New legislation – October 2017

October 1st, 2017
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Philip Stoop BCom LLM (UP) LLD (Unisa) is an associate professor in the department of mercantile law at Unisa.

Legislation published from 3 – 30 August 2017

* Items marked with an asterisk are discussed later in the column.

Bills

Restitution of Land Rights Amendment Bill B19 of 2017.

South African National Roads Agency Limited and National Roads Amendment Bill B20 of 2017.

Administrative Adjudication of Road Traffic Offences Amendment Bill B38A of 2015.

Administrative Adjudication of Road Traffic Offences Amendment Bill B38B of 2015.

Commencement of Acts

Performing Animals Protection Amendment Act 4 of 2016. Commencement: 28 July 2017. GN772 GG41019/3-8-2017.

Promulgation of Acts

Judicial Matters Amendment Act 8 of 2017. Commencement: To be proclaimed. GN770 GG41018/2-8-2017 (also available in Afrikaans).

Protected Disclosures Amendment Act 5 of 2017. Commencement: 2 August 2017. GN768 GG41016/2-8-201 (also available in Afrikaans).

Courts of Law Amendment Act 7 of 2017. Commencement: To be proclaimed. GN769 GG41017/2-8-2017 (also available in Afrikaans).

* Financial Sector Regulation Act 9 of 2017. Commencement: To be proclaimed. GN853 GG 41060/22-8-2017 (also available in Sepedi).

Selected list of delegated legislation

Auditing Profession Act 26 of 2005

Registration of registered auditors and candidate auditors: Processes and documents required. BN146 GG41064/25-8-2017.

Compensation for Occupational Injuries and Diseases Act 130 of 1993

Increase of maximum amount of earnings on which assessment of employer shall be calculated (R 403 500 per annum with effect from 1 April 2017). GN814 GG41026/4-8-2017.

Amendment of sch 4: Manner of calculating compensation. GN816 GG41026/4-8-2017.

Increase in monthly pensions (with 6% from 1 April 2017). GN815 GG41026/4-8-2017.

Competition Act 89 of 1998

Memorandum of understanding between the Competition Commission and the Broad-Based Black Economic Empowerment Commission. GN857 GG41064/25-8-2017.

Medicines and Related Substances Act 101 of 1965

General regulations. GN859 GG41064/25-8-2017.

Mine Health and Safety Act 29 of 1996

Amendment of regulations: Machinery and equipment. GN R894 GG41065/25-8-2017.

Regulations relating to forms. GN R893 GG41065/25-8-2017.

Repeal of the Electrical Regulations. GN R895 GG41065/25-8-2017.

Repeal of the regulations relating to electrical definitions. GN R898 GG41065/25-8-2017.

Regulations relating to lifts and chairlifts. GN R896 GG41065/25-8-2017.

Minerals Act 50 of 1991

Repeal of certain definitions. GN R897 GG41065/25-8-2017.

National Education Policy Act 27 of 1996

Department of Basic Education National Policy on HIV, STIs and TB. GN777 GG41024/4-8-2017.

National Land Transport Act 5 of 2009

Regulations on colour coding and branding for minibuses and midibuses used for minibus taxi-type services. Proc R26 GG41046/18-8-2017 (also available in isiZulu).

Occupational Health and Safety Act 85 of 1993

Notice of direction in terms of the General Safety Regulations: Applications to provide first aid training must be accompanied by valid accreditation certificate. GN827 GG41037/11-8-2017.

Inclusion of noise monitoring by means of personal dosimetry in reg 7 of the Noise Induced Hearing Loss Regulations. GN R889 GG41065/25-8-2017.

Pension Funds Act 24 of 1956

Amendments to the regulations issued in terms of s 36. GN863 GG41064/25-8-2017.

Performing Animals Protection Amendment Act 4 of 2016

Performing Animals Protection Regulations, 2016. GN771 GG41019/3-8-2017 and GN776 GG41024/4-8-2017.

Public Finance Management Act 1 of 1999

Statement revenue and expenditure for 2017/2018 financial year. GenN645 GG41076/30-8-2017.

Small Claims Courts Act 61 of 1984

Establishment of a small claims court for the Petrus Steyn area. GN782 GG41024/4-8-2017.

Establishment of a small claims court for the Memel area. GN783 GG41024/4-8-2017.

Establishment of a small claims court for the area of Edenville. GN781 GG41024/4-8-2017.

Traditional Leadership and Governance Framework Act 41 of 2003

Guidelines for determination of number of members of traditional councils. GN908 GG41072/28-8-2017.

Veterinary and Para-Veterinary Professions Act 19 of 1982

Amendment of regulations relating to the veterinary and para-veterinary professions. GenN564 GG41024/4-8-2017.

Draft Bills

Draft Deeds Registries Amendment Bill. GenN589 GG41041/15-8-2017.

Draft delegated legislation

Amendment of the Civil Aviation Regulations, 2011 (sch 1 and 2) in terms of the Civil Aviation Act 13 of 2009 for comment. GN R775 GG41023/4-8-2017.

Categorisation of nuclear installations, level of financial security to be provided by licence holders and manner in which financial security is to be provided in terms of the National Nuclear Regulator Act 47 of 1999 for comment. GN R773 GG41023/4-8-2017.

Amendment of the End-user and Subscriber Service Charter Regulations in terms of the Electronic Communications Act 36 of 2005 for comment. GN822 GG41030/7-8-2017.

Exposure Draft of the Proposed Transitional Provisions for the Initial Adoption of the Standards of GRAP on Interests in Other Entities (ED 157) issued by the Accounting Standards Board for comment. BN141 GG41037/11-8-2017.

Competency standards for pharmacists in terms of the Pharmacy Act 53 of 1974 for comment. GenN590 GG41043/16-8-2017.

Additional minimum standards to be added to Annexure A of the rules relating to good pharmacy practice: Additional minimum standards in terms of the Pharmacy Act 53 of 1974 for comment. GenN591 GG41043/16-8-2017.

Proposed Waste Tyre Regulations in terms of the National Environmental Management: Waste Act 59 of 2008 for comment. GN847 GG41049/17-8-2017.

Draft amendments to the Municipal Regulations on Minimum Competency Levels, 2007 in terms of the Local Government: Municipal Finance Management Act 56 of 2003. GN838 GG41047/18-8-2017.

Amendment of reg 14(2) of the SETA Standard Constitution Regulations in terms of the Skills Development Act 97 of 1998. GN852 GG41058/22-8-2017.

Draft Intellectual Property Policy of the Republic of South Africa, Phase 1, 2017. GenN636 GG41064/25-8-2017.

Regulations relating to conduct of inquiries into alleged unprofessional conduct in terms of the Health Professions Act 56 of 1974 for comment. GN861 GG41064/25-8-2017.

Draft Amendment to regulations and draft withdrawal notice of exemptions in terms of the Financial Intelligence Centre Act 38 of 2001. GN R909 GG41077/30-8-2017.

 

Selected aspects of the Financial Sector Regulation Act 9 of 2017

Commencement

The Financial Sector Regulation Act 9 of 2017 (also available in Sepedi) was published in GN853 GG41060/22-8-2017 and will commence on dates to be proclaimed in the Government Gazette.

Purposes of the Act

The purposes of the Act set out in the long title include to –

  • establish a system of financial regulation by establishing the Prudential Authority and the Financial Sector Conduct Authority;
  • preserve and enhance financial stability;
  • regulate and supervised financial product providers and financial service providers;
  • improve market conduct in order to protect financial customers;
  • provide for coordination, cooperation collaboration and consultation between the Reserve Bank, the Prudential Authority, the Financial Sector Conduct Authority, the National Credit Regulator, the Financial Intelligence Centre and other organs of state in relation to financial stability and the functions of these entities;
  • provide for making regulatory instruments and standards;
  • make provision for licensing of financial institutions;
  • provide for powers to enforce financial sector laws and imposition of administrative penalties; and
  • to create offences.

Object of the Act

Section 7 provides that the object of the Act is to achieve a stable financial system that works in the interest of financial customers and supports balanced and sustainable economic growth by establishing in conjunction with specific financial sector laws a regulatory and supervisory framework that promotes –

  • financial stability;
  • safety and soundness of financial institutions;
  • fair treatment and protection of financial customers;
  • efficiency and integrity of the financial system;
  • prevention of financial crime;
  • financial inclusion;
  • transformation of the financial sector; and
  • confidence in the financial system.

What is a financial sector regulator and a financial sector law?

A ‘financial sector regulator’ is defined in s 1 as –

  • the Prudential Authority (established in terms of s 32 within the administration of the Reserve Bank);
  • the Financial Sector Conduct Authority (established in terms of s 56);
  • the National Credit Regulator; or
  • the Financial Intelligence Centre.

A ‘financial sector law’ is defined in s 1 as –

  • the Financial Sector Regulation Act 9 of 2017;
  • a law listed in sch 1 and regulations made in terms of it: These laws are the Pension Funds Act 24 of 1956, Friendly Societies Act 25 of 1956, Banks Act 94 of 1990, Financial Services Board Act 97 of 1990, Financial Supervision of the Road Accident Fund Act 8 of 1993, Mutual Banks Act 124 of 1993, Long-term Insurance Act 52 of 1998, Short-term Insurance Act 53 of 1998, Financial Institutions (Protection of Funds) Act 28 of 2001, Financial Advisory and Intermediary Services Act 37 of 2002, Collective Investment Schemes Control Act 45 of 2002, Co-operative Banks Act 40 of 2007, Financial Markets Act 19 of 2012 and the Credit Rating Services Act 24 of 2012; or
  • and a regulatory instrument made in terms of the Financial Sector Regulation Act 9 of 2017 or a law listed in sch 1 (listed above).

Who will be the responsible authority?

Section 5 provides that the responsible authority for a financial sector law is the financial sector regulator identified in sch 2.  However, in terms of s 77 financial sector regulators may delegate its functions and powers in relation to a financial sector law to another financial sector regulator in a memorandum of understanding.

Cooperation and collaboration between financial sector regulators and the Reserve Bank

Chapter 5 of the Act regulates cooperation and collaboration between financial sector regulators and the Reserve Bank.

Section 76 regulates cooperation and collaboration between the financial sector regulators and the Reserve Bank in terms of the financial sector laws and the National Credit Act 34 of 2005 and the Financial Intelligence Centre Act 38 of 2001. Section 76 places a duty on them to –

  • assist and support each other in pursuing their objectives in terms of the financial sector laws, the National Credit Act 34 of 2005 and the Financial Intelligence Centre Act 38 of 2001;
  • inform each other about, and share information about, matters of common interest;
  • strive to adopt consistent regulatory strategies, including addressing regulatory and supervisory challenges;
  • coordinate actions in terms of the financial sector laws, the National Credit Act and the Financial Intelligence Centre Act 38 of 2001;
  • minimise duplication of effort and expense by, among others, establishing where appropriate, common or shared databases and other facilities;
  • agree on attendance of international forums; and
  • develop consistent policy positions, among others, for the purpose of presentation and negotiation at relevant South African and international forums.

To give effect to their obligations in terms of s 76, the financial sector regulators and the Reserve Bank must as soon as practicable, but not later than six months after the date on which ch 4 of the Act comes into effect, enter into one or more memoranda of understanding.

Overview of the Act: Selected aspects

  • Financial stability

Chapter 2 of the Act regulates financial stability. The Reserve Bank is responsible for financial stability, monitoring of risks and financial stability reviews (ss 11-13). Systemic events and risks in relation to systemic events are regulated in terms of ss 14-19. The responsibilities of financial sector regulators in the event of systemic event are set out in s 17. The Financial Stability Oversight Committee is established in terms of s 20 and regulated by ss 20-24. The primary objectives of the Financial Stability Oversight Committee are to support the Reserve Bank in its functions in relation to financial stability and facilitate co-operation and collaboration between the financial sector regulators and the Reserve Bank in respect of matters relating to financial stability.

  • Prudential Authority

Chapter 3 of the Act regulates the Prudential Authority. The Prudential Authority is established in terms of s 32 (within the administration of the Reserve Bank), and its objective and functions are set out in ss 33 and 34. The objective of the Prudential Authority is to –

– promote and enhance the safety and soundness of financial institutions that provide financial products and securities services and of market infrastructures;

– protect financial customers against the risk that financial institutions may fail to meet their obligations; and

– assist in maintaining financial stability.

The governance of the Prudential Authority is regulated in terms of ss 35-49, while the staff, resources and financial management of the Prudential Authority are regulated in terms of ss 50-55.

  • Financial Sector Conduct Authority

Chapter 4 of the Act regulates the Financial Sector Conduct Authority. The Financial Sector Conduct Authority is established in terms of s 56, and its objectives and functions are set out in ss 57 and 58. The objective of the Financial Sector Conduct Authority is to –

– enhance and support the efficiency  and integrity of financial markets;

– protect financial customers by promoting fair treatment of financial customers by financial institutions and by providing financial customers and potential financial customers with financial education programs and by promoting financial literacy, and

– assist in maintaining financial stability.

The governance of the Financial Sector Conduct Authority is regulated in terms of ss 59-72, while the staff and resources of the Financial Sector Conduct Authority are regulated in terms of ss 73-75.

  • Cooperation and collaboration

Chapter 5 of the Act regulates cooperation and collaboration between financial sector regulators and the Reserve Bank (see above ‘Cooperation and collaboration between financial sector regulators and the Reserve Bank’).

  • Administrative actions

Chapter 6 of the Act regulates administrative actions.

  • Regulatory instruments

Chapter 7 of the Act regulates regulatory instruments and prudential, conduct and joint standards.

  • Licensing

Chapter 8 of the Act regulates licensing. Section 111 sets out licensing requirements for providers of financial products and financial services and market infrastructures. Section 111, among others, provides that a person may not provide a financial product or services or market infrastructure except in accordance with a licence in terms of a specific financial sector law, the National Credit Act 34 of 2005 or the National Payment System Act 78 of 1998. If no specific financial sector law provides for a licence, a person may not provide a financial product or services or market infrastructure except in accordance with a licence in terms of the Financial Sector Regulation Act 9 of 2017. Sections 112-124 sets out miscellaneous aspects in relation to licences required in terms of ss 111(1)(b) or (2) or 162. General provisions relating to all licences under the financial sector laws are set out in ss 125-128.

  • Information gathering, supervisory on-site inspections and investigations

Chapter 9 of the Act regulates information gathering, supervisory on-site inspections and investigations.

  • Enforcement

Chapter 10 of the Act regulates enforcement of the Act. Section 141-142 makes provision for guidance notices and interpretation rulings. Directives by financial sector regulators are regulated in terms of ss 143-150. Section 151 makes provision of enforceable undertakings. Chapter 13 of the Act regulates administrative penalties.

  • Financial conglomerates

Aspects related to financial conglomerates are regulated in ch 12 of the Act.

  • Ombuds

Chapter 14 of the Act regulates ombuds. The Ombud Council is regulated in terms of ss 175-193. Aspects such as the its objective, functions, governance, aspects related to board members, meetings are regulated in ch 175-193.

Section 176 provides that the objective of the Ombud Council is to assist in ensuring that financial customers have access to, and are able to use, affordable, effective, independent and fair alternative dispute resolution processes for complaints about financial institutions in relation to financial products, financial services, and services provided by market infrastructures. Sections 194-200 makes provision for the recognition of industry ombuds and ss 201-208 set out the powers of the Ombud Council. General provisions related to ombuds are contained in ss 209-217.

  • Financial Services Tribunal

Chapter 15 of the Act regulates the Financial Services Tribunal. The Tribunal is established in terms of s 219, which also sets out the functions of the Tribunal.

The members of the Tribunal, their term of office, staff and resources, duties, panels and general rules are regulated in terms of ss 220-227. Sections 228 and 229 makes provision for a right to be informed and a right to reasons for decisions. Sections 230 to 236 regulates the reconsiderations of the Tribunal’s decisions.

  • Fees, levies and finances

Chapter 16 of the Act regulates fees, levies, and the finances of sector bodies.

  • Miscellaneous aspects and the establishment of a Financial Sector Information Register

Chapter 17 of the Act regulates miscellaneous aspects. These aspects include information sharing and reporting (ss 250-255), the establishment of a Financial Sector Information Register (ss 256-264), offences and penalties (ss 265-276) and general matters (ss 277-287). Section 288 makes provisions for the publication of guidelines and regulations and ss 289-304 regulate amendments to current laws, repeals and transitional provisions. Section 256 provides that the National Treasury must establish and maintain the Financial Sector Information Register (referred to above).

The purpose of the Register is to provide reliable access to accurate, authoritative and up to date information relating to financial sector laws, regulations, regulatory instruments and their implementation.

This article was first published in De Rebus in 2017 (Oct) DR 36.

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