Understanding Banking 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
• Criminal activities(detection and prevention)
• Supervision

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

South Africa

Overview of Regulation

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 at the South African Reserve Bank's Cooperative Bank Supervision link.

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Banking and Credit Services

• 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] (.html)
  • Code of Conduct on Credit Extension, March 2007, The Banking Association South Africa

Retail Investment Services

• 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] (1,2MB)

Detection and prevention of unlawful activities

• 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  • Insider Trading Act, [No. 135 of 1998] - repealed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

• 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
  • Financial Markets Advisory Board (FMAB) est. 1990

United Kingdom

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