Understanding Bank Compliance

The legal and compliance framework in which Community Banks are rquired to operate is often quite intimidating. The following lists some of the key areas in which applicable legislation exists:

Banking and credit services
Insurance and related services
Investment services
Anti-money laundering & the detection and prevention of financial criminal activity
Supervision

Clearly the consequences for non-compliance can range from a slap on the wrist by the regulator, to a hefty fine, end even to a jail term, and should not be taken lightly.

Many aspects of modern banking have been harmonnised, and issues such as card association compliance are almost identical in all jurisdictions, but this is not the case with the regulatory framework imposed by national government. We will deal only with South Africa in this version of the BIGBOOK.

South Africa

Credit unions are treated differently from Banks as determined in the Co-operative Banks Act and previously governed by the Cooperatives Act. Regulations proceeding from this Act have been published and may be gotten to via the the South African Reserve Bank's Cooperative Bank Supervision link.

Overview of Financial Sector Regulation

Overview of Regulation

Overview of Regulation _{Source: Thomas Glaessner Lead Financial Economist OPD et.al.}

Banking and Credit Services

Act/Bill	Details
Banks Act, [No. 94 of 1990] as amended
Banks Amendment Act, [No. 19 of 2003]
Home Loan and Mortgage Disclosure Act, [No. 63 of 2000]
Bills of Exchange Amendment Act, [No. 56 of 2000]
Currency and Exchanges Amendment Act ,[No. 23 of 1996]
National Payment System Act, [No. 78 of 1998] as ammended
National Payment System Amendment Act, [No. 22 of 2004]
National Credit Act, [No. 34 of 2005] (now includes Usury regulation)
National Credit Act Regulations [No. 8477 31 May 2006]
Code of Conduct on Credit Extension, March 2007, The Banking Association South Africa

Retail Investment Services

Act/Bill	Details
Collective Investment Schemes Control Act, [No. 45 of 2002]
Financial Advisory and Intermediary Services Act, [No. 37 of 2002]
Determination of Fit and Proper Requirements for Financial Services Providers [Board Notice 91, 16 August 2006]

Detection and prevention of unlawful activities

Act/Bill	Details
Securities Services Act; [No 36 of 2004]
Insider Trading Act, [No. 135 of 1998] - repealed
Financial Intelligence Centre Act, [No. 38 of 2001]
Prevention of Organised Crime Act, [No. 121 of 1998]
Prevention of Organised Crime Amendment Act, [No. 24 of 1999]
Prevention and Combating of Corrupt Activities Act, [No. 12 of 2004]

Supervisory Organisations

Organisation	Relevent Legislation
South African Reserve Bank	South African Reserve Bank Act, [No.90 of 1989] South African Reserve Bank Amendment Act, [No. 2 of 1996] South African Reserve Bank Amendment Act, [No.39 of 1997] South African Reserve Bank Amendment Act, [No. 57 of 2000]
Financial Services Board	Financial Services Board Act, [No. 97 of 1990] Financial Services Board Amendment Act, [No. 12 of 2000]
The National Credit Regulator	National Credit Act, [No. 34 of 2005] National Credit Act Regulations [No. 8477 31 May 2006]
Financial exchanges (self-regulating organisations)	JSE Limited JSE (formerly the Johannesburg Stock Exchange, incorporates SAFEX) Bond Exchange of South Africa, BESA Council for Overseeing Recognised and Statutory Obudsman Schemes Financial Services Ombud Schemes Act, [No. 37 of 2004] (assented to in February 2005)
Other associated regulatory bodies	Department of Trade and Industry
Coordination of financial regulation	Policy Board for Financial Services and Regulation Bond Exchange of South Africa, BESA
Financial Markets Advisory Board (FMAB) est. 1990