DESIGNATED INSTITUTIONS RECEIVE NEW RESOLUTION REGIME AS OF 01 JUNE 2023
With effect from 01 June 2023 a new framework for the “resolution” of “designated institutions”, has commenced in terms of the Financial Sector Regulation Act, 2017 (“FSRA”) and in terms of which the South African Reserve Bank (“SARB”) has been given a wide range of powers for the resolution of these institutions.Section 29A of the FSRA stipulates that “designated institutions” include, inter alia, a bank, a systemically important financial institution, the payment system operator and participants of a systemically important payment system, and a company that is a holding company of a bank, a systemically important financial institution, or a payment system operator of a systemically important payment system. Importantly, if a bank or a systemically important financial institution is a member of a designated “financial conglomerate”, each of the other members of the conglomerate will also be classified as a designated institution.
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