Financial Services Regulation - Monthly Update: November 2022

​​Keep up to date on key Financial Services Regulation developments in South Africa during November 2022.

Amendment to Schedules to the Financial Intelligence Centre Act

On 29 November 2022, amendments to the Schedules to the Financial Intelligence Centre Act, 2001 (FICA) were published and will come into effect from 19 December 2022. The amendments relate to changes affecting accountable institutions listed in Schedule 1, supervisory bodies listed in Schedule 2, and reporting institutions listed in Schedule 3 to the FIC Act.

Increase in sectoral coverage of accountable institutions

The amendments include adding additional sectors to the definition of ‘accountable institutions'. These sectors will now be required to register with the FIC as accountable institutions This will enable the FIC to obtain information concerning the financial activities of a wider range of financial, non-financial and crypto asset service providers (CASPs). The following institutions are now included in Schedule 1 to the FIC Act:

  • co-operative banks
  • company service providers (as defined in Schedule 1)
  • credit providers as defined in the National Credit Act (see here)
  • high-value goods dealers
  • the South African Mint Company
  • CASPs (see here)
  • money or value transfer providers
  • clearing system participants as defined in the National Payment System Act

In addition, accountable institutions are required to fill regulatory reports relating to suspicious and unusual transactions, cash transactions exceeding the prescribed threshold and property transactions liked to sanctioned persons, terrorist activities or terrorist organisations.

Widening of the scope of activities for Schedule 1 businesses

The following amendments will widen the scope of business activities by including the following as designated institutions:

  • trust and company service providers
  • credit providers
  • money or value transfer providers which include informal money remitters

This widened scope ensures alignment with Financial Action Task Force (FATF) standards.

Removal of Schedule 3 reporting entities

The introduction of a new category of ‘high-value goods dealers’ in Schedule 1 necessitates the removal of certain entities from Schedule 3, as these entities now fall into the definition of ‘high-value goods dealers’. Such entities include businesses dealing in high-value goods receiving payments in any form of ZAR100 000 or more per item, such as motor vehicle dealers and Kruger rand dealers which were previously listed in Schedule 3.

Additional supervisory amendments

For the first 18 months from the commencement of the amendments, the FIC and supervisory bodies will focus on entrenching the FICA risk and compliance provisions and implementing the amendments among the new sectors introduced in Schedule 1. In respect of these sectors, the FIC does not envisage issuing any financial penalties for non-compliance during the 18-month transitional period.

FSCA Regulation 28 Quarterly reporting Prudential requirements

On 4 November 2022, the Financial Sector Conduct Authority (FSCA) published a draft Prudential standard (draft standard) that prescribes quarterly reporting for pension funds. The draft standard now also includes quarterly reporting in respect of Infrastructure, the overall limit for Infrastructure across all classes and the overall limit for all instruments per entity or issuer.

The FSCA identified the need to urgently update the quarterly reports for pension funds in line with the recent amendments to Regulation 28, which come into effect on 3 January 2023, to ensure disclosures, consistency, and transparency in the application of reporting requirements across all pension funds, to promote legal certainty and to protect pension fund members

The last day to submit comments on the draft standard is 7 December 2022.

FSCA Draft Conduct Standard – Requirements relating to the provision of a benchmark​


On 25 November 2022 the FSCA published a revised draft conduct standard on the requirements for providing a benchmark.

The first draft was published on 28 February 2022 following the publication in September 2021 by National Treasury of draft regulations that designated the “provision of a benchmark” as a financial service in terms of section 3(3) of the Financial Sector Regulation Act, No 9 of 2017 (FSR Act).

Section 3(3)(a)(iii) of the FSR Act provides that the regulations may designate the provision of a benchmark or index as a financial service if doing so will further the object of the Act.


The FSCA says the main objective of the conduct standard is to ensure the accuracy, robustness and integrity of benchmarks and the way benchmarks are determined. It seeks to achieve this by setting out requirements for benchmark administrators.
Once the regulations take effect, new and existing benchmark administrators will have to apply for a licence from the FSCA and comply with the conduct standard.

The Regulation will address:

  1. the lack of a formal regulatory framework for the provision of a benchmark in South Africa
  2. harmonisation with International Standard-Setting Bodies and International Best Practice
  3. the need for South Africa to be recognised as an equivalent jurisdiction by the EU

Requirements for benchmark administrators

  1. They must publish a benchmark statement on each benchmark and each family of benchmarks on its website. The conduct standard sets out the minimum information that must be included in the benchmark statement.
  2. They must establish “adequate systems and effective controls” to ensure the integrity of input data so they can identify and report to the FSCA any conduct that may involve the manipulation or attempted manipulation of a benchmark.
  3. They must have policies and procedures in place for their employees and any other natural persons whose services are placed at their disposal or under their control to report to the administrator’s governing body on any matter that constitutes a contravention of the conduct standard.
  4. They must develop a code of conduct to manage the relationship between the benchmark administrator and the benchmark contributor in respect of the submission of input data to the administrator. The benchmark administrator must be satisfied that benchmark contributors continuously adhere to the code of conduct.

Comments from the March 2022 public consultation

At the close of the public consultation period, the Authority received a total of 167 comments from 10 industry stakeholders.
The overarching theme of the responses was that the draft Conduct Standard was too onerous for local benchmark providers and would create barriers to entry while strengthening monopolies.

In response to this, the regulator adopted a flexible approach by allowing exemptions to certain requirements for non-significant benchmarks and regulated data benchmarks.

Close of Submissions and Implementation

The close of submissions is 6 February 2023 and it is anticipated that the regulation will come into effect in 2024. Benchmark administrators will have 12 months to comply during which period they can still publish benchmarks.

Draft Prudential Standard RA02 – Transfer of assets and liabilities of designated institution in resolution

The Draft Prudential Standard RA02 (the Draft Standard) sets out the principles and requirements for the transfer or creation of an interest in the assets and liabilities of designated institutions in resolution which must be complied with by all designated institutions, in line with sound principles, practices and processes for the orderly resolution of a designated institution. The Draft Standard intends to give effect to the objectives and requirements of the Financial Sector Regulation Act, 2017 (FSR Act) as amended by the Financial Sector Laws Amendment Act, 2021 (FSLAA). Chapter 12A of the FSLAA covers institutions in resolution, however, these provisions are not yet in force.

The Draft Standard covers transactions relating to the transferring or creating of an interest in the assets and liabilities of a designated institution in resolution, as provided for in section 166S(2)(a) of the FSLAA. The Draft Standard sets out requirements for designated institutions to comply with, including the planning and execution of a resolution transfer tool, defining the transfer perimeter, governance requirements, general compliance, and reporting.

The Draft Standard and accompanying comments template are available on the Prudential Authority’s (the PA) website. Comments and accompanying documents must be submitted to by no later than 20 December 2022.

Ithala SOC Limited v South African Reserve Bank and Others (010146/2022) [2022] ZAGPPHC 784

Ithala SOC Limited (Ithala) approached the High part with an application in two parts. In this Part A, Ithala seeks an interim interdict and Part B is a review application which has not yet been heard in court.

Ithala Development Finance Corporation Limited (IDFL) is a public entity in terms of the Public Finance Management Act and provides financial services to the people of KwaZulu-Natal (KZN). IDFL is empowered in terms of the KZN Ithala Development Finance Corporation Act to accept, invest and hold deposits offered by any person on conditions determined by the Minister of Finance or the Registrar of Banks.

The source of the issue before the court is that on 12 July 2022, the PA, with the approval of the Minister, designated that the business of Ithala shall not be deemed to constitute the business of a bank until 15 December 2023, subject to certain conditions (the offending conditions). It was alleged that the offending conditions were imposed in a manner which was procedurally unfair and irrational.

The review of the decision to impose the offending conditions remains to be heard, however, in the present case, the court considered whether the requirements for an interim interdict were met. The Court noted that section 1(1)(cc) of the Banks Act, 1990 empowers the PA to provide approval for a public, governmental or other institution to conduct the business of a bank, provided such activity is performed in accordance with such conditions as are determined by the PA with approval of the Minister.

The Court concluded that Ithala cannot perform the business of a bank without complying with the conditions set. No prima facie right was established and the requirements for an interim interdict were not met.

The application was dismissed with costs.


These materials are provided for general information purposes only and do not constitute legal or other professional advice. While every effort is made to update the information regularly and to offer the most current, correct and accurate information, we accept no liability or responsibility whatsoever if any information is, for whatever reason, incorrect, inaccurate or dated. We accept no responsibility for any loss or damage, whether direct, indirect or consequential, which may arise from access to or reliance on the information contained herein.

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Webber Wentzel > News > Financial Services Regulation - Monthly Update: November 2022
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