COVID-19 South Africa: Impact on Corporate Governance Procedures
On 10 June 2020, the Prudential Authority published Communication 1 of 2020, wherein the Prudential Authority has stated it is imposing a temporary moratorium on the issuance of new licenses for a period of 6 months, unless there are exceptional circumstances as may be determined by the Prudential Authority.
Having regard to the COVID-19 pandemic, the Prudential Authority has determined that the temporary suspension is necessary due to additional challenges that the current economic environment would inevitably pose for new entrants.
The temporary suspension however will not apply to:
The approach of the Prudential Authority to suspend new license applications aligns with the approach taken by the Australian Prudential Regulation Authority (APRA), which as early as 8 April 2020 equally imposed a moratorium of new license applications.
The Prudential Authority has undertaken to monitor global and domestic economic developments for the duration of the suspension period and review the suspension should it become necessary.
A copy of the Prudential Authority's communication can be accessed here