Regulatory Alerts2014-06-12
Directive 1/2014: Matters Related to Assets Lodged or Pledged to Secure Liabilities
The South African Reserve Bank exempts banks from deducting pledged assets securing repurchase agreement liabilities from their common equity tier 1 capital and reserve funds. The directive mandates strict adherence to Financial Reporting Standards for such agreements while reaffirming mandatory capital deductions for assets pledged under other laws that restrict their availability for statutory liabilities. Banks must align their accounting practices with these prudential rules and submit signed acknowledgements to the Registrar of Banks.
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