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Africa
Insurance & Reinsurance
South Africa has just published the final Joint Standard on the Fitness and Propriety of Significant Owners, in an effort to further regulate its financial sector. This article provides a detailed overview of the key requirements set by the Joint Standard.
On 1 June 2020, South Africa's Financial Sector Conduct Authority ("FSCA") and the Prudential Authority ("the Authorities") jointly published Joint Standard 1 of 2020: Fitness, propriety and other matters related to significant owners ("Joint Standard").
The Joint Standard applies to significant owners of financial institutions (i.e. a person who directly or indirectly, alone or together with a related or inter-related person, has the ability to control or influence materially the business or strategy of a financial institution) and financial institutions (as defined in the Financial Sector Regulation Act, 2017), and sets out the criteria that must be met by significant owners in order to be considered fit and proper.
The Joint Standard follows the publication of the initial consultation paper and initial draft joint standard on 16 November 2018, as well as the draft standard initially released for public comment on 23 July 2019.
The Joint Standard inter alia delineates:
In addition, the Joint Standard indicates that the fit and proper requirements of significant owners applies to significant owners of all financial institutions (as contemplated in the Financial Sector Regulation Act, 9 of 2017), unless exempted. In this regard, Exemption Notice 1/2020 and FSCA GENERAL Notice 3 of 2020 have been issued by the Prudential Authority and the FSCA respectively ("Exemptions"), in terms whereof the following financial institutions are exempt from compliance with the Joint Standard:
The Joint Standard and the Exemptions take effect on 1 December 2020. The Authorities have accordingly provided for a 6 month transitional period to facilitate effective implementation of the Joint Standard.
For any further information on how the Joint Standard may apply to you and your organisation, please contact Ernie van der Vyver or Nicole Britton.
A copy of the draft Joint Standard can be accessed here, together with the following accompanying documentation:
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