Banks Act: Draft Amendments to Market and Credit Valuation Adjustment Risk Regulations

Posted 24 February 2026 Written by Acts Online
Category Financial Sector

Brought to you by SA Legal Academy: The Prudential Authority has issued a draft directive proposing amendments to the regulations under the Banks Act, No. 94 of 1990, specifically concerning the calculation of capital for market and credit valuation adjustment (CVA) risk.

In terms of the draft directive, the Prudential Authority intends to delete specific regulatory requirements currently used to calculate capital for market and CVA risk. These amendments are designed to refine regulatory reforms and standards that have been in force since July 2025, aligning South African banking regulations with the Basel Committee on Banking Supervision (BCBS) post-crisis frameworks and revised requirements.

The proposed changes involve the following key regulatory actions:

  • The deletion of existing regulatory requirements to be met when calculating capital for market and CVA risk.
  • The implementation of necessary consequential changes to the broader regulatory framework.
  • Alignment with international BCBS standards to ensure consistency in capital adequacy reporting.

Stakeholders and interested parties are invited to submit public comments on the proposed changes by no later than 10 April 2026. Subject to the consultation process, the Prudential Authority anticipates that the finalised amendments will take effect on 1 June 2026.

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

  • For yourself: No direct individual obligations; impact is channelled through institutional compliance and risk management frameworks for professionals working within the banking sector.
  • For your business: Registered banks and branches of foreign institutions must review internal capital adequacy assessment processes (ICAAP) and reporting systems to ensure readiness for the proposed 1 June 2026 implementation date.
  • For your clients: Institutional banking clients may experience adjustments in pricing or capital allocation strategies as banks recalibrate their market and CVA risk models to meet the revised standards.

Originally published at https://legalacademy.co.za/news/read/banks-act-input-sought-on-market-credit-vauation-adjustment-risk-regulatory-amendments

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