Regulatory Alerts2011-03-07
Status of Previously Issued Circulars (C1/2011)
The South African Reserve Bank’s Registrar of Banks issued Circular 1/2011 to annually confirm the ongoing effectiveness of previously published circulars and directives for banks, controlling companies, foreign branches, eligible institutions, and their auditors. The document establishes that unlisted circulars are automatically withdrawn unless explicitly retained in the annual listing, whereas directives issued under section 6(6) of the Banks Act remain legally binding until formally cancelled in writing. Institutions and auditors must retain copies of the enumerated effective circulars covering topics such as default definitions, Basel Committee reports, capital floors, and auditor rotation, and are required to return duly completed acknowledgement forms to the Office.
[Logo: South African Reserve Bank] South African Reserve Bank From the Office of the Registrar of Banks
C1/2011
2011-03-07
To: All banks, controlling companies, branches of foreign institutions and eligible institutions
Circular 1/2011 issued in terms of section 6(4) of banks act, 1990:
Status of previously issued circulars
Executive summary
In order to ensure that banks (including branches of foreign institutions), controlling companies, eligible institutions and auditors of a bank or controlling company are in no doubt as to which previously issued circulars remain effective, this Office will annually confirm their status.
Addressees should note that contrary to the process whereby the status of circulars are annually confirmed, directives issued in terms of section 6(6) of the Banks Act, 1990 (Act No. 94 of 1990 – the Banks Act), remain effective until such time that they are cancelled in writing by the Registrar of Banks (the Registrar) in terms of section 6(6)(c) of the Banks Act.
1. Introduction
All previously issued circulars are deemed to be withdrawn/terminated/replaced except if such a circular is to remain effective and is then accordingly published in Circular 1 of that year. The circulars that remain effective will retain their original numbers and dates.
2. Effective Circulars
The circulars listed below remain effective. Accordingly, banks, controlling companies, eligible institutions and auditors of a bank or controlling company are hereby requested to retain a copy of these circulars.
| Circular | Brief Details |
|---|---|
| 2.1 Banks Act Circular 2/2010 | Interpretation of definition of default as outlined in regulation 65 of the Regulations relating to Banks |
| 2.2 Banks Act Circular 3/2010 | Regulations relating to Banks and related matters |
| 2.3 Banks Act Circular 4/2010 | Basel Committee report to the G20: Comprehensive response to the international financial crisis |
| 2.4 Banks Act Circular 5/2010 | Interpretation and application of criteria relating to the granularity for retail exposures |
| 2.5 Banks Act Circular 6/2010 | Interpretation and application of criteria relating to exposures secured by residential mortgage bonds |
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3. Effective Directives
Section 6(6)(a) of the Banks Act prescribes that this Office may, after consultation with the relevant bank, controlling company, eligible institution or auditor of a bank or controlling company, issue a directive to such a bank, controlling company, eligible institution or auditor of a bank or controlling company, either individually or collectively, regarding the application of the Banks Act.
This Office issued a number of directives in terms section 6(6)(a) of the Banks Act. It is hereby confirmed that all such issued directives will remain effective until such time as they are cancelled in writing by the Registrar in terms of section 6(6)(c) of the Banks Act.
| Directive | Brief Details |
|---|---|
| 3.1 Directive 1/2008 | Use of divisional names |
| 3.2 Directive 2/2008 | Procedure to be followed in respect of applications in terms of the provisions of sections 37, 52 and/or 54 of the Banks Act, 1990 |
| 3.3 Directive 3/2008 | Appointment of directors or executive officers and completion of Form BA 020 |
| 3.4 Directive 4/2008 | Disclosure of repurchase and resale agreements and similar transactions |
| 3.5 Directive 5/2008 | Composition of board-appointed committee to approve large exposures |
| 3.6 Directive 6/2008 | Auditor rotation |
| 3.7 Directive 7/2008 | Mapping of the international scale rating symbols of Fitch Ratings and Moody's Investors Service to the prescribed risk weights available in terms of regulation 23 of the Regulations relating to banks |
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| 3.8 | Directive 8/2008 | Completion of specified items of form BA 320 for commodities and foreign exchange including gold |
| 3.9 | Directive 1/2009 | Matters related to capital floors |
| 3.10 | Directive 2/2009 | Investments and loans and advances by controlling companies: Section 50 of the Banks Act, 1990 |
| 3.11 | Directive 3/2009 | Limit in respect of effective net open foreign-currency position, and matters related to the unencumbered assets to be held by branches of foreign institutions |
4. Acknowledgement of Receipt
4.1 Two additional copies of this Banks Act circular are enclosed for the use of your institution’s independent auditors. The attached acknowledgement of receipt, duly completed and signed by both the chief executive officer of the institution and the said auditors, should be returned to this Office at the earliest convenience of the aforementioned signatories.
[Signature]
E M Kruger Registrar of Banks
The previous circular issued was Banks Act Circular 6/2010, dated 14 December 2010.