Regulatory Alerts2013-05-23
Treatment of Investments in Banking, Financial, Securities, Insurance and Commercial Entities
The South African Reserve Bank’s Office of the Registrar of Banks has issued Circular C4/2013 to prescribe the capital treatment for investments in banking, financial, securities, insurance, and commercial entities. Implementing Basel III amendments effective January 2013, the circular mandates full deduction for reciprocal cross holdings and limited recognition for other investments through a clarified flow diagram applied to bank-solo and consolidated reporting forms. The regulator will continuously monitor these investments to prevent capital overstatement, reserving the right to impose restrictions, and requires institutions to return a jointly signed acknowledgement from their chief executive officer and independent auditors.
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