On February 24, the worldwide financial crime watchdog, the Financial Action Task Force (FATF), introduced that South Africa has been added to its “grey list”. This listing consists of nations positioned underneath scrutiny to implement requirements to stop cash laundering and terrorism financing.
To get again into the FATF’s good books, South Africa is ready to undertake a raft of legislative modifications over the subsequent three to 5 years to modernise the regulatory framework for financial establishments and align with worldwide requirements.
According to Astrid Ludin, deputy commissioner on the Financial Sector Conduct Authority, the nation’s nationwide treasury can be finalising a Conduct of Financial Institutions Bill which seeks to streamline the licensing of financial establishments and enhance disclosure necessities to present larger visibility into their enterprise practices. .
Additionally, the Financial Markets Act can be being reviewed and modifications are anticipated to be submitted to parliament by the top of the yr. Some of the anticipated modifications embrace enhanced controls over quick promoting and securities financing transactions, and extra disclosure necessities of pre- and post- buying and selling knowledge to enhance market surveillance.
According to Ludin, the FSCA will spend the subsequent three years enhancing the digitisation of its methods to allow it to streamline its reporting necessities, take away redundancies, and facilitate the sharing of data with different regulators such because the prudential authority and the Financial Intelligence Centre.
Why was South Africa greylisted?
According to the nation’s nationwide treasury, South Africa carried out poorly in its 2019 mutual analysis by the FATF, because of many establishments being crippled by state seize underneath former president Jacob Zuma’s administration.
The nation was subsequently put underneath a one-year commentary interval in October 2021 to give it time to tackle the 67 really helpful actions by the FATF following the analysis.
In January 2023, an evaluation of South Africa’s progress discovered that the nation had managed to scale back the 67 really helpful actions to 8 strategic deficiencies.
The FATF then took the choice to greylist South Africa till the deficiencies are addressed.
“In summary, the greylisting of a country means that its government has adopted an action plan to address deficiencies identified during its mutual evaluation after an observation period, and to implement such action plan within a defined time period, and with FATF monitoring such implementation,” mentioned the National Treasury in a press release.
Following the greylisting, the South African authorities is working to tackle the deficiencies identified by the FATF by the top of January 2025, to adjust to the FATF’s requirements.
…. to be continued
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