Government Gazette REPUBLIC OF SOUTH AFRICA Vol. 448 Cape Town 5 August 2003 No. 25294 THE PRESIDENCY No. 1115 5 August 2003 It is hereby notified that the President has assented to the following Act, which is hereby published for general information:– No. 19 of 2002: Banks Amendment Act, 2003. AIDS HELPLINE: 0800-123-22 Prevention is the cure 2 GOVERNMENT No. 25294 BANKS AMENDMENT ACT, 2003 GAZETTE,2003 5 AUGUST Act No. 19,2003 GENERAL EXPLANATORY NOTE: 1 Words in bold typeinsquarebracketsindicateomissions existing enactments. Words underlined a with solid existing enactments. line indicate insertions from in ~~ (English text signed by the President.) [Assented to 30 July 2003.) ACT To amend the Banks Act, 1990, so as to rectify gender insensitive provisions; to amend certain definitions and insert certain new definitions; to allow the Registrar to give information to banks means of a circular; to clarify certain provisions in by line with their practical application; to provide for the of a name that includes use the word “bank”; to update references legislation and institutions; to substitute to or delete obsolete provisions and references; to provide for the establishment of a compliance function and to require banks to establish and maintain an adequate process of corporate governance; make to further provision regarding the appointment of auditors by a bank; to make further provision regarding the fiduciary duty and a duty care and skill resting on directors and to extend such of duties chief to executive officers executive and officers of banksandbank controlling companies; to grant certain powers relating to the institution of action for breach of the fiduciary duties to the Registrar; to provide for the formation of certain committees and to determine their functions; to provide for new offences and the increase of penalties for existing offences; and to provide for matters connected therewith. BE IT ENACTED by the Parliament follows:- of the Republic of South Africa, as Amendment of section 1 of Act 94 of 1990, as amended by Government Notice R.1765 of 30 July 1991, section 1 of Act 42 of 1992, sections 1 and 25 of Act 9 of 1993, section 1 of Act 26 of 1994, section 1 of Act 55 of 1996 and section 1 of Act 36 of 2000 5 inition: 1. Section 1 of the Banks Act, 1990 (hereinafter referred to as the principal Act), is hereby amended(a) by the substitutionin subsection (1) for thedefinition of “close relative” of the following 10 ’’ ‘close relative’, in relation to any person, means(a) [his] 4 spouse; jb) [his] 4 child, stepchild, parent or stepparent; (c) the spouse of any of the persons mentioned in paragraph (b);“; (b) by the insertion in subsection (1) after the definition of “co-operative” of the 15 following definition: “ ‘corporate governance’, in relation to the management of a bank or a controlling company, includes all structures, processes, policies, systems and procedures whereby the bank or controlling company is governed;”; 4 No. 25294 GOVERNMENT GAZETTE. 5 AUGUST 2003 ~~ Act No. 19,2003 BANKS AMENDMENT ACT, 2003 (c) bytheinsertion in subsection (1) after thedefinition of “deposit” of the following definition: “ ‘director’ includes an executive director and non-executive director, unless expressly stated otherwise;”; (d) by the substitution in subsection (1) for the definition of “employee in charge 5 of a risk management function” of the following definition: ‘’ ‘employee in charge of a risk management function’, in relation to a bank, means that employee of the bank who is ultimately responsible for the management of one or more of the following types of risk to which the bank is exposed, namely10 (a) solvency risk; (6) liquidity risk; (c) credit risk; (dl currency risk; (e) marketrisk(positionrisk); 15 (fi interest rate risk; (g) counterparty risk; (h) technological risk; (i) operational risk; [or] ( j ) compliancerisk;or 20 - any otherrisk regarded as material by bank;”; (k) that (e) by thesubstitution in subsection (1) for the definitionof “executive officer” of the following definition: “ 6 executive officer’, in relation to any institution(a) that is not a bank, includes any manager, the compliance officer, the 25 secretary of the company and any director who also an employee is of such an institution; (h) that is abank,includesanyemployee [of the bank] whoisa director or who is in charge of a risk management function of the bank, [and] the complianceofficer, secretary of the company or any30 manager of the bank who is responsible, or reports, directly to the chief executive officer of the bank;”; (f) bythesubstitution in subsection (1) forparagraph (f) of the definition of “liquid assets” of the following paragraph: “ fsecurities issuedbyvirtue of section 66 of the PublicFinance 35 C) Management Act, 1999 (Act No. 1 of 1999), to fund the National Government;”; (g) by the insertion in subsection (1) after the definition of “Regulations relating to Banks’ Financial Instrument Trading”of the following definition: ‘‘ u d 40 ‘Conditions for conducting business of bank by foreign institution by means of branch in Republic’ published by Government Notice No. R. 1414 of 28 December 2000;”; (hi by the substitution in subsection (1) for paragraph (c) of the definition of “the 45 business of a bank” of the following paragraph: “(c)the utilization of money, or of the interest or other income earned on money, accepted by way of deposit as contemplated in paragraph (a1- person’s own name or through the medium of a trust or a 50 nominee, of loans to other persons; (ii) for investment by any person, acting as investor in [his] & person’s own name or through the medium of a trust or a nominee; or 55 (iii) for the financing, wholly or to any material extent, by any person of any other business activity conducted by [him] & person in his m o w n name or through the medium a trust of or a nominee;”; (9 for the granting by any person, acting as lender in [his] & 6 No. 25294 GOVERNMENT GAZETTE, BANKS AMENDMENT ACT, 2003 2003 5 AUGUST Act No. 19,2003 (i) (j) (k) (I) (m) (n) by the substitution in subsection (1) for the words preceding subparagraph (i) of the proviso to item (aa) of the definition of “the business of a bank” of the following words: ‘.the acceptance of a deposit by a person whodoes not [hold himself out as accepting] purport to accept deposits on a regular basis and who has not advertised for or solicited such deposit: Provided that-”; by the substitution in subsection (1) for subparagraph (ii) of the proviso to item (aa) of the definition of “the business of a bank” of the following subparagraph: “(ii) a person and any person controlled directly or indirectly by [him] the first-mentioned person (whether such control is through shareholding or otherwise) or managed by [him] such firstmentioned person, and a subsidiaryof such last-mentioned person, who accepts deposits as contemplated in this paragraph shall for the purposes of subparagraph (i) of this proviso be deemed to be one person;”; by the substitution in subsection (1A) for subparagraphs (i) and (ii) of paragraph (a) of the following subparagraphs, respectively: “(i) [His] The general probity of that person; (ii) [his] thecompetence and soundness of judgment of that person for the fulfilment of the responsibilities of the office in question; and”; by the substitution subsection in (1A) for subparagraphs (iv) and(v) of paragraph ( b ) of the following subparagraphs, respectively: “(iv) had taken part in any business practices that, in the opinionof the Registrar, were deceitful, prejudicial or otherwise improper (whether unlawful or not) or which otherwise brought discredit on [his] that person’s methods of conducting business; or (v) had taken part in or been associated with any such other business practices as would, or had otherwise conducted himself or herself in such a way as to, cast doubt on his or her competence and soundness of judgement.”; by thesubstitutioninsubsection (1A) for paragraph (c) of thefollowing paragraph: “(c) The Registrar shall be entitled, atany time, torequest any person to complete a questionnaire that is designed to enable, and such person shall provide the Registrar with such information may be necessary to as enable, the Registrar to form an opinion, contemplated this as in subsection, regarding the qualities of that person.”; and by thesubstitution in subsection (1A) for paragraph (d) of the following paragraph: “ ( d ) [If the Registrar has under paragraph (e) addressed a request to aperson who is to appointed as a director or an executive officer be of a bank or a controlling company and such person has refused or failed to comply with such request, the provisions of section 60(5)(b) shall mutatis mutandis apply to the appointment of that person as such a director or such an executive officer] Any person who refuses or fails to comply with a request addressed to that person by the Registrar under paragraph ( c ) shall be guilty of an offence.”. 5 10 15 20 25 30 35 40 45 Amendment of section 5 of Act 94 of 1990 2. Section 5 of the principal Act ishereby amended by the substitution for subsection 50 (2) of the following subsection: “ ( 2 )Any delegation under subsection(l)(a) shall not prevent the exercise of the relevant power by the Registrar [himself] personally.”. Amendment of section 6 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 55 and section 3 of Act 26 of 1994 3. Section 6 of the principal Act is hereby amendedi n ) bv the substitution for subsection (1 1 of the followin2 subsection: c 8 No. 25294 GOVERNMENT GAZETTE.2003 5 AUGUST Act No. 19,2003 BANKS AMENDMENT ACT. 2003 “(1) In addition to the powers and duties conferred or imposed upon him or her by this Act, theRegistrar shall, for the purposes of the performance of his or her functions under this Act, have powers and duties in all respects corresponding to the powers and duties conferred or imposed by the Inspection of Financial Institutions Act, [1984 (Act No. 5 38 of 1984)] 1998 (Act No. 80 of 1998), upon a registrar contemplatedin the last-mentioned Act.”; ( b ) by the substitution for subsection (2) of the following subsection: “ ( 2 )Any reference in this Act to an inspection or investigation made under this section shall be construed asa reference to an inspection made 10 in accordance with the provisions of the Inspection of Financial Institutions Act, [1984] 1998.”; and (c) by the substitution for subsection (4) of the following subsection: “(4) The Registrar may from time to time by means of a circular furnish banks with guide-lines regarding the application and interpreta- 15 tion of the provisions of this Act or providebanks with any other information.”. Amendment of section 7 of Act 94 of 1990, as amended by sections 3 and 25 of Act 9 of 1993 and section 3 of Act 36 of 2000 4. Section 7 of the principal Act is hereby amended20 (a) by the substitutioninsubsection (1) for paragraph ( a ) of thefollowing paragraph: “ ( a ) direct a bankor a controlling company or a subsidiary of a bank or controlling company to furnish the Registrar, at such time or times or at such intervalsor in respect of such period or periods as may be 25 specified in the notice, with such information asmay be specified in the notice and as theRegistrar may reasonablyrequire for the performance of his functions under this Act; or”; and ( 6 ) by the insertion after subsection (1) of the following subsection: ‘*(1A) The report required by the Registrar under paragraph ( 6 ) shall 30 be drawn up at the expense of the bank, controlling company or subsidiary in question.”. Amendment of section 8 of Act 94 of 1990 5. Section 8 of the principal Actis hereby amended by the substitution for subsection 35 (2) of the following subsection: “(2) The Registrar may, after consideration of an applicationreferred to in subsection (1)(a) grant the application and extend by such period as he orshemay determine the period within which the return,statement, report or otherdocument or 40 information had to be submitted or furnished; or (b) refuse the application, and shall in writing notify the person who lodged the application of [his] the Registrar’s decision.”. Amendment of section 9 of Act 94 of 1990, as substituted by section 4 of Act 36 of 45 2000 6. Section 9 of the principal Act is hereby amended( a ) by the substitution in subsection (2) for paragraph ( a ) of the following paragraph: “ ( a ) one shall be appointed on account of his knowledge of law 50 and shall be the [chairman] chairperson;”; (i7) by the substitution for subsection (2A) of the following subsection: “(2A) In any review under subsection (I), the board of review is, subject to theprovisions of subsection (8), confined to establishing whether or not,inthe taking of the relevant decision,theRegistrar 55 exercised his discretion properly and in good faith.”; ( c ) by the substitution for subsection (4) of the following subsection: 10 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT ACT, 2003 Act No. 19,2003 (d) (e) cf) (g) (h) (i) (j) (k) (4) If before or during any review under subsection (1) it transpires that any member of the board of review has anydirect or indirect personal interest inthe outcome of that review, such member shall recuse himself or herself and [he] such member shall be replaced by a person temporarily appointed, subject to the provisions of subsection ( 2 ) ,by the 5 Minister for the purposes of the review.”; by the substitution for subsection (4A) of the following subsection: “(4A) If before or during any review under subsectionI ) , it transpires ( that any member of the board of review will, due toillness, absence from the Republic or for any other bonajide reason be unableto participate or 10 continue to participate in thatreview, [he] such member shall be replaced by a person temporarily appointed, subject to the provisions of subsection (2), by the Minister for the purposes of the review.”; by the substitution for subsection ( 5 ) of the following subsection: “(5) A member of the boardof review shall hold office for a periodof 15 three years and shall on the expiration of [his] such member’s term of office be eligible for reappointment.”: by the substitution for subsection (6) of the following subsection: “(6)Any casual vacancy that occurs on the board of review shall be filled by the appointment by the Minister, subject to the provisions of 20 subsection ( 2 ) , of another member, and any person so appointed shall hold office for the unexpired portion of the period of office of [his] the predecessor of such member.”; by the substitution insubsection (8) forparagraph ( a ) of the following 25 paragraph: “ ( a ) summon any person who, in its opinion,maybeable to give material information for the purposes of thereview orwhoit believes has in his possession or custody or under his control any document which has any bearing upon the decision under review, to appear before it at a time and placespecified in the 30 summons, to be interrogatedor to produce that document, retain and for examination any document so produced;”; by the substitution insubsection (8) forparagraph (c) of thefollowing paragraph: “(c)call any person present at the review proceedings as a witness and 35 interrogate [him] suchperson and require [him] suchperson to produce any document in his or her possession or custody or under his or her control,and such aperson shall be entitled to legal representation at his or her own expense.”; 40 by the substitution for subsection (9) of the following subsection: “(9) Subject to the provisions of subsection (2A), the procedure at the relriew shall be determined by the [chairman] chairperson of the board of review.”; by the substitution for subsection (13) of the following subsection: ’‘(13) If the board of review sets aside any decision by the Registrar, 45 the prescribed fees paid by the applicant in respect of the review in question shall be refunded to [him] the applicant, and if the board of review varies any such decision, it may in its discretion direct that the whole or any part of such fees be refunded to the applicant.”; and 50 by the substitution for subsection (14) of the following subsection: ’ ( 4A member of the board of review shall in respect of his .1) services as suchmember a be paid such remuneration, including reimbursement for transport,travellingandsubsistence expensesincurred by him in the performanceof his functions as such a 55 member, as the Minister may from time to time determine.”. “ e - e * Amendment of section 10 of Act 94 of 1990 7. Section 10 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: 12 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 Act No. 19,2003 BANKS AMENDMENT ACT, 2003 “(1) The Registrar shall annually submit to the Minister a report on his or her activities in terms of this Act during the year under review.”. Amendment of section 12 of Act 94of 1990, as amended by sections 5 and 25 of Act 9 of 1993 8. Section 12 of the principal Act is hereby amendedS (aj by the substitution for subsection (2) of the following subsection: “(2) An application under subsection (1)( a ) shall be made in the [prescribed] manner and on the [mescribedl form prescribed in the Regulations relating to Banks; and (bj shallbeaccompanied by a statementcontainingthe [prescribed] 10 information prescribed in the Regulations relatingto Banks. ’’ ; and (b) by the substitution in subsection (3) for the words preceding paragraph ( a ) of the following words: “The Registrar may require an applicant contemplated in subsection (1) him to furnish with-”. 15 Amendment of section 13 of Act 94 of 1990, as amended by sections 6 and 25 of Act 9 of 1993 9. Section 13 of the principal Act is hereby amended( a ) by the substitution for subsection (1) of the following subsection: “(1) Subject to the provisions of subsection (2), the Registrar may, 20 after considering all information, documents and reports furnished to him & r for the purposes of an application under section 12, grant or refuse the relevant application or grant the application subject to such conditions as he or shemay determine.”; (b) by the substitution in subsection (2) for the words preceding paragraph ( a ) of 25 the following words: “The Registrar shall not grant an application made under section 12 unless he or she is satisfied-”; and (c) by the substitution for subsection (3) of the following subsection: “(3) When the Registrar grants or refuses an application made under 30 section 12, he orshe shall give written notice of that fact to the applicant concerned.”. Amendment of section 14 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 6 of Act 26 of 1994 10. Section 14 of the principal Act is hereby amended35 (a) bythesubstitution in subsection (1) for paragraph (b) of thefollowing paragraph: ‘.(b)success has not been achieved within aperiod of [six] 12 months as from the date of the granting of the said authorization, with the formation, accordance in with the proposals contained in the 40 application for the said authorization, of the proposed bank.”; and (0) by the substitution for subsection (2) of the following subsection: “(2) When the Registrar revokes an authorization in terms of subsection (l),he orshe shall givewritten notice of that fact to the person to whom the authorization was granted.”. 45 Amendment of section 15 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 7 of ,4ct 26 of 1994 11. Section 15 of theprincipalAct is herebyamendedby the substitutionfor subsection (2) of the following subsection: .‘(2)The Registrar shall grant the approval referredto insubsection (1) only if he SO - of the opinion that the company concernedprobably, having regard or she is will to the provisions of section 17, be eligible for registration as a bank in terms of this Act.”. 14 No. 25294 GOVERNMENT GAZETTE, BANKS AMENDMENT ACT. 2003 5 AUGUST 2003 Act No. 19,2003 Amendment of section 16 of Act 94 of 1990, as substituted by section 8 of Act 26 of 1994 12. Section 16 of the principal Act is hereby amended( a ) by thesubstitutioninsubsection (2) for paragraph (a) of thefollowing paragraph: 5 “ ( a )be made in the [prescribedl manner and on the [prescribed] form prescribed in the Regulations relating to Banks; and”; (bj by the substitution in subsection (2)(b)(ii)for item (dd) of the followinrr item: “(dd) the full names and the addresses of the [chairman] chairpkrson, the other directors and the executive officers of the institution; 10 and” ; (c) by the substitution for subsection (3) of the following subsection: “(3) The Registrar require may an applicant contemplated in subsection (1) to furnishhimwith such information or documents, in addition to information and documents furnished by the applicant in 15 terms of subsection (2), as the Registrar may deem necessary.”; and (dl by the substitution for subsection (4) of the following subsection: “(4) The application and every document lodged in terms of subsection (2) or (3) shall be signed by the [chairman] chairperson or the chief executive officer of the institution.”. 20 Amendment of section 17 of Act 94 of 1990, as substituted by section 9 of Act 26 of 1994 13. Section 17 of the principal Act is hereby amended( a ) by the substitution in subsection (1)for the words preceding paragraph (a) of 25 the following words: “Subject to the provisions of subsection (2), the Registrar shall, after considering all information documents and furnished to him in terms of section 16 for the purposes of an application under that section, grant such application if he or she is satisfied-”; ( b ) by the substitution in subsection (2) for the words preceding paragraph (a) of 30 the following words: “Notwithstanding the provisions of subsection (l), the Registrar may refuse an application for the registration of an institution as a bank if he or she of the opinion-”; - is 35 (c) by the substitution for subsection (3) of the following subsection: “(3) When the Registrar in terms of this section grants or refuses an application for registration, he &shall give writtennotice of that fact to the applicant concerned.”; and (d) by the substitution for subsection (4) of the following subsection: “(4) If the Registrar in terms of this section grants an application for 40 registration he shall,subject to the provisions of section 18: and on payment by the applicant the prescribed registration fee, provisionally of register the institution concernedas a bank and issue to the institution,on the prescribed form, a certificate of registration as a bank.”. 14. Section 18 of the principalAct is herebyamendedby the substitution for subsection (2) of the following subsection: “(2) In addition to any other condition which the Registrar may impose under subsection (1) he orshemay impose a condition requiring the institution concerned 50 to take within a specified period such steps in terms of the Companies Act as may be necessary to alter its memorandum of association or articles of association in accordance with the requirements of the Registrar.”. 16 GOVERNMENT No.GAZETTE. 25294 2003 5 AUGUST Act No. 19,2003 BANKS AMENDMENT ACT. 2003 A4mendment section 18A of Act 94 of 1990, as insertedby section 11 of Act 26 of of 1994 15. Section 1 SA of the principal Act is hereby amended(a) by the substitution in subsection (2) for the words preceding paragraph (a) of the following “To obtain the authorization of the Registrar as contemplated in subsection (l),the foreign institution concerned shall in the [prescribed] manner and on the [prescribed] form prescribedin the Regulations lodge with the Registrar a written application which be shall by-”; (b) by the substitution in subsection (3) for the words preceding paragraph (a) of the following words: “The Registrar may require the foreign institution applying in terms of subsection (2) to furnish him with-”; (c) by the substitution for subsection (4) of the following subsection: “(4) When the Registrar grants or refuses an application in terms of subsection (2) for authorization to conduct the business of a bank by means of abranchintheRepublic, he shall give written notice of that fact to the applicant concerned.”; (dj by the substitution for subsection (5) of the following subsection: “(5) The Registrar shallnot grant an application interms of subsection (2) unless he orsheis satisfied that proper supervision contemplated in as subsection (3)(h)is or will be exercised by the responsible supervisory authority of the foreign institution’s country of domicile.”; and (e) by the substitution for subsection (6) of the following subsection: “(6) If the Registrar grants an application referred to in subsection (4) he or she shall on the prescribed form issue to the foreign institution concerned a certificate of authorization to conduct the business of a bank by means of a branch in the Republic.”. words: 5 accompanied 10 15 20 25 Amendment of section 18B of Act 94 of 1990, as inserted by section 11 of Act 26 of 30 1994 16. Section 18B of the principal Act is hereby amended(a) by the substitutioninsubsection (2) forparagraph (a) of thefollowing paragraph: “ ( a )inform the foreign institution of his or her intention to cancel or 35 suspend, as the case may be, such authorization;”; and ( b ) by the substitution for subsection (3) of the following subsection: “(3) After considering any representations received within the specified period from the foreign institution concerned by virtue of the provisions of subsection (2)(c), the Registrar in may his or her 40 discretion(a) proceed with the cancellation or suspension in terms of subsection (1) of the authorization; or (bj refrain from taking any further steps in terms of subsection (I). and the Registrarshall in writing informthe foreign institution concerned 45 of his decision in terms of this subsection.” e Amendment of section 22 of Act 94of 1990, as amended sections 7 and 25 of Act by 9 of 1993, section 15 of Act 24 of 1994 and section 5 of Act 36 of 2000 17. Section 22 of the principal Act is hereby amended( a ) by the substitution for subsection (1) of the following subsection: 50 ”( 1) Subject to the provisions of subsection ( 2 ) ,an institution which is registered as a bank or a foreign institution which is authorized under section 18A to conduct the business of a bank by means a branch in the of Republic or an institution which is registered as a representative office of a foreim institution under section 34 shall not55 18 GOVERNMENT No.GAZETTE, 25294 2003 5 AUGUST Act No. 19,2003 BANKS AMENDMENT ACT, 2003 ( a ) in the case of such bank use, or refer toitself by, a name other than the name under which it is so registered; or ( b ) in the case of such foreigninstitution, in respect of thebranch concerned use, or refer to the branch by, a name other thanthe name under which the conduct of the business of a bank in the Republic was so authorized, or any literal translation or abbreviation of such name which has been approved by the Registrar: Provided that the Registrar may, if he or she deems it desirable, authorize the use of a name by which such bank or foreign institution is otherwise generally known.”; ( b ) by the insertion after subsection ( 2 ) of the following subsection: “(2A) A bank may, with the prior written coisent of the Registrar, in conjunction with its registered name, and subject to such conditions as the Registrar may determine, use or refer to a name of a division, brand or product of that bank, which name includes the word ‘bank’ or any derivative thereof.”; ( c ) by the substitution for subsection (4) of the following subsection: “(4) Any person who, in connection with any business conducted by [him] such person( a ) uses[, or refers to himself by,] any name, description or symbol indicating, or calculated to leadpersons to infer, that [he] __ such person is a bank registered as such under this Act; or ( b ) in any other manner [holds himselfout] purports to bea bank registered as such under this Act, while [he] such person is not so registered as a bank, shallbe guilty of an offence.”; and (d) by thesubstitutioninsubsection ( 5 ) for paragraph (a) of the following paragraph: “(a)the business in question is a bank or a foreign institution which is authorised under section 18A to conduct the business of a bank bv means of a branch in the Republicor aninstitution thatis registereb as a representative office of a foreign institution under section 34; or”. 5 10 15 20 25 30 Amendment of section 24 of Act 94 of 1990, as amended by section 25 of Act 9 of 35 1993 and section17 of Act 26 of 1994 18. Section 24 of the principal Act is hereby amended( a ) by the substitution in subsection (1) forthe words preceding paragraph ( a ) and for paragraph (a) of the following words and paragraph, respectively: “The Registrar shall, before cancelling or suspending under section 23 the registration of a bank, in a written notice addressed to the [chairman] 40 chairperson or chief executive officer of the institution concemed(a) inform the institution of hisintention to cancel or suspend, as the case may be, such registration;”; and (b) by the substitution for subsection (2) of the following subsection: “(2) After considering any representations received within the 45 specified period from the institution concerned by virtue of the provisions of subsection (l)(c), the Registrar may in his or her discretion( a ) proceed with the cancellation or suspension, in terms of section 23, 50 of the registration; or (b) refrain from taking any further steps in terms of section 23, and the Registrar shall in writing inform the [chairman] chairperson 01 chief executive officer of the institution concernedof his & decision in terms of this subsection.”. ~ ~~ 20 No. 25294 GOVERNMENTGAZETTE, 2003 5 AUGUST BANKS AMENDMENT ACT, 2003 Act No. 19,2003 Amendment of section 25 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 18 of Act 26 of 1994 19. Section 25 of theprincipalAct is hereby amendedby the substitution for subsection (2) of the following subsection“(2) A competent court for the purposes of subsection (1) shall be any [provincial or local] division of the [Supreme] Court of South Africa within the area of jurisdiction of which the registered office, referred to in section 170 of the Companies Act, of the bank concerned is situated.”. w 5 Substitution of section 27 of Act 94 of 1990, as substituted by section 20 of Act 26of 1994 10 20. The following section is hereby substituted for section 27 of the principal Act: “Cancellation of registration at request of bank 27. The Registrar shall cancel the registration of a bank upon submission to him or her by the institution concerned of a special resolution contemplated in section 200 of the Companies authorizing Act such 15 cancellation.”. Substitution of section 28 of Act 94 of 1990, as substituted by section 21 of Act 26 of 1994 21. The following section is hereby substituted for section 28 of the principal Act: “Cancellation of registration upon winding-up 28. Whenthe affairs of a bank havebeencompletelywound up as contemplated in section 419(1) of the Companies Act, the responsible Master of the [Supreme] Court shall transmit to the Registrar a copy of the certificate referred to in that section, and the Registrar shall upon receipt of such copy cancel the registration of thebankconcerned.”.25 20 w Amendment of section 30 of Act 94 of 1990, as substituted by section 8 of Act 9 of 1993 and amended by section 23 of Act 26 of 1994 22. Section 30 of theprincipal Act is hereby amended bythe substitutionfor paragraphs (b) and (cj of the following paragraphs, respectively: “(bjof every consent to the establishment in the Republic a representative office 30 of of a foreign institution which has been granted by [him] in terms of [sections] section 34; and (c) of every authorization to conduct the business of a bank by means of a branch in the Republic which has been granted by [him] institution35 under section 18A.”. Amendment of section 32 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 25 of Act 26 of 1994 23. Section 32 of theprincipal Act is hereby amendedby the substitutionfor subsection (2) of the following subsection: *‘(2) Different directions and periods may under subsection (1) be determined in 40 respect of different kinds of deposits: Provided that in determining such directions and periods no preference shall be given to any such member of the public which [he] such person does not in law enjoy.”. Amendment of section 31 of Act 91 of 1990, as amended by section 25 of Act 9 of 1993, section 27 of Act 26 of 1994 and section 2 of Act 55 of 1996 45 24. Section 34 of the principal Act is hereby amended( a ) by the substitution for subsection (2Aj of the following subsection: 22 GOVERNMENT No. 25294 GAZElTE, 2003 5 AUGUST ~~ Act No. 19,2003 BANKS AMENDMENT ACT, 2003 “(2A) Aforeign institution applying in terms of subsection (2) maybe required by the Registrar to furnish him or her with such information and documents as he or shemaydeemnecessary,overandaboveany information and documents which have been furnished by such foreign institution by virtue of that subsection.”; 5 ( 6 ) by the substitution in subsection (2B) for thewords preceding paragraph a )of ( the following words: “After having considered all information and documents furnished to [him] theRegistrarforthepurposes of anapplication interms of subsection (2), the Registrar may grant the application, either uncondi10 tionally or subject to such conditions as he or she may determine, if Registrar is satisfied that-”; (c) by the substitution for subsection (5) of the following subsection: “ ( 5 ) Representative offices established in accordance the with provisions of this section shall furnish the Registrar, at such time or times 15 or at such intervals or in respect of such period or periods and in such form as may be prescribed, with such prescribed information as [he] the Registrar may require reasonably for purposes the performanceof his of or her functions under this Act.”; and (d) by the addition of the following subsection: 20 “(6) Representative offices established in accordance with this section shall conduct their business subject to such conditions may as be prescribed.”. Amendment of section 37 of Act 94 of 1990, as amended by section 4 of Act 42 of 1992, section 25 of Act 9 of 1993 and section 30 of Act 26 of 1994 25 25. Section 37 of the principal Act is hereby amended( a ) by thesubstitution in subsection (1) forparagraph (c) of thefollowing paragraph: “(c) of which the total nominal value together with the total nominal value of such shares already held by such person and by [his] the 30 associate or associates of such person,”; (bj by the substitution for subsection (2) of the following subsection: “(2) (a) If, subject to the provisions of paragraph (c)( 9 any person has for a period of 12 months or such shorter period as 35 theRegistrar may deem fit held so manysharesinabankor controlling company as [he] such person may in accordance with the provisionsof subsection (1) hold therein, [he] such person may, if the Registrar has granted permission in writing thereto, acquire more than 15 percent, but not exceeding24 percent,of those shares 40 as contemplated in the said subsection; of such shorter period (ii) the said person has for a period 12 months or as the Registrar may deem fit held 24 percent of those shares as so contemplated [he] such person may, if the Registrar has granted permission in writing thereto, acquire more than 24 percent, but not exceeding 49 percent, of those shares as contemplated in the said 45 subsection (1); of (iii) the said person has for a period12 months or such shorter period as the Minister may deem fit held 49 percent of those shares as contemplated in the said subsection(1) [he] such person may,if the Minister has, through the Registrar, granted permission thereto in 50 writing, acquire more than percent, but not exceeding percent, 49 74 of those shares as contemplated in the said subsection; and of (iv) the said person has for a period12 months or such shorter period as the Minister may deem fit held 74 percent of those shares as contemplated in the said subsection [he] such person may,if the 55 (1) Minister has, through the Registrar, granted permission thereto in writing, acquire more than 74 percent of those shares as contemdated in the said subsection. (b) [Permission in terms of paragraph (a) shall only be granted on application on the prescribed form and after consultation with the 60 24 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT PICT. 2003 Act No. 19,2003 Competition Board establishedby section 3 of the Maintenance and Promotion of Competition 1979 Act, (Act No. 96 of 1979).] In considering granting permission in terms of paragraph ( a ) the Registrar or the Minister. as the case may be, may consult with the Competition Commission established in telms of the Competition Act, 1998 (Act No. 89 of 1998). (c) Notwithstanding the provisions of paragraph (a), the Registrar or the Minister, as the case may be, may, if in a particular case [he] Registrar or the Minister, as the case may be, deems it fit to do so, grant permission for the acquisitionof shares as contemplated in subparagraph (i), (ii), (iii) or (iv) of paragraph (a) without the applicantforsuch permission having held shares for the period 12 months or any shorter of period as required in any of the said subparagraphs.”; ( e ) by the substitution for subsection (3) of the following subsection: “(3) If any person at the commencement of the Deposit-taking Institutions Amendment Act, 1992, already holds more than 15 per cent of theshares in abank or controllingcompany as contemplatedin subsection (l), [he] such person may not acquire more of those shares as contemplated in the said subsection before[he] such person has obtained the appropriate permission in terms of subsection (2).”; and (d) by the substitution for subsection ( 5 ) of the following subsection: “ ( 5 ) If, in the case of a shareholding contemplated inla) subsection 2(a)(i) and (ii), the Registrar; or ih) subsection (2)(a)(iii) and (iv), the Minister, is of the opinion that the retention of such shareholding in a bank or controlling company by a particular shareholder will be to the detriment of the bank or controlling company concerned, [he] the Registrar or the Minister, as the case may be, may by way of application on notice of motion apply to the division of the [Supreme] H ~ Court in whose area $ J of jurisdiction the head office of the bank or Controlling company is situated, for an ordercompelling such shareholder to reduce, within a period determined by the court, [his] the shareholding of that person in that bank or controlling companyto a shareholding, as contemplated in subsection (l), with a total nominal value of not more than 15 per cent of thetotal nominal value of all theissuedshares of thatbank or controlling company; and limiting, with immediate effect, the voting rights that may be exercised by such shareholder by virtue of [his] shareholding of that person to 15 per cent of the voting rights attached to all the issued shares of the bank or controlling company concerned.”. Amendment of section 38 of Act 94 of 1990, as amended by section 17 of Act 85 of 1992 and section 25 of Act 9 of 1993 5 10 1s 20 25 30 3s 40 26. Section 38 of the principal Act is herebyamended by thesubstitution for paragraph ( e ) of subsection (2) of the following paragraph: 45 “(e)for a period of not more than six months, in the name of a stock-broker or of a company establishedby [him] such stock-broker for a purpose mentioned in section 17(3j of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), or of a company controlled by the bank or of an employee of the bank, if it is necessary thatthe shares be so allotted,issued or registered in order to so facilitate delivery to the purchaser or to protect the rights of the beneficiary in respect of those shares or where the beneficiary is not known;”. 26 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 Act No. 19,2003 BANKS AMENDMENT ACT, 2003 Amendment of section 39 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 31 of Act 26 of 1994 27. Section 39 of the principal Act is hereby amended by the substitution for the words preceding paragraph ( b ) of the following words: “Any person desiring shares in a bank or controlling company to be allotted or issued to [him] such person or tobe registered in[his] & name of such person, or in whose name such shares are registered, and any person acting on behalf of such a person, shall at the written request of the bank or controlling company furnish it with-”. 5 Amendment of section 41 of Act 94 of 1990, as amended by section 25 of Act 9 of 10 1993 28. Section41 of the principalAct is herebyamended by thesubstitution for subsection (1) of the following subsection: “(1) No person shall( a ) either personally or by proxy granted to any other person, cast a vote attached 15 to; or (b) receive a dividend payable on, any share in a bank or controlling company allottedor issued to [him] such person or registered in[his] the name of such person in contravention a provision of this of Act.”. 20 Amendment of section 42 of Act 94 of 1990, as amended by section 5 of Act 42 of 1992, section 25 of Act 9 of 1993 and section 33 of Act 26 of 1994 29. Section42 of theprincipal Act is herebyamended by thesubstitution for subsection (2) of the following subsection: “(2) For the purpose of this Act a personshall be deemedto exercise control over 25 a bank if, in the case where that person company, the bank is a subsidiary of that is a company, or, whether or not that person is a company, if that person [by himself] alone -or together with his or her associates(a) holds shares in the bank of which the total nominal value represents more than 50 percent of the nominal valueof a11the issued shares the bank, unless, due of 30 to limitations on the voting rights attached to the shares so held by the person [by himself] alone or together with his associates, as the case may be, such person voting [on his own] independently or such person and his associatesvoting as a group, is or areunable to decisivelyinfluencethe outcome of voting theat a general meeting of the bank; 35 (bj is entitled to exercise more than 50 percent of the voting rights in respect of the issued shares of that bank, or (c) is entitled or has the power determine the appointmentof the majority of the to directors of that bank, including(i) the power to appoint or remove, without the concurrence of any other 40 person, all or the majority of such directors; or (ii) the power to prevent any person from being appointed a director without his consent, and if a person’s appointment as a directorthe bank follows of necessarily from his - appointmentas a director the person first-mentioned this subsection, or her of in the 45 first-mentioned appointment shallfor the purposes of this subsection be deemed to be an appointment by virtue of a power of a person so first-mentioned.”. a e e Amendment of section 43 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 34 of Act 26 of 1994 30. Section 43 of theprincipal Act is herebyamendedbythesubstitutionfor50 subsection (1) of the following subsection: “( 1) A public compmy( a ) which desires to exercise control over any bank; or 28 No. 25294 GOVERNMENT GAZETTE. 5 AUGUST 2003 Act No. 19,2003 BANKS AMENDMENT ACT, 1003 (b) which is a controlling company.as defined in section 1 of the Companies Act. in respect of any other public company which has applied terms of section in 16 for registration as a bank. may apply to the Registraron the [prescribed] form prescribed in the Regulations relating to Banks for registration as a controlling company in respect of that bank or proposed bank, as the case may be.”. 5 Amendment of section 44 of Act 94 of 1990, as amended by section 10 of Act 9 of 1993 31. Section 44 of the principal Act is hereby amended(a) by the substitution for subsection (1) of the following subsection: 10 “(1) Subject to the provisions of subsection (2), the Registrar may, after considering all information, documents and particulars furnished in terms of section 43 forthe purposes of an application underthat section, grant or refuse the relevant application or grant the application subject to such conditions as he may impose.”; 15 (6) by the substitution in subsection (2) for the words preceding paragraph (a) of the following words: “The Registrar shall not grant an application made under section 43 unless he &is satisfied-”; (c) by the substitution for subsection (3) of the following subsection: 20 “(3) When the Registrar in terms of this section grants or refuses an application for registration a controlling company, he as orsheshall give written notice of that fact to the applicant concerned.”; (d) by thesubstitution in subsection (4) forparagraph (a) of thefollowing paragraph: 25 “(a)If the Registrarin telms of this section grants an application 0’ he -shall, upon complianceby the applicant with the conditions subject she to which the application was granted and on payment of the prescribed registration register applicant fee, the concerned as a controlling company in respect of the bank concerned and on the prescribed form 30 issue the to applicant a certificate of registration as a controlling company in respect of the bank concerned.”; ( e ) by the substitution in subsection (5) for the words preceding paragraph (a) of the following words: “In addition to any other condition which the Registrar may impose 35 under subsection (l),he or she may impose a condition requiring an applicant which applied for registration a controlling company in the as circumstances referred to in section43(l)(a)--”; and If) by thesubstitution in subsection (6) forparagraph ( a ) of thefollowing 40 paragraph: “ ( a )Whenever the Registrar has imposed a condition referred to in subsection (5)(6),he or she may, after consultation with the applicant concerned, designateperson a to investigate, independently of the applicant, andto advise the Registrar on, the reasonableness and fairness of the basis and conditions on which the applicant intends to make the 45 share offer in compliance with the condition.”. e Substitution of section 47 of Act 94 of 1990 32. The following section is hereby substituted for section 47 of the principal Act: “Cancellation of registration at request of controlling company 47. The Registrar shall cancel the registration of a controlling company 50 upon submission to him or her by the controlling company of a special resolution contemplated in section 200 of the Companies A4ctauthorizing such cancellation.”. 30 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 Act No. 19,2003 BANKS AMENDMENT ACT, 2003 Amendment of section 50 of Act 94 of 1990 33. Section 50 of the principal Act is hereby amended by the substitution for the words following upon paragraph (b) of the following words: “shall manage its transactions in such investments in such a way that the amount of such investments does not at any time exceed 40 per cent of the sum of [its] share capital and reserve funds of the controlling company and any bank under its control, calculated on a consolidated basis in the manner prescribed.”. Amendment of section 51 of Act 94 of 1990, as amended by sections 11 and 25 of Act 9 of 1993 34. Section 5 1 of the principal Act is hereby amended by the deletion of subsection 10 (3). Amendment of section 52 of Act 94 of 1990, as amended by section 3 of Act 55 of 1996 35. Section 52 of the principal Act is hereby amended(a) by the substitution in subsection (1) for paragraph (a) of the following 15 paragraph: “ ( a ) establish a subsidiary or create a division in the manner prescribed within O i outside the Republic or enter into an agreement having the effect that any company becomes its subsidiary or such division within or outside the Republic;”; and 20 (b) by the substitution for subsection (3) of the following subsection: “(3) The Registrar may require an applicant contemplated in subsection (2) to furnish him with suchinformation,inaddition to particulars furnished by the applicant in terms of that subsection, as the Registrar may deem necessary.”. 25 Amendment of section 54 of Act 94 of 1990, as substituted by section 6 of Act 42 of 1992 and amended by sections 12 and 25 of Act 9 of 1993, Proclamation No. 132 of 1994, section 36 of Act 26 of 1994 and section 5 of Act 55 of 1996 36. Section 54 of the principal Act is hereby amended(a) by the substitution in subsection (2) for thewords preceding paragraph ( a ) and paragraph (a) of the following words and paragraph: “The Minister shall not grant his consent referred to insubsection (1) unless(a) he or she is satisfied that the transaction in question will not be detrimental to the public interest;”; (b) by the substitution for subsection (7) of the following subsection: “(7) Upon registration of a by bank the Registrar terms in of subsection ( 6 ) , he or she shall issue a certificate of registration to the bank concerned.”; (c) by the substitution for subsection (8) of the following subsection: “(8) The Registrar of Companies, every Master of the [Supreme] Court and every officer or person in charge of a deeds registry or any other office, if, in [his] the office of such Registrar, Master, officer or person or any register under[his] the control of such Registrar, Master, officer or person there(a) is registered any title to property belonging to, or any bond or other right in favour of, or any appointment of or by; (aA)is registered any share, stock, debenture or other marketable security in favour of; or (b) been has issued any licence to or in favour 50 of, any bank which has amalgamated withany other bank or any bank which has transferred all or part of its assets and liabilities to any other bank or person, shall, if satisfied(i) that theMinisterhasconsented in terms of subsection (1) to the amalgamation or transfer; and 55 (ii) that such amalgamation or transfer has been duly effected, 30 5 a 35 40 45 32 KO.25294 GOVERNMENT GAZETTE. 2003 5 AUGUST BANKS AMENDMENT ACT, 2003 Act No. 19,2003 and upon production to [him] such Registrar, Master, officer or person of any relevant deed,bond,share,stock,debenture,certificate,letter of appointment, licence or other document, make such endorsements thereon and effect such alterations in [his] the registers of such Registrar, Master, officer or person as may be necessaryto record the transfer of the 5 relevant property, bond or other right, share, stock, debenture, marketable security, letter of appointment or licence and of any rights thereunder to the amalgamated bank or, as the case may be, to the bank or person that has taken transfer of the said assets and liabilities.”; and (d) by the substitution in subsection (1I)(c) for the words preceding subparagraph 10 (ii) of the following words: “neither the Securities Regulation Panel established by section 440B of the Companies Act nor its executive committee or its executive director shall furnish any clearance, decision or ruling in respect of a matter submitted to it or [him] such executive director in terms of the provisions 15 of the above-mentioned Code or Rules, and which matter relates to an affected transaction, as defined in section 440A( 1) of the CompaniesAct involving-”. Amendment of section 56 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 20 37. Section 56 of the principal Act is hereby amended( a ) by the substitution in subsection (3) for the words preceding paragraph (a) of the following words: “The Registrar shall not grant any application referred to in subsection (2) if he or she is of the opinion-”; and 25 (b) bythe substitution in subsection (5) for paragraph (bj of thefollowing paragraph: “(bj in the case of a special resolution relating to a change of name, change the name of the bank concerned in [his] the register of banks, and issue to the bank concerned a certificate of such change 30 of name.”. Amendment of section 57 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 38. Section 57 of theprincipalAct is hereby amendedbythesubstitution for subsection (3) ofsubsection: the following 35 “(3) If a bank refuses or fails to alter its memorandum of association or articles of association in accordance with a direction of the Registrar under subsection ( l ) , the Registrar may submit a copy of that direction to the Registrar of Companies, who thereupon shall deal with the proposed alteration contained therein in accordance with the Companies Act as if it were contained in a special resolution 40 adopted by the bank concerned and submitted to [him] the Registrar of Companies by that bank in accordance with that Act.”. Amendment of section 59ofAct 94 of 1990, as amended bysections 13 and 25 ofAct 9 of 1993 and section 38 of Act 26 of 1994 39. Section 59 of the principal Act is hereby amended45 ( a ) by thesubstitution in subsection (2) for paragraph (b) of thefollowing paragraph: ‘.(bj the number and class of shares registered in [his] - name of the the shareholder;”; and (0) by the substitution in the proviso to subsection (2) for the words preceding 50 item (aa) of paragraph (ii) of the following words: ”thatthename of a shareholder and the particularsreferred to in paragraphs ( a ) to ( e ) , inclusive, shall, subject to subsection ( 3 ) , not be included in such a list if the total nominal value of the shares registered in [his] - name of the shar-eholder-”. the 55 ~ 34 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT ACT, 2003 Act Na. 19,2003 Amendment ofsection 60 of Act 94 of 1990,as substituted by section 1 of Act 81 of 1991 and amended by section 25 of Act 9 of 1993 and section 39 of Act 26 of 1994 40. Section 60 of the principal Act is hereby amended( a,) bv the substitution for subsection (1) of the following subsection: , ~, “(1) Each director, chief executive officer and executive officer of a 5 bank [or controlling company shall stand in a fiduciary relationship] owes a fiduciary duty and a duty of care and skill to the bank [or controlling company, as the case may be,] of which [he] such a person is a director, chief executive officer or executive officer.”; 10 (b) by the insertion of the following subsections after subsection (1): “( 1A) Each director, chief executive officer and executiveofficer of a bank owes a duty towards the bank t o ( a ) act bona fide for the benefit of the bank: (bj avoid conflict between the bank’s interests and the interests of such a director, chief executive officer or executive officer, as the 15 case may be; ( c ) possess and maintain the knowledge and skill that may reasonably be expected of a person holding a similar appointment and carrying out similar functions as are carried out by the director, chief executive officer or executive officer of that bank; and 20 (d) exercise such care in the carrying out of his or her functions in relation to that bank as may reasonably be expected of a diligent personwhoholdsthe same appointment under similarcircumstances, and who possesses both the knowledge and skill mentioned in paragraph (c) and any such additional knowledge and skill as the 25 director, chief executive officer or executive officer in question may have. (1B) (a) The Registrar may institute action in terms of section 424 of the Companies against Act any director, chief executive officer or executive officer of a bankwho was knowingly a party to the carrying on 30 of the business of the bank in the manner envisaged in that section. (b}Notwithstanding anything to the contrary in any law, any amount recoveredas a result of proceedingsinstitutedby the Registrar as envisaged in paragraph (a),shall be utilized(i) first to reimburse all expenses reasonably incurred by the Registrar 35 in bringing such proceedings; (ii) thereafter to set off against any amount paid to depositors by the Registrar, a deposit insurance scheme, any governmentalbody, as or part or full compensation for the losses suffered by depositors as a result of the bank being unable to repay their deposits; and 40 (iii) thereafter for the pro rata repayment of the losses of depositors.”. (c) by the substitution for subsection (2) of the following subsection: .‘(2) Withoutderogating from the [generality of the expression ‘fiduciary relationship’ in subsection (1). the rwovisions of that subsection imply thata director-] provisions of-subsections (1) and 45 (lA), a director, chief executive officer or executive officer of a bank shall, in the performance of his or her functions in respect of that bank, observe such guidelines and comply with such requirements as may be prescribed under section 90(1)(b). [(a) shall, in relation to the bank orcontrolling company of which he 50 is a director, act honestly and in good faith and, in particular, shall exercise such powers as he may have to manage or represent the bank or controlling company, exclusively in the best interests and for the benefit of the bank and its depositors or the controlling company, as the case may be; and of 55 v a n ; 36 No. 25294 GOVERNMENT GAZETTE. 5 AUGUST 2003 BANKS AMENDMENT ACT, 2003 .4ct No. 19,2003 (b) shall, in the performance of his functions as director of such bank or controlling company, observe such guide-lines and complywith such requirements asmaybe prescribed under section 90(l)(b).]”; (d) by the substitution for subsection (5) of the following subsection: “ ( 5 ) ( a ) ci, Every bank [and every controlling company shall, at least 30 days prior to the appointment of a new director (whether for 5 the purpose of the filling of a casual vacancy or in any other circumstances) to its board of directors becoming effective, in writing furnish the Registrar with the prescribed information in respect of the proposed new director] shall give the Registrar written notice of the nomination of any person for appointment as a nonexecutive member of its board of directors by furnishing the Registrar with the prescribed information in respect of the nominee. (ii) The notice shall reach the Registrar at least 30 days prior to the proposed date of appointment. (iii) The Registrar may object to the proposed appointment by means of a written notice, stating the grounds for the objection, given to the chairperson of the board of directors of the bank and to the nominee, within 20 days of receipt of the notice referred to in subparagraph (ii). (iv) If the Registrar objects to the proposed appointment as envisaged in subparagraph (iii), the bank shall not appoint the nominee and any purported appointment shall have no legal effect: Provided that the bank or nominee may dispute the Registrar’sobjection, in which case the provisions of subsection ( 6 ) ( d ) to ( k ) , inclusive,shall apply mutatis mutandis. (b) (i) [No appointment of a new director to the board of directors of anybank or controlling company, as contemplated in paragraph (a), shall have legal force for the purpose of this Act or any other law unless the prescribed information in respect of such director has been furnished to the Registrar in accordance with the Drovisions of paragraph (a)] Every bankshall give theRegistrar writtei notice of the appointment of a chief executive officer, executive director or executive officer by furnishing the Registrar with the prescribed information in respect of the appointee. (ii)The Registrar may object to theappointment by means of a written notice, stating the groundsfor the objection, given to the chief executive officer, or acting chief executive officer of the bank, and to the appointee, within 20 working days of receipt of the notice referred to in subparagraph (i). (iii) If the Registrar objects to the appointment in terms of subparagraph (ii), the appointment shall be terminated within working days of 14 receipt of the Registrar’s notice of objection by the bank: Provided that the bank or appointee may dispute the Registrar’s objection, in which case theprovisions of subsection ( 6 ) ( d ) to (kj, inclusive, shall apply mutatis mutandis. (iv) Notwithstanding anything to the contrary in any law or in any agreement,theappointment by abank of a chief executive officer, executive director or executive officer shall be subject to the resolutive condition that theappointment is not terminated undersubparagraph (iii).”; ( e ) by theaddition to subsection ( 5 ) of the following paragraph: “ ( c )For the purpose of this subsection ‘every bank’ means the chief executive officer, or in the casewhere it concerns the appointmentof the chief executive officer, such member of the board of directors as may be designated by the board of directors.”; and (f) by the substitution for subsection (6) of the following subsections: 10 15 20 25 30 35 40 45 50 55 38 NO. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT ACT. 2003 Act No. 19,2003 “ ( 6 )( a ) [The provisions of subsection (5) shall not be construed as rendering the appointment of a director referred to in that of the Registrar.] Without subsection subject to the approval derogating from any law, the appointment of a chief executive officer, executive director or executive officer of a bank may be terminated by the Registrar if the chief executive officer, executive director or executive officer concerned is not, or is no longer, a fit and proper person to hold that appointment, or if it is not in the public interest that such chief executive officer, executive director or executive officer continues to hold such appointment. (bj If the Registrar wishes to terminate the appointment of a chief executive officer, executive director or executive officer of a bank, as envisagedinparagraph (a), theRegistrarshallnotifythefollowing parties inwriting of his or her intention and of thegrounds for the proposed termination: (i) The chief executive officer, executive director or executive officer concerned; (ii) The chairperson of the board of directors of that bank (except if the chairperson of the board is the person whose appointment the Registrar wishes to terminate, in which case each director of the bank concerned shall be notified); and (iii) The chief executive officer of that bank, (except if the chief executive officer is the person whose appointment the Re,‘ olstrar wishes to terminate, inwhich case the deputy chief executive officer shall be notified). (c) The written notice referred to in paragraph ( b ) shall notify such parties that they areentitled to submit written representations to the Registrar in response to that notice. (d) Any affected party who wishes to respond to theRegistrar’s written notice shall submit written representations in response to that notice to the Registrar within14 working days of receipt of the Registrar’s notice, or within such longer period as the Registrar may, upon written application by the affected party concerned, allow. (e) The Registrar shall, within 14 working days of receipt of a written representation referred to in paragraph (dl(i) consider the representation; (ii) decide whether or not the appointment of the chief executiveofficer, executive director or executive officer concerned should be terminated for the reasons contemplated in paragraph (a);and (iii) give notice to the affected parties referred to in paragraph (b)of his or her decision in writing. (f) If, after having considered any written representation in respect of the chief executive officer, executive director or executive officer concerned, the Registrar remains of the that view such officer’s appointmentshouldbeterminated, or if no written representation is submitted to the Registrarwithin the period allowed under paragraph (d), the Registrarshall refer the matter the Arbitration Foundation South to of Africa or its successor-in-law, or any other body designatedbythe Registrar by means of a notice in the Gazette (hereinafter referred to as the “Arbitrator”)for arbitration in terms of expedited procedures, approved by the Registrar in writing and published in the Gazette. (g) The Registrar shall make the request for arbitration referred to in paragraph Cfj(i) in writing: and (ii)withinthreeworking days after theexpiry of the 14 day period referred to in paragraph (e) or, if the affected parties do not submit any written representations to the Registrar within the period 5 10 15 20 25 30 35 40 45 50 55 40 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT ACT. 2003 Act No. 19,2003 allowed under paragraph (d), within three working days after the expiry of that period. ( 1 2 ) The Arbitrator shall determine whether or not adequate reasons exist forthe termination, by the Registrar, of the appointmentof the chief executive officer, executive director or executive officer concerned. 5 (i) If under paragraph ( h ) the Arbitrator decides that adequate reasons exist for the termination, the Arbitrator shall confirm the termination of the appointment in writing addressed to theRegistrar and thechief executive officer, executive director or executive officer concerned, whereupon the termination shall immediately take effect. 10 (j) If the Arbitrator determines that adequate reasons do not exist for the termination, the Arbitrator shall reject the termination by written notice to theRegistrarand to the chief executive officer, executive director or executive officer concerned, whereupon the appointment of the person in question shall continue with full force and effect. 15 ( k )A termination interms of this section shall not be subject to review in terms of section 9. (7) This section, where applicable, shall apply mutatis mutandis in respect of any branch or a controlling company.”. Insertion of sections 60A and 60B in Act 94 of 1990 41. The following sections are hereby inserted in the principal Act after section 60: “Compliance function 20 60A. (1) Notwithstanding anything to the contrary in any law, a bank shall establish an independent compliance function as part of the risk management framework of the bank.25 (2) The compliance function shall be headed by a compliance officer of the bank, who shall perform his or her functions with such care and skill as can reasonably be expected from a person responsible for such a function in a similar institution. (3) The appointed compliance officer shall perform his or her functions 30 subject to such requirements and conditions as may be prescribed in the Regulations relating to Banks. Corporate governance 60B. (1) Notwithstanding anything to the contrary in any law, the board of directors and executiveofficers of a bank shall establish and maintain an adequate and effective process of corporate governance, which shall be consistent with the nature, complexity and risks inherent in the activities and the business of the bank concerned. ( 3 ) The process of corporate governance shall be established with the objective of achieving the bank’s strategic and business objectives efficiently, effectively, ethically and equitably (within acceptable risk parameters), to ensurecompliance with the strategic framework and guidelines established for the bank or controlling company; commitmentbytheexecutive officers of the bank or controlling company to adhere to corporate behaviour that is universally recognised and accepted as correct and proper; a balance of interests of the shareholders and other interested persons who may be affected by the conduct of directors or executive officers of the bank or controlling company within a framework of effective accountability; 35 40 45 50 42 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 Act No. 19,2003 BANKS AMENDMENT ACT, 2003 to (dl that mechanisms and procedures are established and maintained minimize or avoid potential conflictsof interests between the business interests of the bank or controlling company and the personal interests of directors or executive officers of the bank or controlling company; responsible conduct by the directors and executive officers of the bank 5 or controlling company; the achievement of the maximum level of efficiency and profitability of the bank within an acceptable riskprofile for the bank controlling or company; the timely, accurateandmeaningfuldisclosure of mattersthatare 10 material to the business of the bank or controlling company or the interests of the shareholders of or other persons having an interest in the bank or controlling company; that the board of directorsretainscontrol overthe strategicand business direction of the bankor controlling company, whilst enabling 15 its executives to manage the bank’s or controlling company’s operations and the achievement of the agreed strategic and business objectives; and (i) compliance with all applicable laws and regulations. (3) A bank shall establish maintain and the process of corporate 20 governance in accordance with any requirements that may be prescribed in the Regulations relating to Banks.”. Amendment of section 61 of Act 94of 1990, as amended bysections 14 and 25 of Act 9 of 1993 42. Section 61 of the principal Act is hereby amended25 (a) by the substitution for subsection (1) of the following subsection: “( 1) Notwithstanding the provisionsof Chapter X of the Companies Act( a ) no person shall hold office as auditor of a bank or a controlling company unless [his] appointment of such person as such an auditor has been approved by the Registrar; and 30 (b) [a bank of which the total assets as at the close of its last preceding financial year exceeded R10000 000000 shall appoint not less than of each other] any person two auditors who independent are contemplated in paragraph (a) shall be appointed for such period and on 35 such conditions as may be prescribed.”; ( b ) by the substitution for subsection (2) of the following subsection: “(2) A bank or a controlling company within shall 30 days of the appointment in accordance with the provisions of Chapter X of the Companies Act of a person as auditor thereof, apply to the Registrar on the prescribed 40 form for [his] the Registrar’s approval of such appointment.”; (c) by the substitution for subsection (3) of the following subsection: “(3) The Registrar may[, without being required to furnish any reason therefor](a) refuse an application under subsection (2) for [his] the Registrar’s 45 approval of the appointment of an auditor if- the application seeks the re-appointment of an auditor who has (i) already served as auditor of the bank in question forthe prescribed number of years consecutively; or (ii) any grounds for withdrawal of approval listed in paragraph (b)(i) to 50 (iv) apply to the proposed appointee; or (b) withdraw any approval of the appointment of an auditorpreviously granted by the Registrar under this section, if such an auditor(i) has been convicted of an offence of which dishonesty is an element; (ii) is found to be incompetent or unfit to perform the functions of an 55 auditor; (iii) is under investigationby the PublicAccountants’andAuditors’ Board: or 44 No. 25294 GOVERNMENT GAZETTE. 5 AUGUST 2003 BANKS AMENDMENT ACT, 2003 Act No. 19,2003 (iv) fails to disclose any direct or indirect interests whichmay constitute a conflict of interest in respect of such auditor’s duties, and thereupon the functions and responsibilities of that auditor in respect of that bank [concerned] shall [vacate his office] cease forthwith.”; by the substitution for subsection (4) of the following subsection: 5 “(4) If the Registrar under paragraph f a ) of subsection (3) refuses an application for his e r approval of the appointment of an auditor or under paragraph ( b )of that subsection withdraws an approval previously granted by him or her, the board of directors of the bank or the controllin,- company 7 concernedshallappointanotherpersonas auditor and the provisions of 10 subsections (1) and (2) shall apply mutatis mutandis in respect of the last-mentioned appointment.”; and by the addition of the following subsection: “(6) A person appointed under subsection (4) to replace an auditor whose approval has been withdrawn under subsection (3)(bj shall be appointed for 15 the remainder of the period forwhich the person whom he orshe replaceswas appointed and is subject to the same conditions as his or her predecessor.”. Amendment of section 63 of Act 94 of 1990, as amended by section 7 of Act 42 of 1992, sections 15 and 25 of Act 9 of 1993 and section 40 of Act 26 of 1994 20 43. Section 63 of the principal Act is hereby amended(a) by the substitution for subsection (1) of the following subsection: “(1) Notwithstanding anything to thecontrary contained in the Public Accountants’ and Auditors’ Act, 1991(Act No. 80 of19911, orthe Companies Act,but subject to the provisionsof subsections ( )and (3)of 2 25 this section, the auditor referred to in section 61 or 62(a) shall,whenever [he] suchauditorfurnishes, in terms of section 20(5)(b/ of the first-mentioned Act, the Public Accountants’ and Auditors’Board with copies of the report,acknowledgement of receipt and reply and with the other particulars referred to in that section, relating to an irregularity or suspected irregularity in the 30 conduct of the affairs of the bank for which [he] such auditor has been appointed as auditor, also furnish the Registrarwith such copies and particulars; and ( b ) shall in writing inform the Registrar of any matter relating to the 35 affairs of a bank(i) of which such auditor became aware in the performance of [his] such auditor’s functions as auditor of that bank: and (ii) which, in the opinionof such auditor, may endanger the bank’s ability to continue as agoingconcern or may impairthe protection of the funds of the bank‘s depositors or may be 40 contrary to principles of sound management (including risk management) or amounts to inadequate maintenance of internal controls; and (c) shall, if requested by the Registrar to do furnish him_her with so, or _ written information relatingto a matter referredto in paragraph (b), 45 specified by the Registrar.”; (hj by the substitution for subsection (2) of the following subsection: “ ( 2 ) Whenever an auditor by virtue of the provisions of subsection ( l ) ( b )or ( c ) furnishes the Registrar with written information, [he] auditor may at the same time furnish the chief executive oEcer of the 50 bank to whichsuchinformationrelateswitha copy of the relevant document.”; and (c] by the substitution for subsection (4) of the following subsection: “(4) Nothing in subsection (1) contained shall be construed as conferring upon any person any right of action against an auditor which, 55 but for theprovisions of that subsection, [he] such person would not have had.”. 46 GOVERNMENT No. GAZETTE, 25294 2003 5 AUGUST Act No. 19,2003 BANKS AMENDMENT ACT, 2003 Amendment of section 64 of Act 94 of 1990, as amendedby section 25 of Act 9 of 1993, section 41 of Act 26 of 1994 and section8 of Act 36 of 2000 44. Section 64 of the principal Act is hereby amended( a ) by the addition to subsection (2) of the following paragraph: “ ( d ) perform such further functions as may be prescribed.”; and 5 (b) by the substitution for subsection (3) of the following subsection: “ ( 3 ) All of the members of theauditcommittee may be,andthe majority of such members, including the [chairman] chairperson of the audit committee,shall be, persons who are not employees bank nor of the of any of its subsidiaries, its controlling company or any subsidiary of its 10 controlling company: Provided that the [chairman] chairperson of the board of directors of the bank shall not be appointed as a member of the audit committee.”. Insertion of sections 64A and 64B in Act of 1990 94 45. The following sections are hereby inserted in the principal Act after section 64: 15 “Risk committee 64A. (1) The boardof directors of a bank shall appoint least three of its at members, of whom at least two are non-executive directors, to form a risk committee. (2) The functions of the risk committee shall beto20 ( a ) assist the board in its evaluation of the adequacy and efficiencyof the risk policies, procedures, practices and controls applied within that bank in the day-to-day management of its business; (b) assist the board in the identification of the build up of and concentration of the various risks to which the bank is exposed; 25 (c) assist the board in developing a risk mitigation strategy to ensure that the bank manages the risks in an optimal manner; (d) assist the board in ensuring a formal risk assessment undertaken that is at least annually; (e) assist the board in identifying and regularly monitoring all key risks 30 and key performance indicators to ensure that its decision-making capability and accuracy of its reporting is maintained at a high level; (j) facilitate andpromotecommunication,throughreportingstructures, regarding the matters referred to in paragraph( a ) or any other related matter, between the board and the executive officers of the bank; 35 ( 8 ) ensure the establishment an independent risk management function, of and in the case where the bank forms part of a group, a group risk management function, the head of which shall act as the reference point for all aspects relating to risk management within the bank, including the responsibility to arrange training of members of the 40 board in the different risk areas to which that bankis exposed; ( h ) introduce such measures as may serve to enhance the adequacy and efficiency of the risk management policies, procedures, practicesand controls applied within that bank; (i) co-ordinate the monitoring of risk management on a globalised basis: 45 and 0) perform such further functions as may be prescribed. 48 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT ACT. 2003 Act No. 19,2003 Directors’ affairs committee 64B. (1) The board of directors of a bank shall establish a directors’ affairs committee, consisting only of non-executive directors of the bank. 12) The functions of the directors’ affairs committee shall be toassist the board of directors in its determination and evaluation of the 5 adequacy, efficiency and appropriateness of the corporate governance structure and practices of the bank; establish and maintain aboarddirectorshipcontinuityprogramme entailing(i) a review of the performance of and planning for successors to the 10 executive directors; (ii) measures to ensure continuity of non-executive directors; (iii)a regular review of thecomposition of skills,experience and other qualities required for the effectiveness of the board; and (iv) an annual assessment of the board as a whole and of the 15 contribution of each individual director; assist the board in the nominationof successors to the key positions in the bank in order to ensure that a management succession plan is in place; assisttheboard in determiningwhethertheemployment of any 20 director should be terminated; assist the board in ensuring that the bank is at all times in compliance with all applicable laws, regulations codes and of conduct and practices; and (f ,) perform such further functions as may be prescribed.”. 25 Amendment of section 68 of Act 94 of 1990, as amended by sections 16 and25 of Act 9 of 1993, section 42 of Act 26 of 1994 and section 9of Act 36 of 2000 46. Section 68 of the principal Act is hereby amended( a ) by the substitutioninsubsection (1) for paragraph (c) of thefollowing paragraph: “(c) the Master shall appoint a person designated bythe Registrar, who shall be a person who in the opinion of the Registrar has wide experience of, and is knowledgeableaboutthelatestdevelopmentsin, the banking industry, to assist a provisional liquidator or liquidator referred to in paragraph (b) in the performance of [his] functions of such provisional liquidator or liquidator in respect of the bank in question.”; and ( b ) by the substitutioninsubsection(3) for paragraph (a) of the following paragraph: “ ( a ) of section 346 of the Companies Act, subsection (4) of that section shall be deemed to have been amended to read as follows: ‘(4) (a) Before an application for thewinding-up of a company which is a bank is presented to the Court, a copy of the application and of every affidavit confirming the facts stated therein shall be lodged with the Registrar of Banks and with the Master, or if there is no Master at the seat of the Court, with an officer in the public service designated for that purpose by the Master by notice [ofl the Gazette. ( b )The Registrar of Banks or the Master or any such officer may report to the court any facts ascertained by [him] such Registrar, Master or officer which appear to [him] such Regiswar, Master or officer to justify the Court in postponing the hearing or dismissing the application, and shall transmit a copy of that report to the applicant or [his] the agent of such applicant and to the said company.’; and”. 30 35 40 45 SO 50 No. 25294 GOVERNMENT GAZETTE, 2003 5 AUGUST Act No. 19,2003 BANKS AMENDMENT ACT, 2003 Amendment of section 69 of Act 94 of 1990, as amended by section 8 of Act 42 of 1992, sections 17 and 25 of Act 9 of 1993, section 43 of Act 26 of 1994, section 6 of Act 55 of 1996 and section 10 of Act 36 of 2000 47. Section 69 of the principal Act is hereby amended( a ) by substitution subsection the in (1) for paragraph (a) of following the 5 paragraph: “ ( a i If, in the opinion of the Registrar, any bank will be unable to repay,whenlegallyobliged to do SO, depositsmadewithit or will probably be unable meet any other its obligations, the Minister may, to of if he or she deems it desirable in the public interest, with the written 10 consent of the chief executive officer or the [chairman] chairperson of the board of directors of that bank, appoint a curator to the bank.”; (b) by thesubstitutioninsubsection (1) forparagraph (c) ofthefollowing paragraph: “ ( c )The person appointed in terms of paragraph (b)shall in respect of 15 theservicesrenderedby [him] that personpursuant to hisorher appointment be paid such remuneration out of the funds of the bank under curatorshipas the Registrar may after consultation with the curator determine.”; (ci by thesubstitutioninsubsection (2) forparagraph (b) of thefollowing 20 paragraph: “(b)directions in regard to the security which the curator has furnish to for proper the performance of his duties;”; (d) by the substitution for subsection (2D) of the following subsection: “(2D) If at any time the curator is of the opinion that there is no 25 reasonableprobabilitythatthecontinuation of thecuratorshipwill enable the bank to pay its debts or meet its obligations and become a successful concern, [he] the curator shall forthwith in writing inform the Registrar of such opinion.”; (e) by the substitution subsection for (2E) of the following subsection: 30 “(2E) Any money of the bank that becomes available to the curator shall be applied by him or herin paying the costs of the curatorship and in the conductof the bank’s business accordance with the requirements in of the curatorship and, far as the circumstances permit,in the payment as of the claims of creditors arose which before date the of the 35 curatorship.”; (fl by the substitution in subsection (3) for the words preceding paragraph (a) of the following words: “The Minister in may, the letter of appointment or at time any subsequent thereto, empower the curator in his or her discretion, but 40 subject to any condition which the Minister may impose-”; (8) by the substitution for paragraphs (a), (b),(c) and (d) of subsection (3) of the following paragraphs, respectively: “ ( a ) tosuspendorreduce, as fromthedate of [his] thecurator’s appointment as [curator] oranysubsequentdate,therightof 45 creditors of the bank concerned to claim or receive interest on any money owing to them bythat bank; jb) to make payments, whether in respect of capital or interest, to any creditor or creditors of the bank concerned at such time, in such order and in such manner as [he] the curator may deem fit; 50 (c) to cancel any agreement between the bank concerned and any other party to advance moneys due after the date of [his] the curator’s appointment as [curator] &, or to cancelanyagreementto extend any existing facility, if, in the opinion of the curator, such advance or any loan under such facility would not be adequately 55 securedorwould not be repayable on termssatisfactory to the curator or if the bank lacks necessary the funds meet to its obligations under any such agreement orif it would not otherwise be in the interests of the bank; ( d ~to convene from time to time, in such manner as [he] the curator 60 may deem fit, a meetingof creditors of the bank concerned for the purpose establishing nature extent of the and of the bank’s 52 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT ACT, 2003 Act No. 19,2003 indebtedness tosuch creditors and for consultation with such creditors in so far as their interests may be affected by decisions taken by the curator in the course of the management of the affairs of the bank concerned;”; ( h ) by the substitution subsection in (3) for paragraph rf) of thefollowing paragraph: ‘‘V) to make and carry out, the in course of [his] the curator’s management of the bank concerned, any decision which in terms of the provisionsof the Companies Act would been requiredto be have made by way of a special resolution contemplated in section199 of the said Act;”; (i) by the substitution for subsection (3A) of the following subsection: “(3A) The curator shall duly record the nature of and the reasons for each act performed by [him] the curator underany power conferred upon [him] the curator in terms of subsection (3), and such records shall be examined as part of the normal audit performed in respect of the affairs of the bank concerned.”. ( j ) by the substitution for subsection (4) of the following subsection: ‘.(4) The Minister may, at any time and in any manner, amend the directions in the letterof appointment, and the powers granted by [him] the Minister under subsection (3) to the curator.”; and ( k ) by the substitution for subsection (7) of the following subsection: “(7) The Registrarshall as soonas is practicableannounce the appointment of a curator and the powers grantedto [him] the curator on [his] the appointment of the curator, and any amendment or withdrawal of such powers, by notice in the Gazette.”. 5 10 15 20 25 Amendment of section 69A of Act 94 of 1990, as inserted by section 44 of Act 26 of 1994 and amended by section 11 of Act 36 of 2000 48. Section 69A of the principal Act is hereby amended30 ( a ) by the substitution for subsection (2) of the following subsection: “ ( 2 )The Registrar may appoint a person as an assistant or two or more persons as assistants to the commissioner referred to in subsection (1) in order to assist the commissioner, subject to [his] control and directions of the Registrar, in an investigation contemplated in subsection (l).”; (b) by the substitution for subsection (3) of the following subsection: “(3) Before Registrar the appoints a commissioner in terms of subsection (1) or a person or persons in terms of subsection (2), [he] the Registrar shall take all reasonablesteps to ensure that the person or persons [he appoints] so appointed will be able to report objectively and impartially on the affairs of the bankconcerned or theassociate or associates of such bank.”; ( c ) by the substitution for subsection (4) of the following subsection: “(4) A commissioner appointed under subsection (1) and any person or persons appointed under subsection (2) shall for the purpose of their functions in terms of this section have powers and duties in all respects corresponding to the powers and duties conferred imposed by [section or 4(1), (2), (3), (4) and (6)] sections 4 and 5 of the Inspection of Financial Institutions Act, [1984 (Act No. 38 of 1984-hereinafter in this section referred to as the Inspection Act)] 1998 (Act No. 80 of 1998), upon a registrar or an inspector contemplated in the Inspection of Financial Institutions Act, 1998: Provided that for the purposes of this sectionany reference to an ‘institution’ or a ‘financial institution’ in [section] sections 4 and 5 of the [Inspection Act] Inspection of Financial lnstitutions Act, 1998, shall be deemed to be a reference to a bank under curatorship or any of its associates: and any reference to ’the registrar’ and ‘an inspector’ in [section] sections 4 of the [Inspection Act] Inspection of Financial InstitutionsAct, 1998, shall be deemed to be areference to the commissioner and any person appointed under subsection (2), respectively.”: 35 40 45 50 55 60 54 GOVERNMENT No. GAZETTE, 25294 BANKS AMENDMENT ACT, 2003 2003 5 AUGUST Act No. 19,2003 (d) by the substitution for subsection ( 5 ) of the following subsection: “(5) When an investigation is made under this section and section 4 of the Inspection of Financial Institutions Act, 1998 (Act No. 80 of 1998), applies, subsection (l)(a) of that section shall be deemed to have been amended to read as follows: 5 ‘(1) In carrying out an investigation into the business,trade, dealings, affairs or assets and liabilities of a bank under curatorship, a commissioner may(a) administer an oath or affirmation or otherwise exanline any person who is, or formerly was, a director, servant, employee, 10 partner, member or shareholder of the institution: Provided that the person examined, whether under oath or not, may have his or her legal adviser present at the examination: Provided further that on good cause shown the commissioner may direct that theproceedings under thisparagraph shall be held in 15 camera and not be accessible to the public;’ ”; ( e ) by the insertion of the following subsection after subsection (5): “(5A) When aninvestigation is made under section and section 5 this of the Inspection of FinancialInstitutionsAct, 1998 (Act No. 80 of 1998), applies subsection (l)(a) of that section shall be deemed to have been amended to read as follows: “(1) In carrying out an investigation into the business, trade, dealings, affairs or assets and liabilities of a bank under curatorship, a commissioner may(a) administer an oath or affirmation or otherwise examine any person, if the commissioner has reason to believe that such a person may be able to provideinformationrelating tothe affairs of the bank: Provided that the person examined, whether under oath or not, may have his or her legal adviser presentattheexamination:Providedfurther that ongood cause shown the commissioner may direct the proceedings that underthisparagraph shall beheld in camera and not be - accessible to the pGblic;’ ”; ( 0 by the substitution in subsection (6) for paragraphs (a) ( 6 )of the following ‘ and . 35 paragraphs, respectively: “(a)Any person examined by a commissioner underthis section shall not be entitled, at such examination, to refuse to answer any question upon the ground that the answer would tend to incriminate him or upon the ground that he &is to be tried on a criminal charge and may be prejudiced at such trial by his answer. 40 ( b )Where any person gives evidence in terms the provisions of this of - _ section and is obliged to-answer questions that may incriminate him @ or, where he or she is to be tried on a criminal charge, & may t prejudice him or her at such trial, the commissionershalldirect, in respect of such part of the proceedings, that no information regarding 45 such questions and answers may be published in any manner whatsoever.” ; (g) by the substitution for subsection (7) of the following subsection: “(7) In addition to the powers conferred upon the commissioner by subsection (4)the commissioner shall for the purpose of the performance 50 of [his] the functions of the Commissioner under this section have the power tosummon before [him] the commissioner any such person as [he] the commissionermayexamine in terms of theprovisions of subsection (5)”; 55 (12) by the substitution for subsection (8) of the following subsection: ‘.(8) If any person who has beenduly summoned under subsection (7) and to whom a reasonable sum for[his] the expenses of such person has been tendered, failsto attend before a commissioner at time and place the appointed by the summons without excuse lawful made to the commissioner at the time of the sitting, the commissioner may cause the 60 ~~ e e 56 GOVERNMENT No.GAZETTE, 25294 2003 5 AUGUST Act No. 19,2003 BANKS AMENDMENT ACT, 2003 person so summoned to be apprehended and brought before [him] the commissioner for examination.”: (ij by the substitution for subsection (9) of the following subsection: “(9) Any person duly summoned under subsection shall be entitled (7) to such witness fees as [he] such person would have been entitled to if he [were] or she had been a witness in civil proceedings in a magistrate’s court.”; ( j ) by the substitution in subsection (1 1) for thewords preceding paragraph ( a ) of the following words: “A commissioner shall within a period of five months as from the date of [his] the commissioner’s appointment complete [his] investigation in terms of subsection (1j and shall within aperiod of 30 days after completion of such investigation prepare a written report thereon, in which, inter diu,shall be stated whether or not, in the opinion of the commissioner-”; and ( k ) by the substitution for subsection (14) of the following subsection: “( 14) Any person who( a ) has been duly summoned under this section by a commissioner and who fails, without sufficient cause, to attend at the time and place the specified in summons; (bj has been duly summoned underthis section by a commissioner and who(ij fails,without sufficient cause, to remain in attendance until excused by the commissioner from further attendance; (ii) refuses to be sworn or to affirm aswitness; or a (iiij fails, without sufficient cause(aa) to answer fully and satisfactorily any question lawfully put to [him] such person by a commissioner, notwithstanding that such answer may tend to incriminate him g &; or (bbj to produce books or papers in [his] &custody of such person or under [his] &control of such person which a commissioner has required him to produce; (c) wilfully furnishes the commissioner with any false information; (dj refuses or fails to comply to the best of his ability with any reasonable request made to him &by the commissioner in the exercise of [his] the commissioner’s powers or the performance of [his] the commissioner’s duties; (e) wilfullyhindersthecommissionerintheexercise of his or her powers or the performance of his duties: or (f) fails to comply with any provision of a direction by the commissioner or the Registrar as contemplated in this section, shall be guilty of an offence.”. 5 10 15 20 25 30 e 35 40 Amendment of section 70 of Act 94 of 1990, as amended by section 9 of Act 42 of 1992, sections 18 and 25 of Act 9 of 1993, section 45 of Act 26 of 1994 andsection 12 45 of Act 36 of 2000 49. Section 70 of the principal Act is hereby amended(a) by the substitution in subsection (2)(a) for subparagraph (iij of the following subparagraph: “(ii) an amount which represents a prescribed percentage of the sum of 50 amounts calculated by multiplying the average of the amounts (as shown in the returns furnished to the Registrar in terms of section 75[(l)ja)(ii)]) of such different categories of(aaj assets; and (bbj other risk exposures in theconduct of its business,”; and 55 ( b ) by the substitution in subsection (2B)(a)(ii) for item ( a a ) of the following item: “(mj aprescribedpercentage of the sum of amountscalculated by multiplying the averageof the amounts (as shown in the returns furnished to the Registrar- in terms of section 75[(l)(a)(ii)]), of 60 such different categories of(A) assets: and GOVERNMENT 25294 No. 58 Act No. 19,2003 GAZETTE, 2003 5 AUGUST BANKS AMENDMENT ACT, 2003 (B) other risk exposures in the conduct of its business, as may be prescribed in the Regulations relating to Banks,by the risk weights, expressed as percentages, so prescribed in respect of such different categories of assets and other risk exposures; and”. 5 Amendment of section 72 of Act 94 of 1990, as amended by section 10 of Act 42 of 1992, section 25 of Act 9 of 1993 and section 14 of Act 36 of 2000 50. Section 72 of theprincipalActisherebyamendedbythesubstitutionfor subsection ( 3 ) of the following subsection: “ ( 3 ) A bank shall not pledge or otherwise encumber any portion of the liquid 10 assets held by it in compliance with the provisions subsection (1): Provided that of the Registrar may exempt a bank from the prohibition containedin this subsection on such conditions and to such an extent andfor such a period [he] the Registrar as may determine.”. Amendment of section 73 of Act 94 of 1990, as substituted section 15 of Act 36 15 by of 2000 51. Section 73 of the principal Act hereby amended by the substitutionsubsection is in (1) for paragraph (b) of the following paragraph: “ ( b )shall in the eventof the aggregate amount investments, loans, advances and of other credit contemplated in paragraph (a), relating to anyprivatesector 20 non-bank person, exceeding 800 per cent of such an amountof its capital and reservesmay as be prescribed, be subjectsuch to additional capital requirements as may be prescribed.”. Amendment of section 74 of Act 94 of 1990, as amended sections 20 by and 25of Act 9 of 1993 25 52. Section 74 of the principal Act is hereby amended( a ) by the substitution for subsection (2) of the following subsection: “(2) The Registrar may summarily take action underthis Act against a bank referred to in subsection (1) or, if in the circumstances [he] the Registrar deems it fit to do so, condone the failure or inability and a 030 E3 the bank concerned an opportunity, subject to such conditions as the Registrar may determine,to comply with the relevant provision within a specified period.”; and ( ) by the substitution for subsection (4) of the following subsection: 6 “(4) A fine imposed under subsection shall be paid to the Registrar 35 (3) within such period as may be specified in the relevant notice, andif the bankConcernedfails to paythe fine within the specified period the Registrar may by way of civil action in a competent court recover from that bank the amount of the fine or any portion thereof which [he] the 40 Registrar may in the circumstances consider justified.”. L Amendment of section 75 of Act 94 of 1990, as amended by section 12of Act 42 of 1992, sections 21 and 25 of Act 9 of 1993 and section 47 Act 26 of 1994 of 53. Section 75 of theprincipalActisherebyamendedbythesubstitutionfor subsection (5) of the following subsection: “(5) A bank shall furnish the Registrar, in respect of those of the respective 4s returns referred to in subsections (1) and (3) which most nearly coincide with the end of the financial year of the bank with a report by the auditor of the bank in which is stated whether or not those returns fairly and conformity with generally in accepted accounting practice present thoseaffairs of the bankto which the returns relate, and the Registrar may, if he orshe deems it necessary, require the bank to so so furnish [him] the Registrar with such a report in respect of any other of those returns furnished during the financial year.”. 60 No. 75294 GOVERNMENT GAZETTE, 5 AUGUST 2003 BANKS AMENDMENT ACT. 2003 Act No. 19, 2003 Substitution of section 76 of Act 94 of 1990, as amended by section 2 of Act 81 of 1991, section 25 of Act 9 of 1993 and section 48 of Act 26 of 1994 54. The following section is hereby substituted for section 76 of the principal Act: “Restriction on investments in immovable property andshares, and on loans and advances to certain subsidiaries 5 76. ( I ) Subject to the provisions of subsection ( 2 ) ,a bank which invests money in immovable propertyor in shares of any company, or which lends or advances money to any of its subsidiaries [of which the main object is the acquisition and holding or development of immovable property,] shall manage its transactions in such investments, loans or advances in such 10 a way that the sum of the amountsl a ) invested by it in immovable property, taken at the book value thereof; ( b ) invested by it in shares of any company (excluding preference shares which are not convertible into ordinary shares), taken at the price at which they were acquired; and 15 (c) owing to it by any such subsidiary in respect of a loan or an advance granted by it, does not at any time exceed a prescribed amount. (2) A bank may with the written approval of the Minister and subject to such conditions as he or she may determine, make investments and grant 20 loans and advances, referred to in subsection (l),to an aggregate amount which exceeds the sum to which it is limited in terms of subsection (l).”. Amendment of section 77 of Act 94 of 1990, as amended by section 13 of Act 42 of 1992, section 25 of Act 9 of 1993 and section 49 of Act 26 of 1994 55. Section 77 of the principal Act is herebyamended by the substitution for subsection (1) of the following subsection: “( 1) A bank which invests money in debenturesor preference sharesof any of its associates (excluding anysuch associate whichis a subsidiary referred in section to 76( I), a bank or a mutual building society), or which lends or advances money to any such associate, or which provides guarantees in respect of liabilities of such associates. shall manage its transactions in such investments, loans, advances or guarantees in such a way that the sum of the amounts( a ) invested by it in debentures or preference shares of such associates (excluding debentures or preference shares which are convertible into ordinary shares), taken at the price at which they were acquired; (bj owing to it by such associates in respect of loans or advances granted by it; and ( c ) of such guarantees, does not at any time exceed ten per cent of [its liabilities, excluding its liabilities in respect of capital and reserves] the amount prescribed.”. Amendment of section 78 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 50 of Act 26 of 1994 56. Section 78 of the principal Act is hereby amended( 0 ) by the substitution in subsection (1) for paragraph jbj of the following paragraph: 45 “ ( b )shall not lend moneyto any person against securityof its own shares or of shares of that bank’s controlling company;”; ( b ) by the substitution in subsection (1) forparagraph (8) of thefollowing paragraph: * ( )shall not, for the purpose of effecting a money lending transaction 50 ‘g directly between a lender and a borrower, perform any act in the capacity of an agent except where the funds to be lentin terms of the money lending transaction are entrusted by the lender to the bank 25 30 35 40 62 No. 25294 GOVERNMENT GAZETTE, BANKS AMENDMENT ACT. 2003 2003 5 AUGUST Act No. 19,2003 subject to a written contract of agency in which, in addition to any other terms thereof, at least the following matters shall be recorded: (i) Confirmation by the lender that the bank acts as [his] -agent the of the lender; (ii) that the lender assumes, except inso far as [he] the lender may 5 in law have a right of recovery against the bank, all risks connected with the placing by the bank of the funds entrusted to it by the lender, as well as the responsibility to ensure that the bank executes the lender’s instructions as recorded in the written contract of agency; and 10 (iii) that no express or implied guarantee regarding the paymentof any amount of moneyowing by oneperson to anotherin pursuance of the relevant money lending transaction is furnished by the bank;”; and (c) by the addition to subsection (1) of the following paragraph: 15 “(kj shall not, without the prior written appiovai 0; the Registrar and notwithstanding anything to the contrary contained in anylaw, pay out dividends from its share capital.”. Amendment of section 81 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 53 of Act 26 of 1994 20 for 57. Section 81 of the principal Act is herebyamendedbythesubstitution subsection (1) of the following subsection: “( 1) If the Registrar has reasonto suspect thatany person who is not registered as a bank in terms of this Act nor authorized in terms of the provisions of section 25 18A(1) to carry on the business of a bank(a) is likely to conduct the business of a bank in contravention of the provisions of section 11(1) or 18A(6); or (b) has so contravened provisions the of section ll(1) or 18A(6) or has contravened the provisions of section 22(4) or ( 5 ) , or that such a contravention 30 is likely to be continued or repeated, the Registrar may apply to a division of the [Supreme] _ _ Court having iurisdiction (hereinafter in this section referred to as the court) for an order>(i) prohibiting the anticipated contravention referred to in paragraph (a); (ii) prohibiting the continuation or repetition of a contravention referred to in 35 paragraph ( 6 ) ;or (iii) prohibiting the person concerned from disposing of or otherwise dealing with any of [his] the [or its] assets of that person while the contravention suspected of having been committed or of being continued is investigated.”. Amendment of section 82 of Act 94 of 1990, as amended by section 25 of Act 9 of 40 1993 and section 54of Act 26 of 1994 58. Section 82 of theprincipal Act is herebyamended by the substitution for subsection (1) of the following subsection: “(1) If the Registrar has reason to suspect that any person who is neither registered as a bank nor authorized in terms of the provisions of section 18A(1) to carry on the business of a bank iscarrying on thebusiness of a bank, the Registrar 45 may by notice in writing direct that person to submit to [him] the Registrar such document or to furnish [him] the Registrar with such information, relating to the affairs of that person, as the Registrar may specify in the notice and as may be available to that person.”. 64 No. 25194 GOVERNMENT GAZETTE, BANKS AMENDMENT ACT. 2003 5 AUGUST 2003 Act No. 19,2003 Amendment of section 83 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 and section 55 of Act 26 of 1994 59. Section 83 of the principal Act is hereby amended( a ) by the substitution for subsection (1) of the following subsection: “(1) If as a result of an inspection conducted under section 12 of the South African ReserveBankAct,1989(Act No. 90 of 1989),the Registrar is satisfied that any person has obtained money by carrying on the business of a bank without being registered as a bank or without being authorized, in terms of the provisions of section 18A(1), to carry on the business of a bank, the Registrar may in writing direct that person to repay, subject to the provisions of section 84 and in accordance with such requirements and within such period as may be specified in the direction, all money so obtained by [him] that person in so far as such money hasnotyetbeenrepaid,includinganyinterest or any other amounts owing by [him] that person in respect of such money.”; and (bj by the substitution for subsection (3) of the following subsection: “(3) Any person who refusesor fails tocomply with a direction under subsection (1)shall be guilty of an offence; and shall for the purposes of any law relating to the winding-up of juristicpersons orto the sequestration of insolventestates, be deemed not to be able topay [his] the debts owed by suchperson or to have committed an act of insolvency, as the case may be,and the Registrar shall, notwithstanding anything to the contrary contained in any law, be competent to apply for the winding-up of such a juristic person or for the sequestration of the estate of such a person, as the case may be, to any court having jurisdiction.”. Amendment of section 84 of Act 94 of 1990 60. Section 84 of the principal Act is hereby amended(a) by the substitution for subsection (1) of the following subsection: 30 “(1) Simultaneously with the issuing of adirectionundersection 83( I, or as soon thereafter as may be practicable, the Registrar shall by ) a letter of appointment signedby him orher appoint a person (hereinafter in this section referred to as the manager) to manage and control the repayment of money in compliance with the direction by the person 35 subject thereto.”; (b) by the substitution for subsection (2) of the following subsection: “(2) The Registrar shall serve a copy of the letter of appointment referred to insubsection (1) uponthe person subject to therelevant direction, and such person shall, with effect fromthe date of the letter of 40 appointment, be prohibited from disposing of or otherwise dealing with such of [his] assets of such person as are specified in theletter of appointment, except with the written permission of the manager.”; ( e ) by the substitution for subsection (3) of the following subsection: “(3) The manager shall act under the control the Registrar, and [he] 45 of the manager may from time time applyto the Registrar for instructions to in regard to any matter arising out of or in connection with the performance of his & duties in terms of subsection (4).”; (d) by thesubstitution in subsection (4) forparagraph (c) of the following paragraph: 50 ”(c) to report the suspected commissionby any person of any offence of which [he] the manager becomes awarein the course of the performance of his duties as managerin terms of this section, to the [attorney-general] responsible prosecuting authorities having jurisdiction in the area in which such offence is so suspected of 55 having been committed; and”; ( e ) by the substitution in subsection (4) for paragraph (dl of the following paragraph: ‘.(d) to perform any other function assignedto [him] the manaFer by the Registrar in connection with the finalization of the repayment of 60 money in accordance with the relevant direction.”; 5 10 15 20 25 66 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 Act No. 19.2003 BANKS AMENDMENT ACT, 2003 cf) by the substitution for subsection (5) of the following subsection: “(5) For the purposes of the performance of [his] the duties as set out in subsection (4), the manager shall, in relation to the person subject to the relevant direction and in relation to theaffairs of that person, have the powers conferred by [section 4(1), ( 2 ) , (3) and (4)] sections 4 and 5 of 5 the inspection of Financial institutions Act,11984 (Act No. 38 of 1984)] 1998 (Act No. 80 of 1998), upon an inspector contemplated in [that section] those sections, as if the manager were an inspector and the person subject to the direction were a financial institution contemplated in [that section] those sections.”; 10 (g) by the substitution for subsection (6) of the following subsection: “(6) The manager shall in respect of the services rendered by him or - in terms of this section and the responsible inspectoror inspectors her shall in respect of an inspection referred to in section 83(1) conducted under section 12 of the South African Reserve Bank Act, 1989 (Act No. 15 90 of 1989), be paid such remuneration by the Registrar as [the an Minister] the Registrarmay determine, and the Registrar may recover amount equal to the remuneration so paid from the person subject to the direction or the inspection, as the case may be.”; (h) by the substitution for subsection (7) of the following subsection: 20 “(7) The manager shall hold office until the relevant direction been has fullycompliedwith,but the Registrar may at any time inwriting withdraw appointment the of the manager on good cause shown, whereupon manager vacate office.”; the shall his and (i) by the substitution for subsection (8) of the following subsection: 2s “( 8) Any person who( a ) when requested by themanager to take an oath orto make an affirmation, refuses to do so; (b) without lawful excuse refuses or failsto answer to the best of his or - ability a question to [him] such person by manager in her put the 30 exercise of [his] the manager’s powers or the performance of [his] the manager’s duties, though even the answer tend may to incriminate that person; ( c ) wilfully furnishes the manager with any false information; (d) refuses or fails to comply to the best of his or her ability with any 35 reasonable request made [him] such person by the manager in the to exercise of [his] the manager’s powers or the performance of [his] the manager’s duties; (e) wilfullyhindersthemanagerin the exercise of [his] powers or the performance of [his] duties of manager; the or 40 If) commits any otherdeeddesigned to obstruct, or to enableany person to evade, the repayment of money as required by a direction under section 83(1), shall be guilty of an offence: Provided that no answer given to a question put bythe manager to a person in termsof this section andno information 45 t h e proceedings.”. Amendment of section 86 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 61. Section 86 of the principalAct is hereby amended by the substitution for 50 subsection (4) of the following subsection: “(4) if the Registrar of the opinion that a person requiresan inspection or any is certificate, copy or extract referred to in subsection (1) to promote any public interest, [he] the Registrar may exempt that person from the obligation to pay the prescribed fee respect of such in inspection, certificate, copy extract.”. or 55 68 No. 25294 ~~ GOVERNMENT GAZETTE, BANKS AMENDMENT ACT, 7-003 5 AUGUST 2003 Act No. 19.2003 Substitution of section 88 of Act 94 of 1990 62. The following section is hereby substituted for section 88 of the principal Act: “Limitation of liability 88. No liability shall attach to the South African Reserve Bank or, either in his or her official or personal capacity, any member of the board of 5 directors of the said Bank, the Registrar any other officer or employee of or the said Bank, forany loss sustained by or damage caused any person as to a result of anything done or omitted by such member, Registrar or such the other officer or employee in the bona$de performance of any function or 10 duty under this Act.”. Amendment of section 89 of Act 94 of 1990 63. Section 89 of the principal Act is hereby amended by the substitution for the words preceding paragraph ( a ) of the following words: “Notwithstanding the provisions of section 33(1) of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989), theRegistrar may furnishinformation 15 acquired by him as contemplated in that section-”. Amendment of section 90 of Act 94 of 1990, as amended by section 25 of Act 9 of 1993 64. Section 90 of the principal Act is hereby amended( a ) by the substitution in subsection (1) forparagraph ( b ) of the following paragraph: “(b)subject to the provisions of the Companies Act, providing guidelines relating to the conduct of, and prescribing requirements to be complied with by, a member of the board of directors of a bank in the performance of [his] functions [as] of such a director;”; (bj by the substitution subsection in (1) forparagraph(ij of the following paragraph: “(i) prescribing, generally, any matter, whether or not connected with any matter specified in paragraphs (a) to (hj, inclusive, which [he] the Minister may deem it necessary or expedient to prescribe in order that theobjects and purposes of thisAct may bebetter achieved.”; and ( e ) by the substitution for subsection (2) of the following subsection: “(2) A person who is obliged in terms of any provision of this Act to render a return or statement in a prescribed form, shall be deemed not to have rendered that return or statement unless [he] such person has set forth therein all theparticularsforwhichprovision is made in the prescribed form.”. 20 25 30 35 Amendment of section 91 of Act 94of 1990, as amended by sections 23 and 25 of Act 9 of 1993, section 56 of Act 26 of 1994 and section16 of Act 36 of 2000 40 65. Section 91 of the principal Act is hereby amended( a ) by the substitution for subsection (1) of the following subsection: “( 1) Any person who( a ) fails to comply with a direction under section 7; (aA) in[completing] the completion of any questionnaire contemplated 45 in section l(1A)jc) or in the furnishing of any prescribed information contemplated in section 60(5) furnishes the Re,’ t r a r w with any information which to the knowledge of such person is untrue or misleading in any material respect[,]; or 70 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 Act No. 19,2003 BANKS AMENDMENT ACT, 2003 (b) (c) (d) (e) (b) contravenes or fails to comply with a provision of section 7(3), (4) or (5), 34,35,37(1), 38(1), 39,41,42(1), 52(1) or(4), 53,55,58,59, 60(5)(a)(i), 60(5)(b)(i), 61(2),65, 66,67, 70(2), (2A) or (7B), 70A, 72, 73, 75, 76, 77, 78(1) or (3), 79, 80 or 84(2), shall be guilty of an offence.”; 5 by the substitution for subsection (4) of the following subsection: “(4) Any person convicted of an offence in terms ofsection 1(1A)(d), 11(2), [18A(6) or] 18A(7), 22(4) or 60(5)(a)(i) or (b)(i) read with subsection (l)(b) of this section, shall be liable to a fine [not exceeding RlOO 0001 or to imprisonment for a period not10 exceeding [five] ten years to or both [such] 2 fine and such imprisonment; [or] section17(6),21,22(3)or (8), 32(4)(a),69A(14),78(2),82(3), 83(3)(aj, 84(8) or subsection (l), (2) or (3) of this section (excluding the offence in terms of subsection (l)(b), referred to in 15 paragraph (a)),shall be liable to afine [not exceeding R10 0001 or to imprisonment for a period not exceeding months] five years [six or to both [such] 2 fine and such i m p r i s o n m e n t s (c) anyotherprovisionof this Act in respect of whichno specific penalty been has prescribed shall be liable a or to to fine 20 imprisonment for a period not exceeding years or to both fine five a and such imprisonment.”; by the substitution for subsection (6) of the following subsection: “(6) If any person fails to submit to the Registrar or to fcmish the Registrar any with return, statement, report other or document or 25 information in accordance with a requirement of this Act within the perioddetermined by orunder this Act or, if that periodhasbeen extended by the Registrar under section 8(2)(a), within the extended period, the Registrar may impose upon [him] such person by way of a notice in writing a fine not exceeding[RlOO] RlOOO for every day during30 which such failure continues.”; by the insertion after subsection (6) of the following subsection: “(6A) If any person submitsto the Registraror furnishes the Registrar with any return, statement, report or other document or information in accordance with a requirementthis Act containing materially incorrect 35 of or inaccurate information that results in that person having to revise, correct or resubmit such a return, statement, report or other document or information, the Registrar may impose upon such person by way of a notice in writing a fine not exceedingRlOOO for every day during which such areturn, statement, report or other document or information has 40 not been revised, corrected resubmitted the or to satisfaction of the Registrar.” ; and by the substitution for subsection (7) of the following subsection: “(7) A fine imposed under subsection (6) or (6A) shall be paid to the Registrar within such periodas may be specified in the notice, andif the 45 person concerned fails to pay the fine within the specified period the Registrar may by way of civil action in a competent court recover from such person the amount of the fine or any portion thereof which the Registrar may in the circumstances consider justified.”. Amendment of section 92 of Act 94 of 1990, as amended by section 57 of Act 26 of 50 1994 66. Section 92 of the principal Act is hereby amended( a ) by the substitution for subsection (2) of the following subsection: “(2) A member of the standing committee shall hold office for such period as the Minister determine, shall may and be eligible for 55 reappointment the on expiration of [his] term of office of such a member.” : (b) by the deletion of subsection (4). 72 No. 25294 GOVERNMENT GAZETTE, 5 AUGUST 2003 ~ _ _ _ _ _ Act No. 19,2003 BANKS AMENDMENT ACT, 2003 Short title 67. This Act is called the Banks Amendment Act, 2003.