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

Chapter 2 : Financial Stability

Part 6 : Systemically important financial institutions and payment systems

29. Designation of systemically important financial institutions

 

(1)

(a) The Governor may, by written notice to a financial institution, designate the institution as a systemically important financial institution.
(b) The power of the Governor in terms of paragraph (a) may not be delegated.

 

(2) Before designating a financial institution in terms of subsection (1) as a systemically important financial institution, the Governor must—
(a) give the Financial Stability Oversight Committee notice of the proposed designation and a statement of the reasons why the designation is proposed, and invite the Committee to provide advice on the proposal within a specified reasonable period; and
(b) if, after considering the Committee’s advice, the Governor proposes to designate the financial institution in terms of subsection (1), invite the financial institution to make submissions on the matter, and give it a reasonable period to do so.

 

(3) In deciding whether to designate a financial institution in terms of subsection (1), the Governor must take into account at least the following:
(a) The size of the financial institution;
(b) the complexity of the financial institution and its business affairs;
(c) the interconnectedness of the institution with other financial institutions within or outside the Republic;
(d) whether there are readily available substitutes for the financial products and financial services that the financial institution provides or, in the case of a market infrastructure, the market infrastructure;
(e) recommendations of the Financial Stability Oversight Committee;
(f) submissions made by or for the institution; and
(g) any other matters that may be prescribed by Regulation.

 

(4)

(a) If the Governor has determined in terms of section 14(4) that a systemic event has occurred or is imminent, the Governor may designate a financial institution as a systemically important financial institution without complying, or complying fully, with subsection (2) or (3).
(b) If the Governor acts in terms of paragraph (a) and designates a financial institution without complying, or complying fully, with subsection (2) or (3), the financial institution may make submissions on the designation to the Governor within 30 days after being notified of the designation.
(c) The Governor must consider any submissions in terms of paragraph (b) and, by notice to the financial institution, either confirm or revoke the designation.

 

(5) The designation of a financial institution as a systemically important financial institution does not imply, or entitle the financial institution to, a guarantee or any form of credit or other support from any organ of state.

 

(6) The Governor may, in writing, revoke a designation made in terms of this section.

 

(7) A designation, and the revocation of a designation, in terms of this section must be published.