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Financial Sector Regulation Act, 2017 (Act No. 9 of 2017)

Chapter 12 : Financial Conglomerates

166. Approval and prior notification of acquisitions and disposals

 

(1)

(a) A holding company of a financial conglomerate may not acquire or dispose of a material asset as defined in prudential standards made for this section, without the approval of the Prudential Authority.
(b) A prudential standard made under this subsection must clearly identify what constitutes a material asset.

 

(2) The Prudential Authority may not give an approval in terms of subsection (1), unless the Authority is satisfied that the acquisition or disposal will not prejudicially affect—
(a) the prudent management and the financial soundness of an eligible financial institution within the financial conglomerate;
(b) the ability of the Prudential Authority to determine —
(i) how the different types of business of the financial conglomerate are conducted;
(ii) the risks of the financial conglomerate and each person that is part of that financial conglomerate; or
(iii) the manner in which the governance framework is organised and conducted for the financial conglomerate.

 

(3)

(a) If the Prudential Authority contemplates refusing to grant approval of an acquisition or disposal referred to in subsection (1), prior to taking a decision, the Prudential Authority must notify the holding company of the proposed refusal to grant approval.
(b) A notice referred to in paragraph (a) must—
(i) include a statement of the reasons for the refusal to grant approval; and
(ii) invite the holding company to make submissions on the matter, and give a reasonable period to do so.

 

(4) In deciding whether to grant or refuse a request for approval in terms of subsection (1), the Prudential Authority must take into account all relevant considerations, including at least the following:
(a) Whether the acquisition or disposal will not prejudicially affect the matters referred to in subsection (2); and
(b) submissions made in relation to the application for approval, including any submissions made in response to a request for submissions referred to in subsection (3).

 

(5) An acquisition or disposal in contravention of subsection (1) is void.

 

[Section 166 came into effect on 1 March 2019 by section (f) of Notice No. 169 of 2018, GG 41549, dated 29 March 2018]