Financial Institutions Amendment Act


Published: 1987-03-06

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Financial Institutions Amendment Act 6 of 1987
GOVERNMENT GAZETTE
OF THE REPUBLIC OF SOUTH AFRICA
. . . . . . . REPUBLIEK VAN SUID-AFRIKA
STAATSKOERANT· . ' . '
Registered at_thePost Office as a Newspaper . .
As 'n Nuusblad by die Poskantoot Geregistreer
VoL. 261
No.518.
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CAPE TOW!'l, 6 MARCH ~987
KAAPS':fAD1 6 MAART 1987: No. 10645
STATE PRESIDENT'S OFFICE KANTOOR VAN DIE STAATSPRESIDENT
· 6March1987 No.518. · 6 Maart 1987 ·
. It is hereby notified that the State President has Hierby word bekend gemaak dat die Staatspresident sy assented to the following Act which is hereby published goedkeuring geheg bet aan die onderstaande Wet wat
-fpr general infonnation:- hierby ter algemene inligting gepubliseer word:-
-fto. 6 of 1987: Financial Institutions Amendment Act, No. 6 van 1987: Wysigingswet op Finansiele Instellings, 1987. 1987.
Please note that most Acts are published in English and another South African official language. Currently we only have capacity to publish the English versions. This means that this document will only contain even numbered pages as the other language is
printed on uneven numbered pages.
2 No.10645 GOVERNMENT GAZElTE, 6 MARCH 1987
Act No. 6, 1987 FINANCIAL INSTITUTIONS AMENDMENT ACT, 1987
GENERAL EXPLANATORY NOTE:
[
. ... ·'
] Words in bold type in square brackets indicate omissions from existing enactments. · ·· ·
Words underlined with solid line indicate inser.tions in existing. enactments: : · ·
ACT . To amend the South African· Reserve Bank Act, 1944, so as to
empower the said Bank to appoint inspectors to inspect the affairs of a "banking institution" as defined in the Banks Act, 1965, a "mutual building society" as defined in the Mu- tual Building Societies Act, 1965, and a "building society" as defined in the Building Societies Act, 1986; to amend the
. Banks Act, 1965, so as to provide for the designation by the - Reserve Bank of a' Registrar and Deputy Registrar of Banks
and for the granting to the Registrar of powers to delegate; and to transfer to the Registrar certain administrative func- tions presently performed by the Minister; to amend the Mu· tual Building Societies Act, 1965, so as to provide for the granting to the Registrar of powers to delegate; and to pro- vide that certain functions shall be performed by the Regis- trar of Building Societies· instead of the Minister; 'to amend the Building Societies Act, 1986, so as to provide for the des· ignation by the Reserve Bank of a Registrar and Deputy Registrar of Building Societies and for the granting to the Registrar of powers to delegate; to amend the Inspection of Financial Institutions Act, 1984, so as to delete the express- ions "banking institution"' "mutual building society" and ' "building society" from the definition of "financial institu- tion" and to provide that the "registrar" as defined in the Act shall not have any powers in respect of the said bodies; to amend the Financial Institutions (Investment of Funds) Act, 1984, so as to provide that a "building society" in terms of the Building SoCieties Act, 1986, shall be a "financial institution"; to · provide that the powers of the Registrar of Financial Institutions with regard to the appointment of a curator may also be exercised by the Registrar of Banks and the Registrar of Building Societies; and to provide that cer-
- tain provisions regarding the admissibility or an affidavit shall also apply with regard to an affidavit made by an in- spector . appointed , by the South African Reserve Bank; to amend the Finance Act, 1978, so as to further empower the Minister of. Finance to, enter, into. agreements with insurers binding the Government to make payments to insurers in re- spect of certain losses; and to provide for matters in connec· tion therewith." ·· · · -· · · · · ' ·· · · · ··-
(Afrikaans text signed by the State President.) · (Assented to 2 March 1987.)
i . '· .:_.i .
4 No.10645·
Act No. 6, 1987
Amendment of section 8 of Act 29 of 1944,
· as amended by section 32 of Act 36 of 1950, section 3 of Act 87 of 1969, section2 of Act 49 of 1973 and section 1 of Act 47 of 1984.
Insertion of section SA in Act 29 of 1944.
Amendment of section 1 of Act 23 of 1965, as amended by section 12 of Act 91 of 1972, section 37 of Act 101 of 1976, section 18 of Act 80 of 1978, section 27 of Act 103 of 1979, section 45 of Act 99 of 1980, section 16 of Act 82 of 1982, section 20 of Act 46 of 1984, section 22 of Act 86 of 1984 and section 10 of Act 106of 1985.
Substitution of section3 of Act 23 of 1965.
GOVERNMENT GAZETTE, 6 MARCH 1987
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1987 ·
BE IT ENACTED by the State President and the Parliament . of the Republic()fSouth Africa, as .follows:--:
l. Section 8 of the South African Reserve Bank Act, 1944, is hereby amended by the addition t() subsection (1) of the follo'Y- ing paragraph: . .. : , . . · , . 5
"(p) exercise the powers assigned to the bank by the Banks Act, 1965 (Act No. 23 of 1965), the Mutual Building Societies Act, 1965 (Act No. 24 of 1965) and the Build- ing Societies Act, 1986 (Act No. 82 of 1986).".
2. The following section is hereby inserted in the South Afri- 10 can Reserve Bank Act, 1944; after section 8: "Appoint· SA. (1) The bank may appoint inspectors (in either mentofin· · a u -hme or a temporary capactty to carry out m- spector~.
spections of the affairs, or any portion thereof, of a . banking · institution ·as defined· in the . Banks Act, 15 . 1965 (Act No. 23 of1965), a mutual building society as defined in the Mutual Building Societies Act, 1965 (Act No. 24 of ·1965), and a · building soCiety as
· defined in the Building Societies Act, 1986 (Act No. 82 of 1986) . . : • · · · · · · 20 . (2) The provisions of the Inspection -of Financial .Institutions Act, 1984 (Act No. 38 of 1984), except
. sections 2 and 7, shall mutatis mutandis apply to an ·: inspection carried out in terms of subsection (1).
(3) Every inspector so appointed shall be furnished 25 . ; with a certificate stating that he has been appointed ~· · as an inspector under this Act.~·. · ' : . .'
·J. Section 1 ofthe Banks Act, 1965,' is hereby amended by the substitution for the definition of "Registrar" of the fol!owing de- finition: : · ·' ·· ' ' · · · ' · · ' · · · ' '· ·.
· ':'Registrar' means the Regist~ar of Banks [appointed] de- 30 · . signa ted in terms of section3;": . · " . · ., · · ' · -
· 4. The foJ!owing ~ection is. here~y sub~tituted for sec~ion of the Banks A_ct, 1965. . . . . . . .· . . . .
~~JEstr~~ · · ~ . 3. ( 1) There shall be an office ~n Pr:toria as part of Regist~~r Y · the Reserve Bank,, fo~ the regtstr~t10n of bankmg 35 ofBanks.' ' institutions and bank controlling companies and for
the administration of this Act, and [the Stat~ P~esi­ dent shall, subject to the laws governing . the public service, appoint] at the head of such office shall be [an officer] a person-to be styled the Registrar of 40 Banks, w,ho shall, subject to the approval of the Min- ister, be designated by the · Reserve Bank from among its officers or employees, and who shall per-
6 No.10645
Act No. 6, 1987
Amendment of section 4 of Act 23 of 1965, as amended by section 23 of Act 86 of 1984 and section 12 of Act 106 of 1985.
Amendment of section 16 of Act 23 of 1965, as substituted by section 13 of Act 91 of 1972 and amended by, section 4 7 of Act 99 of 1980 and section 21 of Act 106 of 1985. ·
Amendment of , section 35 of Act 23 of 1965.
j • • '
Insertion of section 3A in Act 24 of 1965.
. "\ ':
GOVERNMENTGAZETIE, 6 MARCH 1987
FINANCIAL INSTITUTIONS AMENDMENT ACf, 1987
fonn, under the control' of the said Bank and in accordance· ~ith the directions issued by that Bank from time to time and subject to appeal to the Mtms- ter, the functions assigned to him by this Act, · · (2) The [Minister] Reserve Bank may, subject to 5 the [laws governing the public service) approval of the Minister, · frorii among its officers or employees [appoint a] designate a person as Deputy Registrar of Banks, who may, subject to the control and direc- tions of the Registrar, do anything that may lawfully 10 be done by the Registrar. · · · .. ·
(3) The Registrar may with the approval of the Reserve Ban (a) delegate to an officer or employee of the Re-
serve Bank any power , conferred upon the 15 · . , Registrar by or under this Act; or · ·
(b) authorize any such officer or employee to per- form any duty· assigned to the Registrar by or under this Act. : . . . . .
(4) Any delegation under subsection (3) (a) shall 20 . not prevent the exercise of therelevant power by the Registrar himself.
[(3))J22 Every appeal to the. Minister in terms of ·' this section shall be noted and prosecuted in the · manner and within the time prescribed by regu- 25
lation. ". ' : . . ' . '
. 5. Section 4 of the Banks Act, 1965, is hereby amended by the
. substitution for subsection (1) of the following· subsection: · "(1) Any {>erson who intends to carry on the business of a banking instttution in the Republic, may apply to the Regis- 30 trar for permission to establish a bank or discount house, and the Registrar shall grant such permission if the appli-
.· cant satisfies him that the establishment of such institution will be in the public interest [and, where the proposed busi- ness is that of a discount house, furnishes proof to him that 35 the Reserve Bank will be prepared to recognize the applicant as a discount house].". · ' · '
6. Section 16 of the Banks Act, 1965, is hereby amended by the substitution for paragraph (b) of subsection (3) of the follow- ing paragraph: 40
"(b) Whenever the Governor of the Reserve Bank has made a determination under paragraph (a), [he shall inform the Registrar thereof in writing, and] the Registrar shall as soon as practicable give written notice of the deter- mination to every registered bank and cause the deter- 45 mination to be published by notice in the Gazette.".
7. Section 35 of the Banks Act, 1965, is hereby amended by the substitution for subsection (3) of the following subsection:
"(3) If the banking institution concerned fails to pay the remuneration of any auditor appointed under subsection (2) 50
. . )he [Minister] Registrar shall pay such rem~neration [out, of public funds] and the Registrar shall recover from that
. banking i~stitution an: amount equal to that remunera- .·tion.". . · · · · · ·
'8. The following section is hereby inserted in the Mutual 55 Building Societies Act,•1965; after sectiOn 3: · < "Registrar . .3A. (1) The registrar may with the approval of the may assign R B k certain func- eserve an tionsto (a) delegate to any officer or employee' of the Re- officers of· · · serve Bank any power conferred upon the regis- 60 Resekrye , ,J trar by or under this Act; or,· ... Ban .
(b) authorize.any such officer·or employee to per-
8 No.10645
Act No. 6, 1987
Amendment of section 67 of Act 24 of 1965, as amended by section 14 of Act 64 of 1968 and section 56 of Act 101 of1976.
Substitution of section4 of Act 82 of 1986.
Substitution of sectionS of Act 82 of 1986.
Substitution of section6 of Act 82 of 1986.
Amendment of section 1 of Act 38 of 1984, as amended by section 106 of Act 82 of 1986.
GOVERNMENTGAZETfE,6MARCH 1987
FINANCIAL INSTITUTIONS AMENDMENT ACf,1987
form any. duty assigned to the registrar by or under this Act.
(2) Any delegation under subsection (1) (a) shall not prevent the exercise of the relevant power by the
5 . registrar himself.": :
· 9. Section 67.' of the Mutual Building Societies Act, 1965, is hereby amended by the substitution for subsection (12) of the followin~ subsection: ' . . . . . "{12) In the.event of an appointment in terms of subsec-
tion (11) the registrar shall, in consultation with the auditor, 10 determine the remuneration to be paid to the auditor by the society for his services, and if the society fails to pay the re-
. ·· muneration the [Minister] registrar shall pay such remuner- .ation [out of public funds] and the registrar shall recover from the society an amount equal to that r~muneration. ". 15
10. The followin~ section is hereby substituted for section 4 of the Building Societies Act, 1986: . . . "Building So- 4. For the registration of building societies and ' cieties Office. control companies and for the other purposes of this
Act there shall be an office in Pretoria called the 20 Building Societies Office, ·and at the head of such office shall be a person to be styled the Registrar of Building Societies.".
11. The followin~ section is hereby substituted for section 5 of the Building Societies Act, 1986: . . . . . : , . 25 "Registrar and Deputy Re~istrar of Building Societies. '
5. 1 The Reserve Bank shall, subject to the ap- proval of the Minister, designate an o cer or em- ployee in its service as Registrar of Building Socie· ties; who shall perform, under the control of the said Bank and in accordance with the directions issued by that Bank from time to time, the functions assigned to the Registrar by or under this Act. · . · : (2) The Reserve Bank may, subject to the ap- proval of the Minister, designate an officer or em- ployee in its service as Deputy Registrar of Building 35 Societies, who shall, subject to the control and direc- tions of the Registrar, be competent to perform any function which the Registrar. is permitted or required to perform.~·. . . · . · .
·12. The following section is hereby substituted for section 6 of 40 the Building Societies Act, ·1986: · "R~gistrar 6: (1) The Registrar may with the approval of the may assign R B k certain func- eserve an - tions to of· (a) delegate to any officer or employee [in the pub· ~';~~~. lie service] of the Reserve Bank any power con- 45 Bank. ferred upon the Registrar by or under this Act;
or · . (b) authorize any such officer or employee to per-
form, any. duty assigned to the Registrar by or under this Act .. · · . · . 50
(2) Any delegation under subsection(!) (a) shall not prevent the exercise of the relevant power by the Registrar himself.".
'13.· Section .1 of the Inspection of Financial Institutions Act, 1984, is hereby amended- 55
· (a) by the deletion of paragraphs (d) and (e) of the defini-, tion of "financial institution"; and
(b) by the deletion ofparagraphs (d) and (e) of the defini- tion of "registrar".
10 No.10645
Act No. 6, 1987
Amendment of section 1 of Act39 of 1984.
Amendment of section 5 of ' Act39 of 1984.
Amendment of section 6 of Act 39 of 1984.
GOVERNMENTGAZETIE, 6MARCH 1987
FINANCIAL INSliTUTIONS AMENDMENTACf,l987
··14. Section·· f of the Financial Institutions (Investment of :Funds) Act, 1984, is herebyamended-:- .'. '. ·· · .
· (a) by the substitution for paragraph (e) of the definition of · · · "financial institution" of the following paragraph:
"(e) a mutual building society registered in terms of the 5 M'tituilHuilding .Societies Act, 1965 (Act, No.: 24
· of 1965), or a building society registered in terms .. of the Building Societies Act, 1986 (Act No. 82 of
· _._ 1986);"; and ·. · · · · · · . . . ' · · .. . (b) · by tlie msertion after the· de'finition 'of ''registered" of '10
· ' the following-definition: '. · • : · ·, ',. : '·: · · ··' ' · "'registrar' me'ans the ' registrar appointed under the
• I Acts referred to-m paragraph (a), (b), (c),.(d), (e) or ·(f), · as· the case may be, of the defimt10n of .. 'financialinstitution';".: : t' . . . . , 15
15. Section 5 of· the Financial· Institutions (Investment· of Funds) Act, 1984, is hereby amended- · .. : : ;. ·. : · ' -' ·
·'
.... '
(a) -by. the. substitution for . subsection (1) of.the following .; subsection: . _. · . ·., , . . .
• '.'(1) An inspector,appointed under, section 2 of the 20 . Inspection of Financial Institutions Act,.1984, may at
any.time.at the direction of the registrar of a financial [institutions] institution· referred to in the said Act, in- spect the affairs of a board of executors; trust company or .other company mentioned .. · in . paragraph. (g) of the 25 definition of 'financial institution~ in section l of thi~ Act, and of a 90minee COfilpany .controlled by [~] ~ fi~ancial_. institu,tio? in respect o'f. which. the registrar
;, concerned was appointed, ip rder tp a~certain w~ether . the provisions of , this · Act are being complied with."; 30
and .. , .. :· .. , ; . . · · (b) by the substitution for subsection (2) of the following
· subsection: ::· .-. · , ' · " ·. "(2) The registrar of..!. financial [institutions]~
: tion referred to in this Act may cause the affairs of any 35 ··company which he has · reasonable cause to believe
.. , holds or ~dmin.isters trust ·property, to be inspected in · ' · order to ascertain whether the ,provisions of this Act
' are applicable' ~oit .. " ~ . ' . . . . ' . . . . ' . . .. ·' . • ; • ; i .· ~; . : ; . ;
... 16. Section 6 of the Financial Institutions- (Investment of 40
Funds) Act, 1984, is hereby amended: (a) by _the substitution for. subsection(!) of. the ,following ' subsection: · • · · · · ·. .. · . ' . · . · . : _· ... : --;_· ...
." ' t
"(1) If as a result of an inspection of the affairs of a .:_ . . financial :institution' under any law, the registrar of a 45
financial [institutions] institution.is of .the opinion 'that it is for any reason desirable to do so, he may with~ut notice to the)inan~ial:institution concerned apply to a .
· division of · the' Supreme Court ' having jurisdiction (hereinafter referred to as the· court) for the appoinF ?O
'ment of a curator to' take control of and to manage the ' 'whole 'o{any part of the business of that financial insti- tution."; . '· .. : ..... . · · J.
' ·'(b) by the 'substitutio1i'for subsection (3) of the following · subsection·: ' ·: · • ' · · ;:. · ·· : : •' · ·· · 55
"(3) Upon the ·application of the financial institution the court may anticipate the return day if not less than
· 48 hours' notice of such, application has been given· to the registrar of that financial [institutions) institution.'~;
. and · . · :: · · .~ · · ·· . ·. • ; ' · ,. -. · '. 1 • ' 60 (c) by the substitution for. subsections (6), (7) and (8) of
· : the following subsections: . . · · · . · · "(6) The curator shall furnish the Jregistrar of~
12 No.10645
Act No. 6, 1987
Amendment of section 7 of Act 39 of 1984.
Amendment of section6of Act 94 of 1978, as amended by section 16 of Act 113 of 1984 and section 18 of Act 77 of 1986.
. GOVERNMENTGAZETIE, 6MARCH 1987
. FINANCIAL INSTITUTIONS AMENDMENT ACT, 1987
finanCial [institutions] institution· concerned with such information concerning the affairs of [the] !h.:!! financial institution as he may from time to time require, and shall give him notice of any application which he may
. , make to the court in terms of subsection (5). 5 ' (7) The registrar of~· financial [institutions]~
tion concerned is entitled to be heard personally or by a representative at any application· by the curator in terms .of subsection (5), and he may himself make an application to the court with reference to the control 10 and management of the business of [the] that financial
. institution by the curator. , ' · · - - (8) The curator is entitled to receive such remunera-
tion. out of the funds of the financial institution ~ . :~as the court may direct.". 15
17. The following section is .hereby substituted for section 7 of the Financial Institutions (Investment of Funds) Act, 1984: "Records and 7. The records of a financial institution and of a entries in ac- nominee company. or trust controlled or adminis- count books d b h · · · d h b k f f 20 admissible in tere y t at mstltutlon an t e oo s o account o evidence."'·· the institution; company or trust are, in any proceed-
, ···-·: ings under this Act, admissible as prima facie evi- dence of the matters, transactions and accounts . ·
, , therein recorded, on the production· of a~ document , ·,purporting to be an affidavit by one of the directors, 25 . . officials, employees or agents of the institution or ... company or by an inspector appointed under the In-
spection of Financial Institutions Act, 1984, or sec- . · · tion 8A of the ·South African Reserve Bani("""A'ct, ·
.1944 (Act No. 29 of 1944), ()r of other sufficient ev1- 30 '. dence, to the effect that those records or books of
account are or have been the ordinary records and · :books of account of the institution, company or trust
and that those records· have been kept or those en- tries have been made in the books of account in the 35 ordinary course of business.'_'.·
18. Section 6 of the Finance Act, 1978, is herebyamended- (a) by the substitutionfor paragraph (a) of subsection (1A)
of the following paragraph: · '"(a) No person, whether ·as insurer or insured,' shall 40
after the commencement of section 18 of the Fi- . nancial Institutions Amendment Act, 1987, within
. · ~r outside the Republic enter into an insurance contract in terms of which the insurer assumes the obligation in respect of property situated in the 45 Republic, . including ·the territorial waters of the
·Republic;· ·to indemnify, in · terms of the policy issued by virtue of such contract, the owner of
· . such policy against loss of or damage to property, including . consequential loss referred to in para- 50 graph (a) of subsection (1), unless-
(i) the insureris a registered insurer who has en- tered into an agreement contemplated in sub- section (1);or
(ii) the insurer referred to in subparagraph (i) has 55 · declared in writing that he is not prepared to assume such obligation or any, part of such ob- · ligation or any other obligation in connection
·. with. such property, whether on the conditions contemplated in such insurance contract or on 60 any other conditions."; and ~
14 No.10645
Act No. 6, 1987
Short ti tie and commencement.
GOVERNMENTGAZETIE, 6MARCH 1987
FINANCIAL INSTITUTIONS AMENDMENT AGr, 1987
(b) by the substitution for subsection · (2) of the. following subsection: ..
·' . ) ~ : - "(2) For the purpose of this section "loss of or dam-
·ageto property" means any loss of or damage, to prop- erty related to or caused by~ . 5
. , (a) any political riot or commotion; . (b) any insurrection, rebellion or revolution; (c) any labour unrest, strike or lock-out; ·
· · : i.
(d) any other act arising from, or caused by, any event referred to in paragraph (a), (b), or (c) committed 10
.. by any person or persons . with the intention to cause loss of, or damage .to property, excluding loss or damage directly related to or caused by theft or attempted theft;". · · ·
(e) any attempt to cause any event referred to in para- 15 graph (a), (b) or (c) or any attempt to commit any act referred to in paragraph (d); or
(f) any action of any lawfully established· authority in controlling, preventing, suppressing · or in ·any other way dealing with any event or act referred to 20 in paragraph (a), (b); (c), (d) or (e).".
19. (1). This Act shall · be called the Financiai Institutions Amendment Act, 1987, and shall come into operation on a date· fixed by the State President by proclamation in the Gazette.
(2) Different dates may be so fixed in respect of different pro- · 25 visions of this Act. ' ..

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