Draft Directive on Special Purpose Institutions Issued for Comment

Posted 25 March 2026 Written by Acts Online
Category Financial Sector

Brought to you by SA Legal Academy: The Prudential Authority (PA) has invited comments on a draft directive concerning issuer special purpose institutions (SPIs) and their annual auditing processes.

In terms of the Banks Act, No. 94 of 1990, the PA is seeking to enhance its capacity for monitoring risks arising from securitisation schemes. The proposed directive, once finalised, will replace Directive 4 of 2017 (published in September 2017) and introduces additional reporting obligations to supplement those already prescribed in Directive 1 of 2012.

The draft directive focuses on the following regulatory objectives:

  • Strengthening the oversight of issuer special purpose institutions involved in securitisation.
  • Refining the annual auditing process to ensure more robust verification of SPI activities.
  • Ensuring that the PA receives granular data necessary for systemic risk monitoring within the financial sector.

Stakeholders and interested parties are required to submit their input on the draft proposals by no later than 13 April 2026. The transition from the 2017 directive to the new framework is intended to align reporting standards with current international best practices for securitisation oversight.

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

  • For yourself: As a compliance officer or auditor, you must familiarise yourself with the expanded verification requirements for SPIs to ensure that future audit opinions comply with the updated PA standards.
  • For your business: Financial institutions acting as sponsors or originators must review their current reporting systems to ensure they can capture the additional data points required under the proposed replacement for Directive 4 of 2017.
  • For your clients: Clients operating as issuer special purpose institutions should be advised of the potential for more rigorous annual audits and the necessity of aligning their internal controls with the new risk-monitoring framework by the 2026 deadline.

Originally published at https://legalacademy.co.za/news/read/special-purpose-institutions-input-sought-on-draft-directive

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