South Africa Law Update
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Financial Sector Regulation Act 2017 Signed Into Law By President Jacob Zuma

On 21 August, 2017, President Jacob Zuma has signed into law the Financial Sector Regulation Act, 2017. This Act is also known as "Twin Peaks", as it establishes two new financial sector regulators, the Financial Sector Conduct Authority and the Prudential Authority with jurisdiction over all financial institutions, and to provide them with a range of supervisory tools to fulfil their objectives. The implementation of the Twin Peaks model in South Africa has two fundamental objectives of strengthening South Africa’s approach to consumer protection and market conduct in financial services; and creating a more resilient and stable financial system. According to the President “Twin Peaks” model will see the creation of a prudential regulator, which will administer risks taken on by financial firms such as banks and focus on macroprudential aspects of financial stability. It will be housed in the South African Reserve Bank (SARB). This Act aims to achieve a financial system in order to take care of financial customers interests, and supports balanced and sustainable economic growth in the Republic, by establishing, in conjunction with other financial sector laws, a regulatory and supervisory framework.

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South Africa's Retirement Funds Default Regulations To Be Effective From September 2017

The first draft of the retirement funds default regulations was published for public comment on 22 July 2015, and revised after taking into account public comments. The second draft of the regulations was published for public comment on 9 December 2016. National Treasury of South Africa on 25 August, 2017 gazetted final retirement fund default regulations that will guarantee members of retirement funds obtain good value for their savings and be able to retire comfortably. These final retirement funds default regulations which will take effect on 1 September 2017. These default regulations are the product of an extensive consultative process between National Treasury, industry, the Financial Services Board (FSB) and other interested stakeholders. As per these regulations the retirement funds’ trustee boards shall offer a default in-fund preservation arrangement to members of the trustee board who leave the services of the participating employer before retirement, and also a default investment portfolio to contributing members who do not exercise any choice regarding how their savings should be invested.

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30 August 2017
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