Legislation: Financial Sector Bill focuses on failing banks

Comment is sought by 7 November on a draft Financial Sector Regulation Amendment Bill aimed at strengthening the powers of the South African Reserve Bank to ‘manage the orderly resolution or winding down of a failing financial institution, with minimum disruption to the broader economy’, reports Pam Saxby for Legalbrief Policy Watch. Released yesterday, according to an accompanying media statement the amendments seek to ensure that depositors’ funds ‘are protected in the event of a bank failure, and … paid out speedily to protect … (the bank’s) most vulnerable customers’.

Once operational, the new piece of legislation will give effect to proposals contained in two discussion documents: ‘Strengthening SA’s resolution framework for financial institutions’ (August 2015) and ‘Designing a deposit insurance scheme for SA’ (May 2017). It will apply to all registered South African banks, including mutual and co-operative banks.