Financial Institutions Amendment Act
REGISTRAR SUPREME COURT
22 -06-1982
CAPE TOWN/KAAPSTAD
GRIFFIER HOOIJGEREGSHOF
STAATSKOERANT
VAN DIE REPUBLIEK VAN SUID-AFRIKA
REPUBLIC OF SOUTH AFRICA
GOVERNMENT GAZETTE
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KAAPSTAD, 9 JUNIE 1982
CAPE TOWN, 9 JUNE 1982 [No. 8240
KANTOOR VAN DIE EERSTE MINISTER OFFICE OF THE PRIME MINISTER
No. 1123. 9 Junie 1982. No. 1123. 9 June 1982.
Hierby word bekend gemaak dat die Staatspresident sy ~oedkeuring geheg het aan die onderstaande Wet wat ~ierby ter algemene inligting gepubliseer word:-
It is hereby notified that the State President has assented to the following Act which is hereby published for general information:-
No. 82 van 1982: Wysigingswet op Finansiele Insteilings, No. 82 of 1982: Financial Institutions Amendment Act, 1982. 1982.
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.
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GOVERNMENT GAZETTE, 9 JUNE 1982 No. 8240 3
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1982 Act No. 82, 1982
GENERAL EXPLANATORY NOTE:
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J Words in bold type in square brackets indicate omissions from existing enactments. ·
Words underlined with solid line indicate insertions in existing enactments.
ACT To amend the Insurance Act, 1943, so as to make further provi-
sion regarding the assets to be held by an insurer; to amend the Stock Exchanges Control Act, 1947, so as to reduce the minimum number of members of which a stock exchange shaD consist; to grant legal personality to a licensed stock ex- change; to amend the rules of a stock exchange regarding the buying and selling of listed securities by stock-brokers; and to delete certain provisions which have lapsed; to amend the Pension Funds Act, 1956, so as to make further provision re- garding the assets to be held by a registered fund; to amend the Inspection of Financial Institutions Act, 1962, so as to alter a reference in the definition of "registrar"; to amend the Banks Act, 1965, so as to further define the expression "liquid assets"; and to further regulate the holding of cer- tain prescribed investments; to amend the Building Societies Act, 1965, so as to further define the expression "liquid as- sets"; and to further regulate the holding of c.ertain pre- scribed investments; and to provide for matters connected therewith.
(Afrikaans text signed by the State President.) (Assented to 1 June 1982.)
BE IT ENACTED by the State President and the House of Assembly of the Republic of South Africa, as follows:-
1. Section 17 of the Insurance Act, 1943, is hereby amended- ( a) by the substitution in paragraph (b) of subsection (2)
for the words preceding subparagraph (i) of the follow- ing words:
"The assets last mentioned in paragraph (a) shall, subject to the provisions of subsections (2A) and (3), include bills, bonds or securities issued or loans entered into in terms of section 19 of the Exche uer and Audit
ct, 1975 Act No. 66 of 1975), and such other bills, bonds or securities issued by or loans to the Govern- ment of the Republic as were held by the domestic in- surer on the date of commencement of the Financial Institutions Amendment Act, 1982, having an aggre- gate value not less than-"; and
(b) by the substitution for paragraph (c) of subsection (5) of the following paragraph:
"(c) The assets of the kinds mentioned in Part I of the Third Schedule and required to be held in terms of paragraph (a), shall include bills, bonds or securi- ties issued or loans entered into in terms of the Ex-
Amendment of section 17 of Act 27 of 1943, as substituted by section 12 of Act 10 of 1965 and amended by section 4 of Act 41 of 1966, section 2 of Act 91 of 1972, section 6 of Act 101 of 1976, section 3 of Act 94 of 1977, section 2 of Act 80 of 1978, section 4 of Act 103 of 1979 and section 2 of Act 36 of 1981.
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GOVERNMENT GAZETTE, 9 JUNE 1982 No. 8240 5
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1982 Act No. 82, 1982
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chequer and Audit Act, 1975 (Act No. 66 of 1975), and such other bills, bonds or securities issued by or loans to the Government of the Republic as were held by the domestic insurer on the date Of commencement of the Financial Institutions Amendment Act, 1982, having an aggregate value not less than fifteen and one-half per cent of the aggregate value of the assets required to be held in terms of paragraph (b) of subsection (4).".
2. Section 18 of the Insurance Act, 1943, is hereby amended- Amendment of (a) by the substitution in paragraph (b) of subsection (2) ~~~~; ;: 1~~3 ,
for the words preceding subparagraph (i) of the follow- as substituted by ing words: section 13 of
"The assets last mentioned in paragraph (a) Act 10 of 1965 shall include .::b.;;il.;;ls;.,;,;..· b;.,o;.,n.;;d.;;s;;....;o;_;;r,_-;.se;..c;;,;u:;;;n;.,·t;;,ie;;,;s~is~s~u~e.;;d~or and amended by :- section 5 of loans entered into in terms of section 19 of the Ex- Act 41 of 1966, chequer and Audit Act, 1975 (Act No. 66 of 1975), ~~~~f ~f ~f972, and such other bills, bonds or securities issued by section 7 of or loans to the Government o. f the Republic as Act _101 of 1976,
- section 4 of were held by the foreign insurer on the date of Act94 of 1977, commencement of the Financial Institutions ~~~~0 ~f ~~78 , Amendment Act, 1982, having an aggregate value section 5 of not less than-"; and Act 103 ?f 1979
(b) b h b . . & h () f b ·. (S) andsectlon3of y t e su stltutlon .or paragrap c o su section Act 36 of 1981. of the following paragraph:
"(c) The assets of the kinds mentioned in Part I of the Third Schedule and required to be held in terms of paragraph (a), shall include bills, bonds or securi- ties issued or loans entered into in terms of.section 19 of the Exchequer and Audit Act, 1975 (Act No. 66 of 1975), and such other bills, bonds or securi- ties issued by or loans to the Government of the Republic as were held by the foreign insurer on the date of commencement of the Financial Insti- tutions Amendment Act, 1982, having an aggre- gate value not less than fifteen and one-half per cent of the aggregate value of the assets required to be held in terms of subsection (4).".
3. Section 3 of the Stock Exchanges Control Act, 1947, is 40 hereby amended by the substitution in subsection (1) for the
word "forty" of the word "thirty".
Amendment of section 3 of Act 7 of 1947, as substituted by section 5 of
4. Section 4 of the Stock Exchanges Control Act, 1947, is hereby amended by the substitution in paragraph (b) of subsec- tion (1) for the word "forty" of the word "thirty".
Act 86 of 1971.
Amendment of section 4 of Act 7 of 1947, as substituted by section 6 of Act 86 of 1971.
45 5. Section 6 of the Stock Exchanges Control Act, 1947, is Amend~e~t of hereby amended by the substitution in paragraph (a) of subsec- ~~:~~~f 1~47 tion (1) for the word "forty" of the word "thirty". as substituted by
section 8 of
6. (1) The following section is hereby inserted in the Stock Ex- changes Control Act, 1947, after section 6:
50 "Licensed 7. 1 A stock exchan e shall as from the date on stock ex- changeshall be a corpor- ate body.
Act 86 of 1971.
Insertion of section 7 in Act 7 of 1947.
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GOVERNMENT GAZETTE, 9 JUNE 1982
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FINANCIAL INSTITUTIONS AMENDMENT ACT, 1982
alienating property and, subject to the provisions o this Act, of doing all such things as may be necessary for or incidental to the exercise of its powers or the performance of its functions in terms of its rules.
(2) A licensed stock exchange which at the com- mencement of the Financial Institutions A!I1endment Act, 1982 (hereinafter in this section referred to as the effective date), is not a corporate body, shall with effect from the effective date be deemed to be a corporate body.
(3) When an association of persons, being a li- censed stock exchange, becomes a corporate body in terms of subsection (2)- (a) any committee which managed the affairs o
such association shall become a committee o such corporate body and shall manage the affairs of the corporate body;
(b) the rules and regulations of the association and any directives. and decisions of its committee in force immediately prior to the effective date shall be binding upon the members of the cor- porate body, its committee and any other person to whom such rules, regulations, directives o decisions applied immediately prior to the effec- tive date;
(c) all the securities, cash, other assets, rights, liab- ilities and obligations of the association and its members in their capacity as such (including any assets held in trust for the association or its members in their capacity as such by any per- son) shall become the securities, cash assets, rights, liabilities and obligations of the corporate body without the payment of any duty or fee;
(d) all agreements and transactions entered into, and documents made, drawn up or executed by, with or in favour of the association and in force immediately prior to the effective date, shall as from such date be deemed to have been entered into, made, drawn up or executed, as the case may be, by, with or in favour of the corporate body;
(e) every Registrar of Deeds in whose deeds registry property or other rights are registered in the name of or in favour of any person or persons on behalf of the association or its members as such, shall on production to him of- (i) the title deed or other deed or document in
question; and (ii) the current licence issued in terms of the
provisions of section 5, on such title deed or other deed or document and in his records make such endorsements and entries as may be necessary, as a result of the said association's becoming a corporate body, to effect or record the transfer of the said property or other rights to the corporate body.
(4) Except in so far as this section provides other- wise, the incorporation of an association of persons in terms of subsection (2) shall not derogate from the rights of any creditor or the liability of any debtor o such association.
( 5) If a stock exchange ceases to be a licensed stock exchange it shall be wound up in terms of its rules.".
65 (2) The provisions of subsection (1) shall come into operation on a date fixed by the State President by proclamation in the Gazette.
No. 8240 7
Act No. 82, 1982
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GOVERNMENT GAZETTE, 9 JUNE 1982 No. 8240 9
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1982 Act No. 82, 1982
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7. Section 8 of the Stock Exchanges Control Act, 1947, is hereby amended-
( a) by the substitution in paragraph (d) of subsection (1) for the words preceding subparagraph (i) of the follow- ing words:
"that a member who is a stock-broker does not di- rectly, on his own account, or on behalf of a com- pany in which he has an interest, or for the pur- poses of any arrangement to which he is a party, buy or sell listed securities other than listed bills, bonds and debentures and the securities referred to in section 2 (1) (c), except-"; and
(b) by the substitution for paragraph (i) of subsection (1) of the following paragraph: "(i) that every member who is a stock-broker provides
sureties or security to the satisfaction of the com- mittee of the stock exchange, in an amount of not less than eight thousand rand, for the discharge, during the first three years in which he is entitled to carry on business as a stock-broker [or, in the case of a person who is so entitled at the commence- ment of the Stock Exchanges Control Amendment Act, 1971, during such portion of that period as has not expired at such commencement], after he has been excussed, of his liabilities arising out of trans- actions entered into by him in respect of securi- ties;".
8. Section SA of the Stock Exchanges Control Act, 1947, is hereby amended by the substitution for subsection (1) of the fol-
30 lowing subsection: "(1) [As from the commencement of the Stock Exchanges
Control Amendment Act, 1971, a] A corporate body shall not be capable of becoming a member [, and, as from the 1st July, 1978, no such body shall remain a member,] of any
35 licensed stock exchange, unless it is a corporate body which is a private company having a share capital, incorporated and registered under the Companies Act, 1973 (Act No. 61 of 1973), and whose memorandum of association states that its directors and former directors shall be liable, jointly and
40 severally, together with the company, for such debts and li, abilities of the company as are or were contracted during their periods of office.".
Amendment of section 8 of Act 7 of 1947, as substituted by section 10 of Act 86 of 1971 and amended by section 8 of Act 80 of 1978.
Amendment of section 8A of Act 7 of 1947, as substituted by section 11 of Act 86 of 1971.
9. The following section is hereby substituted for section 8B of Sub~titution of the Stock Exchanges Control Act 1947· · section 8B of
' · Act 7 of 1947,
45 "Stock ex- SB. No natural person who is not a South African cbhanhg;e mfem- citizen shall become a member of a licensed. stock ex- ers tp o na-
tural persons. change [, and as from the 1st January, 1975, no natu- ral person who is not a South African citizen shall continue to be such a member].".
50 10. Section 8C of the Stock Exchanges Control Act, 1947, is hereby amended by the deletion of paragraphs (c), (d) and (e).
as inserted by section 12 of Act 86 of 1971.
Amendment of section 8C of Act 7 of 1947, as inserted by section 12 of Act 86 of 1971.
11. Section 16 of the Stock Exchanges Control Act, 1947, is Amendment of hereby amended by the substitution for paragraph (a) of subsec- ~~:i~~/r9~~. tion (2) o~ th_e following paragraph: . as substituted by
55 "(a) If, m the case of the Issue or renewal of any such h- section21 of cence under this Act, [or of the first renewal thereunder Act 86 of 1971. of such a licence held at the commencement of the Stock Exchanges Control Amendment Act, 1971,] such person has not deposited with the Treasury a sum of not less
60 than twenty thousand rand [, or, in the case of any other renewal, such person has not kept deposited with
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GOVERNMENT GAZETTE, 9 JUNE 1982 No. 8240 11
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1982 Act No. 82, 1982
the Treasury as from the date of such issue or first re- newal, as the case may be], until he has held the licence for three years [, the said sum,] and thereafter a sum of not less than twelve thousand rand, in cash or in securi-
5 ties approved by the Registrar, or in cash and in such securities, to be made available in the prescribed man- ner, after he has been excussed, for the discharge of any liability of such person arising out of any transac- tion entered into by him in respect of securities; or".
10 12. ·Section 21C of the Stock Exchanges Control Act, 1947, is Am~ndmentof her~by amend~d ?Y the substitution for subsection (3) of the fol- 't~:~~~fti.t~~ lowmg subsectiOn. as inserted by
"(3) Every stock-broker and carrier against shares shall section 1 of within thirty days [- Act 67 of 1973.
15 (a) of the date of commencement of this section, if prior to such date he appointed an auditor as contemplated in subsection (1); or
(b)] of the date of appointment of an auditor under this sec- tion,
20 [as the case may be,] apply to the Registrar for his approval of [the] ~ appointment [in question].".
13. Section 27 of the Stock Exchanges Control Act, 1947, is Am~ndment of her~by amend~d ?Y the substitution for subsection (3) of the fol- 't~~~~li9~~. lowmg subsection. as substituted by
25 "(3) Any regulation made under subsection (1) (c) shall section40of commence on a date fixed by the Minister [and which shall Act 86 of 1971. be a date not earlier than two years after the commencement of the Stock Exchanges Control Amendment Act, 1971].".
14. Section 19 of the Pension Funds Act, 1956, is hereby Am~ndment of 30 amended ?Y the s'!bstitution for the proviso to subsection (1) of 't~~~~ ~i\~~6 ,
the followmg proviso: · as amended by "Provided that a registered fund shall hold bills, bonds or section 13 of
securities issued or loans entered into in terms of section 19 ~~~i~~ ~f ~j59 • of the Exchequer and Audit Act, 1975 (Act No. 66 of Act 58 of 1966,
35 1975), together with such other bills, bonds or securities is- 't~!i~o ~f~~69 , sued by or loans to the Government of the Republic as were section 2 of held by the fund on the date of commencement of the Act23 of 1970• l"""=~:"l""'====~====~..-::~=;:;-=~--:-== section 7 of Financial Institutions Amendment Act, 1982, in an amount Act 91 of 1972, of not less than twenty arid one-half r,er cent of the aggre- ~~~fo/;f ~f976 ,
40 gate value of all the assets of the fund. . section 11 of Act 94 of 1977, section 11 of Act 80 of 1978, section 14 of Act 103 of 1979 and section 39 of Act 99 of 1980.
15. Section 1 of the Inspection of Financial Institutions Act, Amendment of 1962, is hereby amended by the substitution in the definition of ~cuzr \ ~~62 "registrar" for paragraph (a) of the following paragraph: as"!me~ded by
"(a) the Building Societies Act, [1934 (Act No. 62 of 1934)] section33of 45 1965 (Act No. 24 of 1965), means the registrar of build- Act43 of 1975,
. . . . d d . [t ] h f sectiOn32of
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mg societies appomte un er sectiOn wo ~ o Act 101 of 1976 that Act;", and section 15 of
Act 94 of 1977.
16. Section 1 of the Banks Act, 1965, is hereby amended- ( a) by the insertion in subsection (1) after paragraph (f) of
the definition of "liquid assets" of the following para- graph:
Amendment of section 1 of Act 23 of 1965, as amended by section 12 of Act 91 of 1972,
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FINANCIAL INSTITUTIONS AMENDMENT ACT, 1982 Act No. 82, 1982
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" A) stocks issued in terms of section 19 of the Excheq- uer an Audit Act, 1975 Act No. 66 of 1975), with a maturity, to the latest redemption date, of not more than three years;"; and
(b) by the substitution in subsection (1) for paragraph (g) of the definition of "liquid assets" of the following paragraph:
"(g) other stocks of the Government [with] held by the baiiking institution on the date of commencement of the Financial Institutions Amendment Act, 1982, and which on that date had a maturity, to the latest redemption date, of not more than three years;".
section 37 of Act 101 of 1976, section 18 of Act 80 of 1978, section 27 of Act 103 of 1979 and section 45 of Act 99 of 1980.
17. Section 18 of the Banks Act, 1965, is hereby amended by Amendment of 15 the substitution for the proviso to subsection (1) of the following ~~:i; ~l1~65 ,
proviso: as substituted by
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"Provided that of such prescribed investments ari amount section 15 of equal to not less than six and a half per cent of the said Act 91 of 1972 long-term liabilities shall consist of securities issued ~ :~~ti~~~~d;1 by terms of section 19 of the Exchequer and Audit Act, 1975 Act 94 of 1977 (Act No 66 of 1975) and which rank as a prescribed invest- and sectiOn 30 of · ' Act 103 of 1979. ment, or such other securities issued by the Government of the Republic as were held by the banking institution on the date of commencement of the Financial Institutions Amendment Act, 1982, and which rank as a prescribed in- vestment.".
18. Section 1 of the Building Societies Act, 1965, is hereby amended-
( a) by the insertion after paragraph (e) of the definition of
Amendment of section 1 of
30 "liquid assets" of the following paragraph:
Act 24 of 1965, as amended by section 1 of
"(eA) stocks issued in terms of section 19 of the Excheq- uer and Audit Act, 1975 (Act No. 66 of 1975), with a r;naturity, to the latest redemption date, of not more than three years;"; and
35 (b) by the substitution for paragraph (f) of the definition of "liquid assets" of the following paragraph:
"(f) other stocks of the Government [with] which the SOCiety held on the date of commencement of the Financial Institutions Amendment Act, 1982, and
40 which on that date had a maturity, to the latest re- demption date, of not more than three years;".
Act 64 of 1968, section 5 of Act 67 of 1973, section 54 of Act 101 of 1976, section 22 of Act 80 of 1978 and section 50 of Act 99 of 1980.
19. Section 32 of the Building Societies Act, 1965, is hereby Amendment of amended by the substitution for the first proviso to subsection section 32 of (1) of the following proviso: Act
24 of 1965, as amended by 45 "Provided that of such prescribed investments an amount section 19 of
at least equal to the percentage of the said liabilities which Act 91 of 1972 the Minister may from time to time prescribe. by notice in and section 22 of
Act 94 of 1977. the Gazette, subject to such conditions as he may deter- mine, shall consist, whether wholly as, or in accordance
50 with the ratio, determined by the Minister, of securities is- sued in terms of section 19 of the Exchequer and Audit Act, 1975 (Act No. 66 of 1975), which do not rank as liguid as- sets, or such other securities issued by the Government of the Republic as the Minister may determine and which do
55 not rank as liquid assets, or of stocks of, or loans to, a local authority in the Republic, or of debentures, bonds or se- curities issued by a public corporation in the Republic:".
20. This Act shall be called the Financial Institutions Amend- Short title. ment Act, 1982.