Prudential Authority: Draft Framework for Informal Cross-Border Remittances

Posted 14 January 2026 Written by Acts Online
Category Financial Sector

Brought to you by SA Legal Academy: The Prudential Authority has released a draft regulatory framework for alternative remittance providers that utilise informal channels for cross-border transfers.

The Prudential Authority (PA) has called for stakeholder input by 31 March 2026 on a draft regulatory framework designed to bring informal remittance providers into the formal financial regulatory net. The framework targets alternative channels such as hawaladars, Hundi operators, and Fei-Chen networks, which are often used to transfer money and other items of value across borders outside of conventional banking systems.

The draft is underpinned by the international Financial Action Task Force (FATF) Recommendation 14, which requires that countries take measures to ensure that natural or legal persons that provide money or value transfer services are licensed or registered, and subject to effective systems for monitoring and ensuring compliance.

This regulatory development gives practical effect to commitments outlined in the 2025/26 Budget regarding the expansion of cross-border remittance policy. The primary objective is to curb illicit financial flows and ensure that informal channels are:

  • Properly identified and registered with the relevant authorities;
  • Subject to anti-money laundering and counter-terrorist financing (AML/CFT) oversight; and
  • Integrated into the broader financial sector regulatory framework to mitigate systemic risk.

What this means for you, your business, or your clients

  • For yourself: No direct individual obligations; however, you must remain informed of the evolving AML/CFT landscape to provide accurate advice on the legality of cross-border value transfers.
  • For your business: Compliance officers and risk managers must review the draft framework to assess how the formalisation of these networks will impact existing transaction monitoring and the reporting of suspicious financial activity.
  • For your clients: Clients currently utilising informal remittance networks for trade or personal transfers must be advised of the impending licensing requirements and the potential for increased regulatory scrutiny of these channels by 2026.

Originally published at https://legalacademy.co.za/news/read/cross-border-remittances-draft-framework-out-for-comment

The views expressed herein are those of the author and do not necessarily reflect those of Acts Online. Acts Online accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.