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NA Passes Financial Sector and Deposit Insurance Levies Bill

June 10, 2022

Parliament

The national assembly (NA) has passed the Financial Sector and Deposit Insurance Levies Bill and sent it to the national council of provinces (NCOP) for concurrence.

The bill was tabled in parliament in January 2022.

It was published for comment in December 2021.

The bill’s explanatory summary was published in Government Gazette 45791.

In an earlier statement, national treasury confirmed that the bill was first published as the Draft Financial Sector Levies Bill in February 2021.

The bill seeks to “facilitate the funding of financial sector regulators, ombuds and other bodies, to ensure that they are able to effectively regulate the financial sector for the benefit of financial customers”.

Treasury added that the aim of the bill is to “provide funding to financial sector bodies for their operational requirements as well as the performance of their regulatory functions”.

It proposes a deposit insurance levy to enable the Corporation for Deposit Insurance to fulfil its mandate of administering the Deposit Insurance Fund provided for in the Financial Sector Laws Amendment Bill.

The bill aims to provide for:

• the imposition of financial sector levies on supervised entities;
• the imposition of a deposit insurance levy;
• exemption from such levies under certain circumstances;
• the allocation of amounts levied to financial sector bodies; and
• matters connected therewith.

The NA has also passed the Financial Sector and Deposit Insurance Levies (Administration) and Deposit Insurance Premiums Bill and sent it to the NCOP for concurrence.

The bill was also tabled in parliament in January 2022.

The bill’s explanatory summary was published in Government Gazette 45791 on 20 January 2022.

Treasury pointed out that the bill will provide financing for the Deposit Insurance Fund via the imposition of a deposit insurance premium.

The bill aims to:

• provide for the collection and administration of levies imposed in terms of the Financial Sector and Deposit Insurance Levies Act, 2022;
• amend the Financial Sector Regulation Act, 2017, in order to provide for the administration of levies imposed in terms of the Financial Sector and Deposit Insurance Levies Act, 2022;
• provide for the imposition, collection and administration of deposit insurance premiums;
• amend the Pension Funds Act, 1956, the Banks Act, 1990, the Mutual Banks Act, 1993, and the Financial Advisory and Intermediary Services Act, 2002, to align them with the Financial Sector Regulation Act, 2017, in respect of the financing of financial sector bodies; and
• provide for matters connected therewith.

According to the bill’s memorandum, the deposit insurance premiums will be imposed on members of the Corporation for Deposit Insurance.

These include licensed banks, mutual banks, co-operative banks and branches of foreign banks that conduct business in South Africa.

“The deposit insurance premiums would help to ensure that holders of covered deposits at a member of the Corporation will have access to their funds; to limit severe financial hardship for depositors; and to limit the exposure of public funds to the cost of a failure of a member of the Corporation.”

Public hearings on both bills were held in May 2022.

The standing committee on finance adopted both bills with amendments.

The select committee on finance will process the bills.