banking law study unit 3 Flashcards
what is the role of the reserve bank SARB
Is the central bank of RSA;
Must protect the value of the currency (Rand)
functions are those that are customarily exercised by central banks
what are the powers of the SARB IN TERMS OF SECTION 10 OF THE SARB and what are the duties that section 11 of the FSRA provide to the SARB
SECTION 10 provides that SARB HAS THE POWERS TO MAKE AND CAUSE BANKNOTES AND COINS TO BE MADE.
IT HAS THE POWERS TO ISSUE BANKNOTES AND COINS OR CAUSE THEM TO BE ISSUED
SECTION 11 PROVIDES THAT IT MUST PROTECT AND ENHANCE THE FINANCAIL STABILITY AND IF THE SYSTEMATIC EVENT HAS OCCURED TO IMMIGRAT FOR RESTORING AND MAINTAING FINANCAIL STABILITY.
HOWEVER, IT MUST DO WITHIN ITS POLICY FRAMEWORK AND AS AGREED BETWEEN THE MINITER AND THE GOVERNMENT.
OR USE THE POWERS VESTED IN THEM
in terms of section 56 of FSRA what is conditional authority (second peak)
The FSCA is a juristic entity formed in terms of s56 of the FSRA.
The FSCA is not part of the Reserve Bank.
It is a national public entity.
The Financial Services Board has been dissolved and merged into the FSCA.
what are the duties of the SARB as provided in section 12 of the FSRA
- monitor and keep under review the strengths and weaknesses of the financial system; and
- (ii) any risks to financial stability, and the nature and extent of those risks
- take steps to mitigate risks to financial stability, including advising the financial sector regulators, and any other organ of state, of the steps to take to mitigate those risks;
- regularly assess the observance of principles in the Republic developed by international standard setting bodies for market infrastructures, and report its findings to the financial sector regulators
what is the financial stability review as provided in section 13 of FSRA
the Reserve Bank’s assessment of financial stability in the period under review;
(b) its identification and assessment of the risks to financial stability in at least the next 12 months;
(c) an overview of steps taken by it and the financial sector regulators to identify and manage risks, weaknesses or disruptions in the financial system during the period under review and that are envisaged to be taken during at least the next 12 months; and
(d) an overview of recommendations made by it and the Financial Stability Oversight Committee during the period under review and progress made in implementing those recommendations
in terms of section 1 of FSRA what is a systematic event and what are the roles of SARB with regards to systematic event
- an event or circumstance, occurs outside the Republic,
- that may reasonably be expected to have a substantial adverse effect on the financial system or on economic activity in the Republic,
- including an event that leads to a loss of confidence that participants in, payment systems, settlement systems or financial markets, or financial institutions,
- are able to continue to provide financial products or financial services, or services provided by a market infrastructure.
in terms of section 34 of FSRA and section 56 of FSCA what are function of these two acts
- regulate and supervise financial institutions that provide financial products or securities services AND market infrastructures
- co-operate with the Council for Medical Schemes in the handling of matters of mutual interest
- conduct and publish research relevant to its objective.
- support financial inclusion;
- regulate and supervise, in accordance with the financial sector laws, the conduct of financial institutions
in terms of section 7 of FSRA what are the objectives of FSRA?
financial stability;
the safety and soundness of financial institutions;
(c) the fair treatment and protection of financial customers;
(d) the efficiency and integrity of the financial system;
(e) the prevention of financial crime;
(f) financial inclusion;
(g) transformation of the financial sector;
and (h) confidence in the financial system.
the FSRA created the twin peak known as prudential regulation and conduct regulation which ACT’s govern these two regulations
SECTION 34 AND 36 OF FSRA GOVERNS PRUDENTAL REGULATIONS
SECTION 56 AND 58 OF FSCA GOVERNS CONDUCT REGULATIONS
in terms of section 32 of FSRA what is prudential authority (first peak)
The PA is formed in terms of s32 of the FSRA.
The PA is part of the Reserve Bank,
But is a separate legal entity (s32 FSRA).
Remember it is not a Public entity.
The CEO of the PA is a deputy governor of the Reserve Bank (s36 FSRA).
The PA replaced the Registrar of banks, among others.
