Regulatory Alerts2013-04-26
Transitional Arrangements for Deducting Surplus Capital of Subsidiaries Attributable to Third Parties
The South African Reserve Bank’s Office of the Registrar of Banks requires banks to phase in the deduction of surplus capital attributable to third parties from consolidated qualifying capital over a five-year period instead of applying an immediate full deduction. Financial institutions must report these capital amounts on form BA 700 and apply a graduated inclusion schedule that reduces the deductible surplus from 80 percent in 2013 to zero percent by the end of 2017. This directive implements the January 2013 Banking Regulations regarding minority interest capital treatment and establishes specific reporting line items for CET1, Tier 1, and total capital.
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