Is it working?

The prudential‑strengthening agenda has substantially upgraded South Africa’s prudential framework, aligning it with global standards and embedding a risk‑based supervisory approach across sectors, which contributed to positive market perceptions and supported South Africa’s recent exit from the FATF grey list and improved sovereign‑risk metrics. The key challenges now are: completing the deposit‑taking framework review and proportionality agenda without undermining resilience; ensuring that Basel III implementation does not unduly constrain infrastructure and long‑term investment and extending robust prudential standards to retirement funds, CISs and other sectors in a way that remains practical for smaller entities.

Actions

Actions to date include: (i) publication of the PA Regulatory Strategy 2025–2030, which formalises prudential‑strengthening priorities and outcomes; (ii) issuance of multiple consultation papers and proposed standards (for example, on Basel III post‑crisis reforms, funding and liquidity in resolution, conglomerate supervision, and mutual‑bank directives) and the associated PA 2025–26 Budget Annexure outlining workplans; (iii) launch of the deposit‑taking framework review referenced in the 2026 Budget, aimed at simplifying and recalibrating requirements for smaller institutions; and (iv) ongoing PA industry engagements in 2026 - including sector‑specific sessions with co‑operative and other small deposit‑takers.

Are there plans?

Planned initiatives include: (i) completing the deposit‑takers framework review, which may reduce segmentation between banks, mutual banks and other deposit‑takers and embed a tiered, proportional approach; (ii) finalising Basel III post‑crisis elements and monitoring their impact, including on infrastructure finance; (iii) issuing prudential standards for retirement funds, CISs, friendly societies and medical schemes, and harmonising requirements across industries; (iv) strengthening prudential regulation and supervision of market infrastructures, in parallel with conduct reforms and the Financial Markets Act review; and (v) ongoing enhancement of AML/CFT supervision in coordination with FATF follow‑up work.
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Is it on the agenda?

The 2026 Budget Review emphasises that National Treasury and the PA are undertaking a deposit‑taking regulatory‑framework review to simplify oversight for smaller and less complex institutions, allow more flexible calibration of prudential requirements and support transformation, inclusion and competition, with completion targeted for 2026. It also notes joint work with industry to assess whether implementation of Basel Committee standards is affecting infrastructure finance and to engage the Basel Committee where necessary. National Treasury and the PA Strategy present these prudential reforms as central to maintaining financial‑sector resilience while supporting long‑term investment and growth.

Goals

To consolidate and enhance South Africa’s prudential regulatory and supervisory framework under Twin Peaks so that banks, insurers, conglomerates, retirement funds and market infrastructures are regulated in a risk‑based, proportional and globally aligned way that supports stability, competition and inclusion.

References

• Reference Link One
• Reference Link Two
• Reference Link Three

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)