Finance: ‘Significant owner’ standard mooted for institutions

A consultation paper proposing a ‘standard on fit and proper person requirements for (the) significant owners of financial institutions’ was released yesterday for comment by 16 November, reports Pam Saxby for Legalbrief Policy Watch.  To be applied jointly by SA’s two financial sector regulators, once in force the proposed new standard will affect credit rating agencies, the controlling companies of banks and insurers, the managers of collective investment schemes and mutual banks. It is underpinned by sections 157(1) and 158(4) of the Financial Sector Regulation Act, which together seek to prevent any individual from controlling or influencing the business or strategy of a financial institution either alone, or in collaboration with any other ‘related or interrelated person’.

Against that backdrop, among other things the paper proposes a definition of what constitutes ‘an increase or … decrease in the extent of the ability’ of such a person to exercise imprudent levels of influence or control. The standard is expected to come into effect on 1 January 2019, with Chapter 11 of the Act (significant owners).

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