Financial Services Regulation

​​​Banks and Credit Providers Regulation

The South African banking regulatory framework is characterised by a sophisticated and complicated set of rules and requirements that are aligned with applicable international standards and best practices.

We advise on all legal and regulatory issues affecting banks, banking groups and conglomerates ranging from compliance-related reviews to advice on capital adequacy issues.

​Our offering also includes advising:

  • banks (and other financial institutions) on treasury-related activities and transactions such as over-the-counter derivatives (ISDA), securities lending (GMSLA) and repo-transactions (GMRA);
  • foreign banks (with a presence in South Africa) on aligning their policies, practices and procedures with applicable South African law;
  • banks and other credit providers (including micro-lenders and retailers) on all aspects relating to the National Credit Act, 2005; and
  • credit providers with new product development, document reviews and representation before the National Consumer Tribunal.
Collective Investment Schemes/Pooled Funds Regulation

South African legislation makes provision for the regulation of most investment vehicles, including pooled investment vehicles and most types of exchange-traded funds.

Our service offering includes:

  • advising and structuring pooled funds or investment vehicles through either local or foreign collective investment schemes or through linked insurance products offered by insurers or through alternative banking products;
  • advising on exchange-traded and hedge funds; and
  • advising foreign clients on marketing participatory interests in foreign collective investment schemes in South Africa (taking the provisions of the regulation dealing with financial advisers and intermediaries into account).
Conglomerates Regulation

Large financial groups, and groups consisting of banks and insurers are regulated as conglomerates in terms of the Financial Sector Regulation Act due to their systemic significance for South Africa.

We have assisted a number of insurance, banking and other financial conglomerates, with the regulatory aspects of restructuring, and with transactions where groups have merged or where the banking and insurance businesses were separated and sold off. Our experience includes assisting one of the largest banking and insurance groups in South Africa to restructure its South African and international businesses, taking the legal framework for conglomerates in South Africa and abroad into account.

Financial Advisers and Intermediaries Regulation

The 2014 Retail Distribution Review (RDR) introduced a new way of distributing financial products and proposed significant changes related to the rendering of advice, intermediation and outsourced services. These changes include structural changes to groups and their distribution force, taking the limitations imposed on advisers and product supplier agents into account, and dealing with conflicts of interests.

We provide regulatory advice related to compliance with the legislation governing financial advisors and intermediaries, including the framework to be created under RDR. We also regularly assist financial advisers and intermediaries with debarment enquiries and related matters.

Insurers and Reinsurers Regulation

The insurance sector has seen significant changes over the past five years and is fast becoming one of the most regulated sectors in South Africa. There is a plethora of complex legislation dealing specifically with prudential regulation and market conduct regulation.

Our service offering includes:

  • advising clients and industry bodies on the impact of legislative changes in the insurance industry on their businesses;
  • advising insurers and reinsurers, locally and abroad on all aspects of financial sector regulation and the interaction with other financial institutions and regulations;
  • advising on reorganisations of insurance groups and conglomerates, bancassurance products, cell captive arrangements and remuneration structures and distribution models;
  • advising on insurance group supervision and regulation and governance structures for insurance groups;
  • advising reinsurance companies (local and offshore) on the regulatory framework in South Africa and the application thereof to their businesses; and
  • representing clients in ombudsman complaints, investigations and litigation matters related to insurance and financial sector regulation.
Investment Managers Regulation

Investment managers are highly regulated in respect of advice, and intermediation, outsourcing and common law principles dealing with the law of agency given the assets managed by such investment managers for the general public but also for other financial institutions such as insurers and collective investment schemes.

Our service offering includes:

  • advising local and foreign investment managers on a number of key pieces of legislation, including the Financial Sector Regulation Act, the Financial Advisory and Intermediary Services Act, Collective Investment Schemes Control Act and the Financial Markets Act;
  • advising investment managers on the new regulations issued under the Financial Markets Act that regulate over-the-counter derivative providers, central counterparties and trade repositories; and
  • advising on restructuring the business of investment managers, advisors and intermediaries and stockbrokers in line with the Retail Distribution Review.
Medical Schemes Regulation

Our deep expertise in the Medical Schemes Act has equipped us to advise on all regulatory aspects related to medical schemes. We have specific expertise around the demarcation of health business and insurance business and have been intimately involved in the regulations dealing with such demarcation.

Payment Systems and Service Providers Regulation

We advise on various aspects of payment systems regulation, including advising payment service providers, system operators, clearing and settlement systems, and card network operators.

We are at the forefront of a number of impending and regulatory reforms to the South African payment system regulatory model and have advised extensively on the impact such proposed reforms may have on domestic and cross-border payment service providers and networks.

Our service offering includes:

  • advising on the South African regulatory implications applicable in the structuring and implementation of various payment technologies including the development of digital wallets, automatic billing updater, dynamic currency conversion, fraud early detection systems, and contactless payment systems;
  • advising on the development and implementation of alternative payment models and systems;
  • advising on the exchange control implications on the implementation of payment systems, products and services; and
  • engaging with the South African Reserve Bank and the Payments Association of South Africa.
Retirement Funds Regulation

The South African retirement fund market is characterised by the existence of pension funds, provident funds, stand-alone funds and umbrella funds. Retirement funds are primarily regulated by the Pension Funds Act and its regulations. However, in cases of wholly or partially underwritten retirement funds, insurers play a significant role in the provision of pension benefits.

Our service offering includes advising:

  • on the interplay between insurers and retirement funds and the provision of pooling and assets solutions such as fund policies, fund-linked policies and fund member policies, including reinsurance arrangements;
  • on Regulation 28 of the Regulations to the Pension Funds Act, as well as the roles and responsibilities of trustees and pension fund administrators; and
  • employers, employees and funds on all aspects of the provision of retirement fund benefits, including reviewing and revising the rules and benefit offerings as well as understanding the pension promise contained in contracts of employment and employment policies and practices.
Stock Exchanges Regulation

We have in-depth and holistic knowledge of the regulatory framework impacting on exchanges and related market infrastructures.

​​Our service offering includes:

  • acting for the Johannesburg Stock Exchange (JSE) on a range of regulatory matters;
  • advising on the JSE Listings Requirements as well as the rules governing conduct on the JSEs various exchanges (ie the equities market, the derivatives market and the interest rate/bond market);
  • advising stockbrokers and authorised users on various issues affecting them, specifically also the interplay in large financial groups;
  • advising on custody and settlement issues relating to exchange-traded (and other) securities; and
  • advising on bespoke structured-product listings that fall outside the norm.