Regulatory Alerts2012-02-13
Matters Related to the Implementation of Basel III
The South African Reserve Bank issued Guidance Note G2/2012 to implement the Basel III framework in South Africa effective 1 January 2013. The directive mandates a ten-year phasing-out period for existing capital instruments that fail to meet the new entry criteria, while requiring all post-January 2013 additional Tier 1 and Tier 2 issuances to incorporate loss absorbency clauses allowing write-offs or conversions upon non-viability triggers. Furthermore, the guidance clarifies that only equity-settled share-based payment reserves and accumulated other comprehensive income will be included in regulatory capital calculations under the revised framework.
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