South Africa

Do senior bank staff, including non-executive directors, have to be registered with your national regulatory authority?

No, there is no specific registration requirement for senior banks staff.

However, as a record-keeping requirement, section 58 of the Banks Act, 1990 (the Banks Act) states that every bank and controlling company shall, within 30 days of its registration as such, furnish the Registrar of Banks (the Registrar) with a copy of its record of directors and officers. Furthermore, Form BA 020 must be completed by individuals who are holding, or proposing to hold, the office of a director or executive officer of a bank or controlling company (see South Africa Reserve Bank). The information which must be submitted includes personal and contact details, curriculum vitae, other directorships and shareholdings and a completed fit and proper type questionnaire. A sworn declaration by the director or officer that the information provided in Form BA 020 is true and correct must also be submitted.

If your national regulatory authority requires registration of senior bank staff what are the requirements?

As mentioned above, there is no specific requirement for the registration of senior bank staff.

However, section 60(5)(a) of the Banks Act states that every bank shall give the Registrar written notice of the nomination of any person for appointment as a chief executive officer, director or executive officer by furnishing the Registrar with the prescribed information in respect of the nominee.  The prescribed information must be provided in Form BA 020.

The Registrar may return a written notice to the bank if the prescribed information (required on Form 020) is incomplete or contains errors.

It is proposed that, with effect from December 10, 2014, a bank must not appoint any person to a position of, or refer to any employee as, a director unless that person or employee has been appointed as a director of that bank in terms of section 66 of the Companies Act, 2008 (the Companies Act).

Is there legislation specific to the banking sector that provides for penalties to be levied against senior staff for mis-managing a bank?

Yes, the Banks Act sets out the offenses and penalties for any persons, such as directors, who contravene or fail to comply with its specific sections.

For example, section 60 of the Banks Act states that each director, chief executive officer and executive officer of a bank owes a fiduciary duty and a duty of care and skill to the bank.

Furthermore, the Registrar may institute action under section 77 of the Companies Act, 2008 (the Companies Act) against any director, chief executive officer or executive of a bank where, for example, there is breach of a fiduciary duty, willful misconduct, or a breach of trust. According to section 77 of the Companies Act, the director of the company will be liable for any loss, damages or costs sustained by the company as a direct or indirect consequence of the director having acted in the name of the company or signed anything on behalf of the company, despite knowing that he/she lacked the authority to do so.

What is the maximum amount the regulator can fine an individual?

According to section 91 of the Banks Act, any person convicted of an offense listed in section 91(4)(a) may be liable to a fine or to imprisonment not exceeding 10 years, or both.

If any person fails to submit to the Registrar or to furnish the Registrar with any return, statement, report or other document or information as required by the Banks Act within the required period, the Registrar may impose a fine not exceeding R1,000 for every day during which the failure continues.

Any person convicted of an offense under the Companies Act is liable to a fine or imprisonment not exceeding 10 years, or both.

Is there legislation in place that requires banks to have in place remuneration policies and practices that are consistent with effective risk management?

Yes, there is such legislation in place, under both the Banks Act and the Companies Act.

Section 64C of the Banks Act states that the board of directors of a bank or controlling company will establish a remuneration committee, consisting only of non-executive directors of the bank or controlling company. In general, the functions of the committee will be to oversee the compensation system’s design and operation and to exercise competent and independent judgment on compensation policies. The Registrar may, upon written application, exempt the board of directors of a bank from the duty to appoint a remuneration committee if the Registrar is satisfied that the remuneration committee appointed in terms of the relevant controlling company is able adequately to assume the responsibilities of a remuneration committee in respect of that bank.

Section 30(4)(a) of the Companies Act requires the annual financial statements of a company to include the remuneration and all benefits received by each director, or individual holding any prescribed office in the company.

Is there any legislation planned in your jurisdiction that will strengthen the accountability of senior bank staff?

There is no planned legislation that we are aware of which relates specifically to the accountability of senior bank staff.