.

45. Governance and other subcommittees

(1)The Prudential Committee must establish—
(a)a subcommittee to review, monitor and advise the Prudential Committee on the risks faced by the Prudential Authority and plans for managing those risks; and
(b)a subcommittee to advise the Prudential Committee on measures that must be taken to ensure that the Prudential Authority complies with its obligations in relation to auditing and financial management.
(2)The Prudential Committee may establish one or more other subcommittees for the Prudential Authority, with functions that the Prudential Committee may determine.
(3)
(a)The Prudential Committee determines the membership of a subcommittee established in terms of this section.
(b)The majority of the members of a subcommittee established in terms of subsection (1) may not be staff members of the Prudential Authority or the Reserve Bank.
(c)A subcommittee established in terms of subsection (2) may include persons who are neither members of the Prudential Committee nor staff members of the Prudential Authority.
(d)A disqualified person may not be a member of a subcommittee established in terms of this section.
(4)The Prudential Committee may, instead of establishing a subcommittee referred to in subsection (1), assign the subcommittee’s function to a committee of the Reserve Bank performing a similar function.
(5)A member of a subcommittee established in terms of this section, including a member who is not in the service of an organ of state, holds office for the period, and on the terms and conditions, and terms regarding remuneration, as determined by the Prudential Committee.
(6)A subcommittee established in terms of subsection (1) must be chaired by a person who is not the Governor, a Deputy Governor, the Chief Executive Officer or a staff member of the Prudential Authority.
(7)A subcommittee established in terms of this section determines its procedures subject to any directions by the Prudential Committee.
(8)The Chief Executive Officer must ensure that minutes of each meeting of each subcommittee established in terms of this section are kept in a manner determined by the Prudential Committee.

46. Duties of members of Prudential Committee and members of subcommittees

(1)A member of the Prudential Committee or of a subcommittee established in terms of section 45(1) must—
(a)act honestly in all matters relating to the Prudential Authority; and
(b)perform the functions of office as a member—
(i)in good faith;
(ii)for a proper purpose; and
(iii)with the degree of care and diligence that a reasonable person in the member’s position would exercise.
(2)A person who is or has been a member of the Prudential Committee or of a subcommittee established in terms of section 45(1) may not use that position or any information obtained as such a member to—
(a)improperly benefit himself or herself or another person;
(b)impede the Prudential Authority’s ability to perform its functions; or
(c)cause improper detriment to another person.
(3)For the purposes of this section, "benefit" and "detriment" are not limited to financial benefit or detriment.

47. Regulatory strategy

(1)The Prudential Committee must, within six months after the date on which this Chapter takes effect, adopt a regulatory strategy for the Prudential Authority to give general guidance to the Prudential Authority in the achievement of its objective and the performance of its regulatory and supervisory functions.
(2)A regulatory strategy must—
(a)state—
(i)the regulatory and supervisory priorities for the Prudential Authority for the next three years; and
(ii)the intended key outcomes of the strategy;
(b)set guiding principles for the Prudential Authority on—
(i)how it should perform its regulatory and supervisory functions;
(ii)the matters to which it should have regard in performing those functions;
(iii)its approach to administrative actions; and
(iv)how it should give effect to the requirements applicable to it with respect to—
(aa)transparency;
(bb)openness to consultation; and
(cc)accountability; and
(c)be aimed at giving effect to section 34(4).
(3)The Prudential Committee must review the regulatory strategy at least annually, and may amend it at any time.
(4)
(a)Before the Prudential Committee adopts a regulatory strategy or an amendment to a regulatory strategy, it must—
(i)provide a copy of the draft of the strategy or amendment to the Minister, the Financial Sector Conduct Authority and the National Credit Regulator; and
(ii)invite comments from the Minister, the Financial Sector Conduct Authority and the National Credit Regulator, on the draft, to be made within a period specified by the Prudential Committee.
(b)The period referred to in paragraph (a)(ii) must be at least one month.
(5)In deciding whether to adopt a regulatory strategy or an amendment of a regulatory strategy, the Prudential Authority must have regard to all comments made on the draft.
(6)The Prudential Committee must seek to minimise, to the extent that is practicable and appropriate, inconsistencies between the Prudential Authority’s regulatory strategy and the Financial Sector Conduct Authority’s regulatory strategy.
(7)The Chief Executive Officer must—
(a)provide a copy of the Prudential Authority’s regulatory strategy, and each amendment, as adopted, to the Minister, the Financial Sector Conduct Authority and the National Credit Regulator; and
(b)publish the regulatory strategy and each amendment.

48. Delegations

(1)The Prudential Committee may, in writing—
(a)delegate any power or duty referred to in section 42(b)(viii) to the Chief Executive Officer or another staff member of the Prudential Authority; and
(b)at any time, amend a delegation made in terms of paragraph (a).
(2)The Chief Executive Officer may, in writing—
(a)delegate to a staff member of the Prudential Authority or an official or staff member of the Reserve Bank any power or duty assigned or delegated to the Chief Executive Officer in terms of a financial sector law, except the power to delegate contained in this subsection;
(b)delegate to an administrative action committee the power to impose administrative penalties that are specified in the delegation, if the Prudential Authority establishes an administrative action committee; and
(c)at any time amend a delegation made in terms of paragraph (a) or (b).
(3)A delegation in terms of subsection (1)(a) or (2)(a) may be to a specific person or to a person holding a specific position.
(4)Any power or duty of the Prudential Authority may be delegated to the Financial Sector Conduct Authority by a section 77 memorandum of understanding in accordance with a framework and system of delegation developed by the financial sector regulators to ensure that any delegation does not constrain the Prudential Authority or the Financial Sector Conduct Authority from achieving their respective objectives as set out in sections 33 and 57.
(5)A delegation in terms of this section—
(a)is subject to the limitations and conditions specified in the delegation;
(b)does not divest the Prudential Authority, the Prudential Committee or the Chief Executive Officer of responsibility in respect of the delegated power or duty; and
(c)may be revoked at any time, but a revocation does not affect any rights or liabilities accrued because of the acts of the delegate.
(6)Anything done by a delegate in accordance with a delegation in terms of this section must be regarded as having been done by the Prudential Authority.
(7)This section does not affect a power under a specific financial sector law to delegate a power of the Prudential Authority.

49. Disclosure of interests

(1)A member of the Prudential Committee or of a subcommittee established in terms of section 45(1) must disclose, at a meeting of the Prudential Committee or subcommittee, as the case may be, or in writing to each of the other members of that committee or subcommittee, any interest in any matter that is being or may be considered by the relevant committee that—
(a)the member has; or
(b)a person who is a related party to the member has.
(2)A disclosure referred to in subsection (1) must be given as soon as practicable after the member becomes aware of the interest.
(3)
(a)A member who has, or who has a related party who has, an interest that is required to be disclosed in terms of subsection (1), may not participate in the consideration of, or decision on, a matter to which the interest relates unless —
(i)the member has disclosed the interest as required by subsection (1); and
(ii)the other members of the Prudential Committee or subcommittee have decided that the interest does not affect the proper execution of that member’s functions in relation to the matter.
(b)Any consideration of, or decision on, a matter which does not comply with paragraph (a) is void and must be reconsidered or decided without the member present.
(4)
(a)Each member of the Prudential Authority’s staff and each person to whom a power or function of the Prudential Authority has been delegated must make timely, proper and adequate disclosure of their interests, including the interests of a related party, that could reasonably be seen as interests that may affect the proper execution of their functions of office or the delegated power.
(b)The Chief Executive Officer must ensure that paragraph (a) is complied with.
(5)For the purposes of this section, it does not matter—
(a)whether an interest is direct, indirect, pecuniary or non-pecuniary; or
(b)when the interest was acquired.
(6)For the purposes of this section, a person does not have to disclose —
(a)the fact that that person, or a person who is a related party to that person, is —
(i)an official or employee of the Reserve Bank; or
(ii)a financial customer of a financial institution; or
(b)an interest that is not material.
(7)A failure by a person to disclose a material interest in accordance with this section and any guidelines that may be prescribed by the Minister in terms of section 288(3) constitutes—
(a)a breach of the duties in section 46 or 52, whichever section is applicable to the person; and
(b)an offence in terms of section 265.
(8)When a person has failed to disclose a material interest in terms of this section, the Prudential Committee must publish a notice on the Prudential Authority’s website that a failure to disclose a material interest occurred, which notice must include the details of the failure.
(9)The Chief Executive Officer must maintain a register of all disclosures made in terms of this section and of all decisions made in terms of this section.

Part 3 – Staff, resources and financial management

50. Staff and resources

(1)The Prudential Authority must determine the personnel, accommodation, facilities, use of assets, resources and other services that it requires to function effectively.
(2)The Prudential Authority may—
(a)enter into secondment arrangements in respect of persons;
(b)engage persons on contract otherwise than as employees;
(c)enter into contracts;
(d)acquire or dispose of property;
(e)insure itself against any loss, damage, risk or liability that it may suffer or incur; and
(f)do anything else necessary for the performance of its functions.
(3)The Prudential Authority may not enter into a secondment arrangement in respect of a person, or engage persons on contract, unless the person and the Prudential Authority have agreed in writing on—
(a)the performance measures that will be used to assess that person’s performance; and
(b)the level of performance that must be achieved against those measures.

51. Resources provided by Reserve Bank

(1)The Reserve Bank must provide the Prudential Authority with the personnel, accommodation, facilities, use of assets, resources and other services determined in accordance with section 50(1) and as agreed to by the Reserve Bank.
(2)The Reserve Bank must second the personnel that it provides in terms of subsection (1) to the Prudential Authority.

52. Duties of staff members

(1)A person who is or has been a staff member of the Prudential Authority may not use that position or any information obtained as a staff member to—
(a)improperly benefit himself or herself or another person;
(b)impede the Prudential Authority’s ability to perform its functions; or
(c)cause improper detriment to another person.
(2)For the purposes of this section, "benefit" and "detriment" are not limited to financial benefit or detriment.

53. Financial management duties of Chief Executive Officer

The Chief Executive Officer must—
(a)recommend to the Prudential Committee fees for prudential supervision by, and other services provided by, the Prudential Authority in terms of this Act and other financial sector laws, and levies in terms of levies legislation;
(b)exercise the utmost care to protect the assets and records of the Prudential Authority;
(c)act with fidelity, honesty, integrity and in the best interests of the Authority in managing the financial affairs of the Prudential Authority;
(d)on request, disclose to the Minister or the Governor all material facts relating to the affairs of the Prudential Authority, including those reasonably discoverable, that in any way may influence decisions or actions of the Minister or the Governor;
(e)seek, within the Chief Executive Officer’s sphere of influence, to prevent any prejudice to the financial interests of the Republic;
(f)ensure that the Prudential Authority has and maintains —
(i)effective, efficient and transparent systems of financial and risk management;
(ii)an effective, efficient and transparent system of internal audit; and
(iii)a procurement and provisioning system that is fair, equitable, transparent, competitive and cost-effective;
(g)take appropriate and cost-effective steps to—
(i)collect revenue due to the Prudential Authority;
(ii)prevent losses resulting from criminal conduct and expenditure that is not in accordance with the Prudential Authority’s operational policies; and
(iii)manage available working capital efficiently and economically;
(h)manage and safeguard the assets of the Authority, and manage the revenue, expenditure and liabilities of the Authority;
(i)establish systems and processes to ensure that effective and appropriate disciplinary steps are taken against any staff member of the Authority who—
(i)contravenes a law relevant to the performance of the Authority’s functions; or
(ii)engages in conduct that undermines the financial management and internal control systems of the Authority; and
(j)generally ensure that the Authority complies with its legal obligations.

54. Information by Chief Executive Officer

(1)The Chief Executive Officer must provide the Prudential Committee and the National Treasury with the information, returns, documents, explanations and motiva­tions that may be prescribed by Regulation for this section or that the Prudential Committee or the National Treasury may request.
(2)Subsection (1) does not require or permit the provision of information about persons identifiable from the information.

55. Annual reports and financial accounts

(1)The Chief Executive Officer must—
(a)ensure that full and proper records of the financial affairs of the Prudential Authority are kept and maintained;
(b)prepare financial accounts for the Prudential Authority for each financial year which will form part of the annual report of the Reserve Bank; and
(c)submit to the Minister, within five months after the end of each financial year, for tabling in the National Assembly an annual report on the activities of the Prudential Authority during that financial year, including particulars of any matters that may be prescribed by Regulation for this section.
(2)The financial accounts of the Prudential Authority referred to in subsection (1)(b)—
(a)must be disclosed in the annual report of the Reserve Bank in a manner that reflects the direct costs that accrue to the Prudential Authority; and
(b)may be disclosed in the form of an annexure to the annual report of the Reserve Bank.

Chapter 4
Financial Sector Conduct Authority

Part 1 – Establishment, objective and functions

56. Establishment

(1)The Financial Sector Conduct Authority is hereby established, as a juristic person.
(2)The Authority is a national public entity for the purposes of the Public Finance Management Act, and despite section 49(2) of the Public Finance Management Act, the Commissioner is the accounting authority of the Financial Sector Conduct Authority for the purposes of that Act.

57. Objective

The objective of the Financial Sector Conduct Authority is to—
(a)enhance and support the efficiency and integrity of financial markets; and
(b)protect financial customers by—
(i)promoting fair treatment of financial customers by financial institutions; and
(ii)providing financial customers and potential financial customers with financial education programs, and otherwise promoting financial literacy and the ability of financial customers and potential financial customers to make sound financial decisions; and
(c)assist in maintaining financial stability.

58. Functions

(1)In order to achieve its objective, the Financial Sector Conduct Authority must—
(a)regulate and supervise, in accordance with the financial sector laws, the conduct of financial institutions;
(b)co-operate with, and assist, the Reserve Bank, the Financial Stability Oversight Committee, the Prudential Authority, the National Credit Regula­tor, and the Financial Intelligence Centre, as required in terms of this Act;
(c)co-operate with the Council for Medical Schemes in the handling of matters of mutual interest;
(d)promote, to the extent consistent with achieving the objective of the Financial Sector Conduct Authority, sustainable competition in the provision of financial products and financial services, including through co-operating and collaborating with the Competition Commission;
(e)promote financial inclusion;
(f)regularly review the perimeter and scope of financial sector regulation, and take steps to mitigate risks identified to the achievement of its objective or the effective performance of its functions;
(g)administer the collection of levies and the distribution of amounts received in respect of levies;
(h)conduct and publish research relevant to its objective;
(i)monitor the extent to which the financial system is delivering fair outcomes for financial customers, with a focus on the fairness and appropriateness of financial products and financial services and the extent to which they meet the needs and reasonable expectations of financial customers; and
(j)formulate and implement strategies and programs for financial education for the general public.
(2)In relation to a financial institution that is a credit provider regulated in terms of the National Credit Act, the Financial Sector Conduct Authority may, in addition to regulating and supervising the financial institution in respect of the financial services that the financial institution provides, and notwithstanding section 2(1)(g), regulate and supervise the financial institution’s conduct in relation to the provision of credit under a credit agreement only in respect of those matters referred to in section 108.
(3)The Financial Sector Conduct Authority must also perform any other function conferred on it in terms of any other provision of this Act or other legislation.
(4)The Financial Sector Conduct Authority may do anything else reasonably necessary to achieve its objective, including—
(a)co-operating with its counterparts in other jurisdictions; and
(b)participating in relevant international regulatory, supervisory, financial stability and standard setting bodies.
(5)When performing its functions, the Financial Sector Conduct Authority must—
(a)take into account the National Credit Act and regulatory requirements for financial institutions that are authorised and regulated under that Act;
(b)take into account the need for a primarily pre-emptive, outcomes focused and risk-based approach, and prioritise the use of its resources in accordance with the significance of risks to the achievement of its objective; and
(c)to the extent practicable, have regard to international regulatory and supervisory standards set by bodies referred to in subsection (4)(b), and circumstances prevalent in the Republic.
(6)The Financial Sector Conduct Authority must perform its functions without fear, favour or prejudice.

Part 2 – Governance

59. Overall governance objective

The Financial Sector Conduct Authority must manage its affairs in an efficient and effective way, and establish and implement appropriate and effective governance systems and processes, having regard, among other things, to internationally accepted standards in these matters.

60. Establishment and role of Executive Committee

(1)A committee called the Executive Committee is hereby established for the Financial Sector Conduct Authority.
(2)The Executive Committee consists of the commissioner and the deputy commissioners.
(3)The Executive Committee must—
(a)generally oversee the management and administration of the Financial Sector Conduct Authority to ensure that it is efficient and effective; and
(b)act for the Financial Sector Conduct Authority in the following matters:
(i)Authorising the Commissioner to sign, on behalf of the Financial Sector Conduct Authority, a section 27 or section 77 memorandum of understanding and any amendments to such a memorandum;
(ii)delegating powers of the Financial Sector Conduct Authority to the Prudential Authority in terms of a section 77 memorandum of under­standing;
(iii)adopting the regulatory strategy of the Financial Sector Conduct Authority, and any amendments to the strategy;
(iv)adopting the administrative action procedures of the Financial Sector Conduct Authority, and any amendments to those procedures;
(v)appointing members of subcommittees of the Financial Sector Conduct Authority required or permitted by a law, and giving directions regarding the conduct of the work of any subcommittee;
(vi)making conduct standards, joint standards and other regulatory instru­ments in terms of financial sector laws for which it is the responsible authority;
(vii)granting, varying, suspending and revoking licences in terms of a financial sector law;
(viii)making determinations of fees in terms of financial sector laws;
(ix)any other matter assigned in terms of a financial sector law to the Executive Committee.

61. Commissioner and Deputy Commissioners

(1)The Minister must appoint a person who is fit and proper and has appropriate expertise in the financial sector as the Commissioner of the Financial Sector Conduct Authority.
(2)The Minister must appoint at least two, but no more than four, persons who have appropriate expertise in the financial sector as Deputy Commissioners.
(3)The Commissioner and Deputy Commissioners serve in a full-time executive capacity.
(4)A process for the selection of persons for appointment as Commissioner or Deputy Commissioner must be prescribed by Regulation.
(5)
(a)The Commissioner may designate a Deputy Commissioner to act as Commissioner when the Commissioner is absent from office.
(b)If the Commissioner is unable to designate an acting Commissioner in terms of paragraph (a), or if the office of Commissioner is vacant, the Minister may designate a Deputy Commissioner to act as Commissioner during the Commissioner’s absence or pending the appointment of a Commissioner.
(6)A person may not be appointed or hold office as Commissioner or Deputy Commissioner if the person—
(a)is a disqualified person; or
(b)is not ordinarily resident in the Republic.
(7)When appointing the Commissioner or Deputy Commissioner, the Minister and the person appointed must agree, in writing, on—
(a)the performance measures that must be used to assess the person’s performance; and
(b)the level of performance to be achieved against those performance measures.

62. Roles of Commissioner and Deputy Commissioners

(1)The Commissioner—
(a)is responsible for the day-to-day management and administration of the Financial Sector Conduct Authority; and
(b)subject to section 60(3)(b), must perform the functions of the Financial Sector Conduct Authority, including exercising the powers and carrying out the duties associated with those functions.
(2)The roles of the Deputy Commissioners are determined by the Executive Committee.
(3)When acting in terms of subsection (1) or (2), the Commissioner or a Deputy Commissioner must implement the policies and strategies adopted by the Executive Committee.

63. Terms of office

(1)A person appointed as Commissioner or Deputy Commissioner—
(a)holds office for a term determined by the Minister, which term may not be longer than five years;
(b)is, at the expiry of that term, eligible for re-appointment for one further term; and
(c)must vacate office before the expiry of a term of office if that person—
(i)resigns by giving at least three months written notice to the Minister, or a shorter period that the Minister may accept; or
(ii)is removed from office as Commissioner or Deputy Commissioner, as the case may be.
(2)The Minister must, at least three months before the end of a person’s first term of office as Commissioner or Deputy Commissioner, inform the person whether the Minister proposes to re-appoint that person as Commissioner or Deputy Commissioner, as the case may be.

64. Service conditions

(1)Subject to this Act, the Commissioner and the Deputy Commissioners hold office on the terms and conditions determined in writing by the Minister.
(2)The terms and conditions of office of the Commissioner or a Deputy Commissioner may not be reduced during that person’s term of office.

65. Removal from office

(1)The Minister must, subject to due process, remove the Commissioner from office if the Commissioner becomes a disqualified person.
(2)The Commissioner must, subject to due process and with the concurrence of the Minister, remove a Deputy Commissioner from office if the Deputy Commissioner becomes a disqualified person.
(3)The Minister may remove the Commissioner from office if an independent inquiry established by the Minister has found that the Commissioner—
(a)is unable to perform the duties of office for health or other reasons;
(b)has failed in a material way to achieve the level of performance against the performance measures agreed to in terms of section 61(7);
(c)has failed in a material way to discharge any of the responsibilities of office, including any responsibilities entrusted in terms of legislation; or
(d)has acted in a way that is inconsistent with continuing to hold the office.
(4)If an independent inquiry has been established in terms of subsection (3), the Minister may suspend the Commissioner from office pending a decision on that person’s removal from office.
(5)The Commissioner may, with the concurrence of the Minister, remove a Deputy Commissioner from office if an independent inquiry established by the Commissioner, with the concurrence of the Minister, has found that the Deputy Commissioner—
(a)is unable to perform the duties of office for health or other reasons;
(b)has failed in a material way to achieve the level of performance against the performance measures agreed to in terms of section 61(7);
(c)has failed in a material way to discharge any of the responsibilities of office, including any responsibilities entrusted in terms of legislation; or
(d)has acted in a way that is inconsistent with continuing to hold the office.
(6)If an independent inquiry has been established in terms of subsection (5), the Commissioner may suspend the Deputy Commissioner from office pending a decision on that person’s removal from office.
(7)Without limiting subsection (3)(c) or (5)(c), the Commissioner or a Deputy Commissioner, as the case may be, must be taken to have failed in a material way to discharge the responsibilities of office if he or she is absent from two consecutive meetings of the Executive Committee without the leave of the Executive Committee.
(8)If the Commissioner or a Deputy Commissioner is removed from office in terms of this section, the Minister must, within 30 days, submit the report and findings of the independent inquiry to the National Assembly.

66. Meetings of Executive Committee

(1)
(a)The Executive Committee must meet as often as necessary for the performance of its functions.
(b)An audio or audio-visual conference among a majority of the members of the Executive Committee, which enables each participating member to hear and be heard by each of the other participating members, must be regarded as a meeting of the Executive Committee, and each participating member must be regarded as being present at such a meeting.
(2)Meetings of the Executive Committee must be held at times and, except where subsection (1)(b) applies, at places determined by the Commissioner.
(3)A quorum for a meeting of the Executive Committee is a majority of its members.
(4)
(a)The Commissioner chairs the meetings of the Executive Committee at which the Commissioner is present.
(b)If the Commissioner is not present at a meeting, a Deputy Commissioner nominated by the Commissioner or selected in accordance with a procedure determined by the Commissioner, chairs the meeting.
(5)The Commissioner or Deputy Commissioner chairing a meeting of the Executive Committee may invite or allow any other person, including a representative of the Prudential Authority, the Reserve Bank, the Financial Intelligence Centre, the Council for Medical Schemes or the National Credit Regulator, to attend the meeting, but a person who is invited has no right to vote at the meeting.
(6)The members may regulate proceedings at Executive Committee meetings as they consider appropriate.
(7)The Commissioner must ensure that minutes of each meeting of the Executive Committee are kept in a manner determined by the Commissioner.

67. Decisions of Executive Committee

(1)
(a)A proposal before a meeting of the Executive Committee becomes a decision of the Executive Committee if a majority of the members present, or regarded as being present, and who may participate in the consideration of the proposal, vote for the proposal.
(b)In the event of an equality of votes on a proposal, the person chairing the meeting has a casting vote in addition to a deliberative vote.
(2)The Executive Committee may, in accordance with procedures determined by it, make a decision on a proposal outside a meeting of the Executive Committee.
(3)A decision of the Executive Committee is not invalid merely because—
(a)there was a vacancy in the office of a member when the decision was taken; or
(b)a person who was not a member participated in the decision, as long as such person did not vote.

68. Governance and other subcommittees

(1)The Director-General must establish—
(a)a subcommittee to review, monitor and advise the Executive Committee on the remuneration policy of the Financial Sector Conduct Authority; and
(b)a subcommittee to review, monitor and advise the Executive Committee on the risks faced by the Financial Sector Conduct Authority and plans for managing those risks.
(2)The Executive Committee may establish one or more other subcommittees for the Financial Sector Conduct Authority, with functions that the Executive Committee may determine.
(3)
(a)The Director-General determines the membership of each subcommittee established in terms of subsection (1).
(b)The majority of the members of a subcommittee established in terms of subsection (1) may not be staff members of the Financial Sector Conduct Authority.
(c)The Executive Committee determines the membership of each subcommittee established in terms of subsection (2).
(d)A subcommittee established in terms of subsection (2) may include persons who are neither members of the Executive Committee nor staff members of the Financial Sector Conduct Authority.
(e)A disqualified person may not be or remain a member of a subcommittee established in terms of this section.
(4)A member of a subcommittee established in terms of this section, including a person who is not in the service of an organ of state, holds office for the period, and on the terms and conditions, including terms regarding remuneration, determined by the Director-General or the Executive Committee, as the case may be, who established the subcommittee.
(5)A subcommittee established in terms of subsection (1) must be chaired by a person who is not the Commissioner, a Deputy Commissioner or a staff member of the Financial Sector Conduct Authority.
(6)A subcommittee established in terms of this section determines its procedures, subject to any directions of the Director-General or the Executive Committee, as the case may be, who established the subcommittee.
(7)The Commissioner must ensure that minutes of each meeting of each subcommittee established in terms of this section are kept in a manner determined by the Executive Committee.

69. Duties of Commissioner, Deputy Commissioners and other subcommittee members

(1)The Commissioner, each Deputy Commissioner and each member of a subcommittee of the Financial Sector Conduct Authority established as contemplated in section 51(1)(a)(ii) of the Public Finance Management Act or of section 68 of this Act must—
(a)act honestly in all matters relating to the Financial Sector Conduct Authority; and
(b)perform the functions of office as a member—
(i)in good faith;
(ii)for a proper purpose; and
(iii)with the degree of care and diligence that a reasonable person in that person’s position would exercise.
(2)A person who is or has been a person mentioned in subsection (1) must not use the position, or any information obtained because of the position, to—
(a)improperly benefit himself or herself or another person;
(b)impede the Financial Sector Conduct Authority’s ability to perform its functions; or
(c)cause improper detriment to another person.
(3)For the purposes of this section, "benefit" and "detriment" are not limited to financial benefit or detriment.

70. Regulatory strategy

(1)The Executive Committee must, within six months after the date on which this Chapter takes effect, adopt a regulatory strategy for the Financial Sector Conduct Authority to give general guidance in the achievement of its objective and the performance of its regulatory and supervisory functions.
(2)A regulatory strategy must—
(a)state—
(i)the regulatory and supervisory priorities for the Financial Sector Conduct Authority for the next three years; and
(ii)the intended key outcomes of the strategy;
(b)set guiding principles for the Financial Sector Conduct Authority on—
(i)how it should perform its regulatory and supervisory functions;
(ii)the matters which it should have regard to in performing those functions;
(iii)its approach to administrative actions; and
(iv)how it should give effect to the requirements applicable to it with respect to—
(aa)transparency;
(bb)openness to consultation; and
(cc)accountability; and
(c)be aimed at giving effect to section 58.
(3)The Executive Committee must review its regulatory strategy at least annually, and may amend it at any time.
(4)
(a)Before the Executive Committee adopts a regulatory strategy or an amendment to a regulatory strategy, it must—
(i)provide a copy of the draft of the strategy or amendment to the Minister, the Prudential Authority and the National Credit Regulator; and
(ii)invite comments from the Minister, the Prudential Authority and the National Credit Regulator, on the draft, to be made within a period specified by the Executive Committee.
(b)The period referred to in paragraph (a)(ii) must be at least one month.
(5)In deciding whether to adopt a regulatory strategy or an amendment of a regulatory strategy, the Executive Committee must have regard to all comments made on the draft.
(6)If the Minister agrees, the Financial Sector Conduct Authority’s adopted regulatory strategy may be incorporated into its corporate plan in terms of section 52(b) of the Public Finance Management Act.
(7)The Executive Committee must seek to minimise, to the extent that is practicable and appropriate, inconsistencies between the Financial Sector Conduct Authority’s regulatory strategy and the Prudential Authority’s regulatory strategy.
(8)The Commissioner must—
(a)provide a copy of the Financial Sector Conduct Authority’s regulatory strategy, and each amendment, as adopted, to the Minister, the Prudential Authority and the National Credit Regulator; and
(b)publish the regulatory strategy and each amendment.

71. Delegations

(1)The Executive Committee may, in writing—
(a)delegate any power or duty of, or delegated to, the Financial Sector Conduct Authority in terms of a financial sector law to the Commissioner or a Deputy Commissioner, except—
(i)the power to delegate contained in this subsection; and
(ii)the powers referred to in section 60(3)(b)(i) to (viii);
(b)delegate to an administrative action committee the power to impose administrative penalties that are specified in the delegation, if the Financial Sector Conduct Authority establishes an administrative action committee; and
(c)at any time, amend a delegation made in terms of paragraph (a) or (b).
(2)The Commissioner may, in writing—
(a)delegate any power or duty assigned or delegated to the Commissioner in terms of a financial sector law, except the power to delegate contained in this subsection, to—
(i)a Deputy Commissioner; or
(ii)a staff member of the Financial Sector Conduct Authority; and
(b)at any time, amend a delegation made in terms of paragraph (a).
(3)A Deputy Commissioner may, in writing—
(a)delegate any power or duty delegated to that Deputy Commissioner in terms of a financial sector law, except the power to delegate contained in this subsection, to a staff member of the Financial Sector Conduct Authority; and
(b)at any time, amend a delegation made in terms of paragraph (a).
(4)A delegation in terms of subsection (2)(a)(ii) or (3)(a) may be made to a specified person or to a person holding a specified position.
(5)Any power or duty of the Financial Sector Conduct Authority may be delegated to the Prudential Authority by a section 77 memorandum of understanding in accordance with a framework and system of delegation developed by the financial sector regulators to ensure that any delegation does not constrain the Prudential Authority or the Financial Sector Conduct Authority from achieving their respective objectives as set out in sections 33 and 57.
(6)A delegation made in terms this section—
(a)is subject to the limitations and conditions specified in the delegation;
(b)does not divest the Financial Sector Conduct Authority, the Commissioner or the Deputy Commissioner concerned of responsibility in respect of the delegated power or duty; and
(c)may be revoked in writing at any time, but a revocation does not affect any rights or liabilities accrued because of the acts of the delegate.
(7)Anything done by a delegate in terms of the delegation must be regarded as having been done by the Financial Sector Conduct Authority.
(8)This section does not affect a power under a specific financial sector law to delegate a power of the Financial Sector Conduct Authority.

72. Disclosure of interests

(1)A member of the Executive Committee must disclose, at a meeting of the Executive Committee, or in writing to each of the other members, any interest in any matter that is being or is intended to be considered by him or her, whether or not at a meeting of the Executive Committee, being an interest that—
(a)the member has; or
(b)a person who is a related party to the member has.
(2)A disclosure in terms of subsection (1) must be given as soon as practicable after the member concerned becomes aware of the interest.
(3)
(a)A member referred to in subsection (1) may not perform a function in relation to the matter concerned unless—
(i)the member has disclosed the interest as required by subsection (1); and
(ii)the other members of the Executive Committee have decided that the interest does not affect the proper execution of the member’s functions in relation to the matter.
(b)Any consideration of, or decision on, a matter which does not comply with paragraph (a) is void and must be reconsidered or decided without the member present.
(4)A member of a subcommittee of the Financial Sector Conduct Authority established as contemplated in section 51(1)(a)(ii) of the Public Finance Management Act or section 68(1) of this Act must disclose, at a meeting of the subcommittee, or in writing to each of the other members of that subcommittee, any interest in a matter that is being or is intended to be considered by that subcommittee, being an interest that—
(a)the member has; or
(b)a person who is a related party to the person has.
(5)A disclosure in terms of subsection (4) must be given as soon as practicable after the member concerned becomes aware of the interest.
(6)A member referred to in subsection (4) may not participate in the consideration of or decision on that matter by the subcommittee unless —
(a)the member has disclosed the interest in accordance with subsection (4); and
(b)the other members of that subcommittee have decided that the interest does not affect the proper execution of the member’s functions in relation to the matter.
(7)
(a)Each member of the Financial Sector Conduct Authority’s staff and each other person to whom a power or function of the Financial Sector Conduct Authority has been delegated must make timely, proper and adequate disclosure of their interests, including the interests of a related party, that could reasonably be seen as interests that may affect the proper execution of their functions of office or the delegated power.
(b)The Commissioner must ensure that paragraph (a) is complied with.
(8)For the purposes of this section, it does not matter—
(a)whether an interest is direct, indirect, pecuniary or non-pecuniary; or
(b)when the interest was acquired.
(9)For the purposes of this section, a person does not have to disclose—
(a)the fact that that person, or a person who is a related party to that person, is—
(i)an official or employee of the Financial Sector Conduct Authority; or
(ii)a financial customer of a financial institution; or
(b)an interest that is not material.
(10)The Commissioner must maintain a register of all disclosures made in terms of this section and of all decisions made in terms of this section.

Part 3 – Staff and resources

73. Staff and resources

(1)The Financial Sector Conduct Authority may, in accordance with applicable law—
(a)for the work of the Financial Sector Conduct Authority—
(i)appoint persons as employees;
(ii)enter into secondment arrangements; or
(iii)engage persons on contract otherwise than as employees;
(b)enter into contracts;
(c)acquire and dispose of property;
(d)insure itself against any loss, damage, risk or liability that it may suffer or incur; and
(e)do anything else necessary for the performance of its functions.
(2)The Financial Sector Conduct Authority may not enter into a secondment arrangement in respect of a person, or engage persons as employees or on contract, unless the person and the Authority have agreed in writing on—
(a)the performance measures that must be used to assess that person’s performance; and
(b)the level of performance that must be achieved against those measures.

74. Duties of staff members

(1)A person who is or was a staff member of the Financial Sector Conduct Authority may not use that position or any information obtained as a staff member to—
(a)improperly benefit himself or herself or another person;
(b)impede the Financial Sector Conduct Authority’s ability to perform its functions; or
(c)cause improper detriment to another person.
(2)For the purposes of this section, "benefit" and "detriment" are not limited to financial benefit or detriment.

75. Information by Commissioner

(1)The Commissioner must provide the Executive Committee and the National Treasury with the information, returns, documents, explanations and motivations that may be prescribed by Regulation for this section or that the Executive Committee or the National Treasury may request.
(2)Subsection (1) does not require or permit the provision of information about persons identifiable from the information.

Chapter 5
Co-operation and collaboration

Part 1 – Co-operation and collaboration

76. Co-operation and collaboration between financial sector regulators and Reserve Bank

(1)The financial sector regulators and the Reserve Bank must co-operate and collaborate when performing their functions in terms of financial sector laws, the National Credit Act, and the Financial Intelligence Centre Act, and must for this purpose—
(a)generally assist and support each other in pursuing their objectives in terms of financial sector laws, the National Credit Act and the Financial Intelligence Centre Act;
(b)inform each other about, and share information about, matters of common interest;
(c)strive to adopt consistent regulatory strategies, including addressing regula­tory and supervisory challenges;
(d)co-ordinate, to the extent appropriate, actions in terms of financial sector laws, the National Credit Act and the Financial Intelligence Centre Act, including in relation to—
(i)standards and other regulatory instruments, including similar instru­ments provided for in terms of the National Credit Act and the Financial Intelligence Centre Act;
(ii)licensing;
(iii)supervisory on-site inspections and investigations;
(iv)actions to enforce financial sector laws, the National Credit Act and the Financial Intelligence Centre Act;
(v)information sharing;
(vi)recovery and resolution; and
(vii)reporting by financial institutions, including statutory reporting and data collection measures;
(e)minimise the duplication of effort and expense, including by establishing and using, where appropriate, common or shared databases and other facilities;
(f)agree on attendance at relevant international forums; and
(g)develop, to the extent that is appropriate, consistent policy positions, including for the purpose of presentation and negotiation at relevant South African and international forums.
(2)The financial sector regulators and the Reserve Bank must, at least annually as part of their annual reports, or on request, report to the Minister, the Cabinet member responsible for administering the National Credit Act and the National Assembly on measures taken to co-operate and collaborate with each other.

77. Memoranda of understanding

(1)The financial sector regulators and the Reserve Bank, must, as soon as practicable but not later than six months after the date on which this Chapter comes into effect, enter into one or more memoranda of understanding to give effect to their obligations in terms of section 76.
(2)A delegation of a power or duty by a financial sector regulator to another financial sector regulator must be effected by a memorandum of understanding entered into in terms of this section.
(3)The validity of any action taken by a financial sector regulator, the Reserve Bank or the Governor in terms of a financial sector law, the National Credit Act and the Financial Intelligence Centre Act is not affected by a failure to comply with this section or a memorandum of understanding in terms of this section.
(4)The financial sector regulators and the Reserve Bank must review the memoranda of understanding at least once every three years and amend them as appropriate.
(5)The financial sector regulators and the Reserve Bank must provide a copy of each memorandum of understanding entered into in terms of this section, and each amendment of such a memorandum of understanding, to the Minister and the Cabinet member responsible for administering the National Credit Act.
(6)The financial sector regulators and the Reserve Bank must each publish each memorandum of understanding in terms of this section and each amendment thereof.

78. Other organs of state

(1)An organ of state that has a regulatory or supervisory function in relation to financial institutions must, to the extent practicable, consult the financial sector regulators and the Reserve Bank in relation to the performance of that function.
(2)A financial sector regulator or the Reserve Bank may, in writing, request an organ of state referred to in subsection (1) to provide information about any action that the organ of state has taken or proposes to take in relation to a financial institution specified in the request.
(3)The organ of state must comply with a request in terms of subsection (2), but this subsection does not require or permit an organ of state to do something that contravenes a law.

Part 2 – Financial System Council of Regulators

79. Financial System Council of Regulators

(1)The Financial System Council of Regulators is hereby established.
(2)The objective of the Financial System Council of Regulators is to facilitate co-operation and collaboration, and, where appropriate, consistency of action, between the institutions represented on the Financial System Council of Regulators by providing a forum for senior representatives of those institutions to discuss, and inform themselves about, matters of common interest.
(3)The Financial System Council of Regulators must be composed of the following members:
(a)The Director-General;
(b)the Director-General of the Department of Trade and Industry;
(c)the Director-General of the Department of Health;
(d)the Chief Executive Officer;
(e)the Commissioner;
(f)the Chief Executive Officer of the National Credit Regulator;
(g)the Registrar of Medical Schemes;
(h)the Director of the Financial Intelligence Centre;
(i)the Commissioner of the National Consumer Commission;
(j)the Commissioner of the Competition Commission;
(k)the Deputy Governor responsible for financial stability matters; and
(l)the head, however described, of any organ of state or other organisation that the Minister may determine.

80. Meetings

(1)Meetings of the Financial System Council of Regulators must be held at least twice a year, or more frequently as determined by the Director-General.
(2)The Director-General, or an alternate nominated by the Director-General, chairs the meetings of the Financial System Council of Regulators.
(3)The Director-General must convene a meeting at the request of a member of the Financial System Council of Regulators.
(4)A member of the Financial System Council of Regulators may, with the concurrence of the Director-General, nominate a senior official of the member’s institution to act as an alternate for the member.
(5)Meetings of the Financial System Council of Regulators must be conducted in accordance with procedures determined by it.

81. Working groups and subcommittees

(1)The Financial System Council of Regulators must establish working groups or subcommittees in respect of the following matters:
(a)Enforcement and financial crime;
(b)financial stability and resolution;
(c)policy and legislation;
(d)standard-setting;
(e)financial sector outcomes;
(f)financial inclusion;
(g)transformation of the financial sector; and
(h)any other matter that the Director-General may determine after consulting the other members of the Financial System Council of Regulators.
(2)The Financial System Council of Regulators must determine the membership, terms of reference and procedure of a working group or subcommittee.

82. Support for Financial System Council of Regulators

(1)The Financial Sector Conduct Authority must provide administrative support and other resources for the Financial System Council of Regulators and its working groups and subcommittees.
(2)The Financial Sector Conduct Authority must ensure that minutes of each meeting of the Financial System Council of Regulators, and of each meeting of a working group or subcommittee, are kept in a manner determined by the Financial Sector Conduct Authority.

Part 3 – Financial Sector Inter-Ministerial Council

83. Financial Sector Inter-Ministerial Council

(1)The Financial Sector Inter-Ministerial Council is hereby established.
(2)The objective of the Inter-Ministerial Council is to facilitate co-operation and collaboration between Cabinet members responsible for administering legislation relevant to the regulation and supervision of the financial sector by providing a forum for discussion and consideration of matters of common interest.
(3)The members of the Inter-Ministerial Council are —
(a)the Minister;
(b)the Cabinet members responsible for consumer protection and consumer credit matters;
(c)the Cabinet member responsible for health; and
(d)the Cabinet member responsible for economic development.

84. Meetings

(1)Meetings of the Inter-Ministerial Council take place at times and places determined by the Minister.
(2)The Minister, or another Cabinet member nominated by the Minister, chairs the meetings of the Inter-Ministerial Council.
(3)The Minister must convene a meeting at the request of a member of the Inter-Ministerial Council.
(4)A member of the Inter-Ministerial Council may nominate a Deputy Minister to act as alternate for the member at a particular meeting of the Inter-Ministerial Council.
(5)The Minister may invite any Cabinet member who is not a member of the Inter-Ministerial Council to attend a meeting of the Inter-Ministerial Council.
(6)Meetings of the Inter-Ministerial Council are conducted in accordance with procedures determined by it.

85. Protection for financial customers in terms of financial sector laws, National Credit Act and Consumer Protection Act

(1)The Cabinet members responsible for consumer protection and consumer credit matters may request the Inter-Ministerial Council to consider whether or not a provision in a financial sector law, or in a proposed financial sector law, Regulation or regulatory instrument, provides or would provide for a standard of protection for financial customers that is equivalent to, or higher than, the protection provided for them in terms of the National Credit Act or the Consumer Protection Act.
(2)The Inter-Ministerial Council—
(a)must comply with the request; and
(b)may, if it considers that the provision does not provide for such a standard of protection for financial customers, make recommendations to amend the provision, or to take other lawful and appropriate action, to ensure that the protection is at least equivalent.

86. Independent evaluation of effectiveness of co-operation and collaboration

(1)
(a)The Inter-Ministerial Council must, as soon as practicable following the expiration of the six month period described in section 77(1), commission an independent evaluation of the establishment of co-operative and collaborative mechanisms between the financial sector regulators, the Reserve Bank, the Financial Intelligence Centre, the Council for Medical Schemes and the Competition Commission.
(b)The Inter-Ministerial Council must, every two years after the initial independent evaluation referred to in paragraph (a), commission an independent evaluation of the effectiveness of co-operative and collaborative mechanisms between the financial sector regulators, the Reserve Bank, the Financial Intelligence Centre, the Council for Medical Schemes and the Competition Commission.
(2)An evaluation in terms of this section must at least contain an analysis and evaluation of the memoranda of understanding required in terms of section 77, the outcome of any and all consultations in terms of section 78, and compliance with those sections.
(3)The Inter-Ministerial Council may on its own initiative, or at the request of a financial sector regulator, at any time commission an independent evaluation of the effectiveness of co-operation and collaboration between the financial sector regulators, the Reserve Bank, the Financial Intelligence Centre, the Council for Medical Schemes and the Competition Commission.
(4)When a financial sector regulator makes a request for an evaluation, the Inter-Ministerial Council must consider the request and the concerns raised in the request regarding the effectiveness of co-operation and collaboration, and, if the Council rejects the request, provide the financial sector regulator that made the request with the reasons for rejecting the request.
(5)Any evaluation commissioned by the Inter-Ministerial Council in terms of this section must be tabled in Parliament immediately following the Council’s consideration of the evaluation, and must be accompanied by a report from the Council on the evaluation’s contents.

Chapter 6
Administrative actions

Part 1 – Administrative action committees

87. Establishment and membership

(1)A financial sector regulator may establish an administrative action committee to consider and make recommendations to the financial sector regulator on matters that are referred to it by that financial sector regulator.
(2)The members of an administrative action committee —
(a)must include—
(i)a retired judge; or
(ii)an advocate or attorney with at least 10 years relevant legal experience; and
(b)may include persons who are not members of the Prudential Committee or the Executive Committee or staff members of the financial sector regulator.
(3)A person referred to in subsection (2)(a) must be appointed as chairperson of an administrative action committee.
(4)A disqualified person may not be appointed to, or remain a member of, an administrative action committee.

88. Terms of membership

(1)A person appointed as a member of a financial sector regulator’s administrative action committee who is not a member of the Prudential Committee, the Executive Committee or a staff member of a financial sector regulator holds office for a period not exceeding five years, and on the terms, including terms regarding remuneration, determined by the financial sector regulator.
(2)A member of an administrative action committee whose term expires may be reappointed.
(3)The financial sector regulator that established an administrative action committee may, subject to due process, remove a member of the administrative action committee from office if the member—
(a)is unable to perform the functions of the office effectively;
(b)has failed in a material way to discharge any of the responsibilities of the office; or
(c)has acted in a way that is inconsistent with continuing to hold the office.
(4)Without limiting subsection (3)(b), a member must be taken to have failed in a material way to discharge the responsibilities of office if he or she is absent from two consecutive meetings of the administrative action committee without the leave of the administrative action committee.

89. Meetings

(1)A meeting of an administrative action committee—
(a)is convened by the chairperson of the committee; and
(b)is chaired by the chairperson or, in the chairperson’s absence, by another member designated by the chairperson or the remaining members.
(2)An administrative action committee determines its procedures, subject to any directions of the financial sector regulator that established the administrative action committee.
(3)The financial sector regulator must ensure that written minutes of each meeting of its administrative action committee are kept in a manner determined by the financial sector regulator.

90. Application of Part to Ombud Council

This Part applies, with the necessary changes required by the context, in relation to the Ombud Council.

Part 2 – Administrative justice

91. Applicability of Promotion of Administrative Justice Act to administrative action by financial sector regulators

The Promotion of Administrative Justice Act applies to any administrative action taken by a financial sector regulator in terms of this Act or a specific financial sector law.

92. Procedures for specific administrative action in terms of Act

(1)A financial sector regulator may, by notice in the Register, determine procedures for administrative action to be taken by it in terms of a financial sector law, which procedures must—
(a)be aimed at promoting a fair and consistent approach to administrative action taken by the financial sector regulator in terms of the financial sector laws; and
(b)be consistent with—
(i)the principles of the Promotion of Administrative Justice Act; and
(ii)any applicable requirements of a financial sector law.
(2)If it is reasonable and justifiable in the circumstances, procedures for administrative action may depart from specific requirements of the Promotion of Administrative Justice Act, in accordance with sections 3(4), 4(4) and 5(4) of that Act.
(3)Different procedures may be determined for different types of administrative actions and different circumstances.

93. Processes for determining or amending administrative action procedures

(1)Before a financial sector regulator determines or amends an administrative action procedure in terms of section 92, the financial sector regulator must—
(a)publish on its website —
(i)a draft of the proposed procedure or amendment; and
(ii)a notice calling for written public comment within a period stated in the notice, which must be at least 30 days from the date of publication of the notice;
(b)submit a draft of the proposed procedure or amendment to the Director-­General and the other financial sector regulator; and
(c)consider any comments received.
(2)If a financial sector regulator intends to make an administrative action procedure or amendment that is materially different in form from the draft procedure or amendment that was previously published in terms of subsection (1), the regulator must, before making the procedure or amendment, repeat the process referred to in subsection (1).

94. Review of administrative action procedures

A financial sector regulator must review its