Financial sector reforms

Synthetic Financial Centre

Upgrade and rollout of digital identity verification system

The reform includes a national smart ID rollout, biometric verification, digital onboarding and integration with banks and government services.

New requirements for cybersecurity resilience, eg, all financial institutions to adopt robust cybersecurity, risk management and incident response frameworks

The Joint Standard on Cybersecurity and Cyber Resilience (effective June 2025) sets minimum requirements for governance, incident response, employee training, and third-party risk.

Comprehensive review and overhaul of the regulatory framework for the distribution of funeral insurance

Funeral insurance is the most widely held insurance product in SA, making this reform socially and economically important. The review is a comprehensive overhaul, with stakeholder workshops, regulatory gap analysis and a draft framework focused on compliance and consumer empowerment. The focus is on protecting vulnerable consumers, supporting small businesses and ensuring fair market practices.

National Treasury and Stats SA are implementing new data collection protocols, digital platforms and legislative reforms to modernise the national statistics system

The reform includes new digital platforms, improved data frames, legislative updates and international collaboration for better data quality and compliance.

Include AI governance principles in the Joint Standard on Culture and Governance with a financial sector focus.

The reform establishes high-level governance, ethical and risk management principles for AI, with a draft national policy framework and sector-specific standards in development. The Department of Communications & Digital Technologies (DCDT) released a draft National AI Policy Framework in August 2024.

Implementation of regulatory reporting requirements for margin on non-centrally cleared OTC derivatives, using the Umoja platform to submit returns

The Umoja platform enables automated, integrated regulatory reporting for margin requirements, replacing interim systems and supporting compliance with G20/BCBS standards.

Transitioning cash market products (loans, bonds, money market instruments) from JIBAR to ZARONIA by defining a fallback methodology: compounded ZARONIA + credit adjustment spread (CAS)

The reform adopts a compounded ZARONIA plus credit adjustment spread (CAS) fallback, with ISDA protocols and cash market conventions to guide the transition.

Develop a national green finance classification system

The taxonomy framework was piloted in Q1 2025 with key institutions. A broader rollout is planned to align South Africa with global sustainability standards.

Extension of market abuse rules to new asset classes as part of market integrity reforms.

The reform enhances penalties, executive accountability, surveillance and regulatory guidance, with expansion under the COFI Bill.

SARB empowered to manage systematically important financial institutions (SIFIs) failures.

The Corporation for Deposit Insurance (CODI) is operational, with premium collection commencing from April 2024 and resolution protocols in place, aligning South Africa with global best practices.

Mandatory task force on climate-rated financial disclosures (TCFD) reporting

South Africa’s climate-resilient investment framework provides policy guidance, incentives for green finance and a taxonomy for sustainable investment, with pilots under way and integration into fiscal planning. Banks are required to comply by 2026 and insurers by 2027. A pilot programme with 12 institutions was completed in November 2024.

Modernise forex system for trade and investment to align with OECD code of liberalisation

Modernising South Africa’s foreign exchange controls involves phased liberalisation of forex regulations, regulatory updates and alignment with the OECD code and AfCFTA requirements.

New standards for exchanges and market infrastructures.

The reform introduces new standards for exchanges, clearinghouses and market infrastructures, with a focus on interoperability and risk management. Finalisation is expected in 2025.

Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

The reform involves amendments to the NPS Act, expanding non-bank access, supporting digital payments and enhancing security and competition. For the reform to succeed requires partnerships with telecommunication companies. Technical specs were published in December 2024. Eight banks are currently participating in a digital pilot programme.

Improving credit information and reporting through national credit bureau and data-sharing reforms.

The reform includes developing a public credit registry, new data-sharing protocols and a business credit reporting ecosystem for MSMEs. It may require regulatory changes over the short term and legislative changes over the long term to accommodate credit data for micro, small and medium enterprises (MSMEs).

Implementation of Basel III reforms to enhance risk sensitivity, granularity and consistency in credit risk calculations

The reform introduces revised risk weights, output floors and phased implementation for banks, with full compliance required by July 2025.

Replace all previous operational risk capital approaches (advanced measurement approach and three standardised approaches) with a single, risk-sensitive standardised approach for all banks

The new framework bases capital on business indicators and historical loss data, with compliance effectively required by July 2025. The new approach is expected to improve risk management and sector resilience.

Implementation of the Basel III revised leverage ratio, including an updated exposure definition to better capture both on- and off-balance sheet risks.

The reform updates the exposure definition and introduces a leverage ratio buffer for D-SIBs (domestic systemically important banks), aligns with BCBS refinements (eg, derivatives, SFTs) and enhances disclosure requirements. In addition, it adjusts the calculation of leverage ratio for banks. This is progressing with implementation under way (deadline mid-2025).

New reporting requirements and supervision.

The reform introduces new prudential standards, CODI contributions and updated reporting, with ongoing review of the Mutual Banks Act. This enhances monitoring and guidance for mutual banks.

Corporation for Deposit Insurance (CODI)

CODI is one of a number of Twin Peaks regulatory reforms introduced after the 2008–09 global financial crisis. It is part of the wider financial sector safety net that includes the Prudential Authority (PA), which supervises financial institutions; the Financial Sector Conduct Authority (FSCA) that ensures that financial institutions treat their customers fairly and transparently;…

Capital flows management framework review; fostering business growth and promoting investment in the region.

Unlisted companies and licensed private equity funds are currently allowed to invest offshore up to the limit of R5bn, in line with foreign direct investment. More than R5bn requires SARB approval. Overarching reforms to South Africa’s foreign exchange system include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised…

Consolidation of four ombuds offices into a single redress system.

Restructuring the Gold and Foreign Exchange Contingency Reserve Account to manage forex reserves and reduce government borrowing.

The reform introduced a new settlement framework for the Gold and Foreign Exchange Contingency Reserve Account (GFECRA), allocating R250bn between the SARB and National Treasury to stabilise public finances and improve transparency. COMPLETE: We stopped tracking this reform at end-June 2025 as The GFECRA settlement framework reform has been fully completed as planned with the…

Enact COFI Bill to harmonise market regulation

The COFI Bill replaces a patchwork of legacy laws with a single, comprehensive framework for market conduct, aligning South Africa with global “Twin Peaks” standards and enhancing regulatory clarity.

Regulation of fintech, crypto assets and digital payment providers

This reform creates a regulatory framework for crypto assets, mandates licensing for virtual asset service providers (VASPs) and introduces interim anti-money laundering rules, with stablecoin and decentralised finance (DeFi) policy development under way.

Risk-based supervision and capital adequacy reforms through enhanced monitoring, stress testing and reporting

The reform involves phased implementation of Basel III/IV, enhanced stress testing and strengthened supervision for banks and insurers, with a focus on systemic risk and depositor protection.

Strengthening governance and investment oversight in pension funds through new standards and proactive supervision

The reform introduces new conduct standards, proactive supervision, and a phased transition of prudential oversight from the FSCA to the Prudential Authority by March 2026.

Strengthening liquidity support for banks through enhanced assessment and support mechanisms

The revised emergency liquidity assistance (ELA) framework introduces new internal guidance, improved assessment protocols and operational enhancements, with further legal alignment in progress.

Move to new benchmark rate for money markets by phasing out JIBAR benchmark rate.

The reform involves a phased transition plan, industry consultation, with International Swaps and Derivatives Association (ISDA) fallback protocols and new conventions for cash market instruments, with JIBAR set to cease by December 2026.

Tokenisation (aka Blockchain)

Tokenisation could enhance access to funds, improve transparency and accountability, and increase foreign direct investment. Other African countries like Nigeria, Ghana and Kenya are exploring tokenisation for debt management, which is why South Africa is also evaluating the platform. The MTBPS only briefly addressed digital asset regulation, despite recent steps in licensing some crypto asset…

Supporting SMEs through payments innovation

Financial inclusion for SMEs through payments innovations in South Africa involves leveraging technology and new payment methods to provide these businesses with access to financial services that were previously inaccessible or difficult to obtain. This would help SMEs grow, manage their finances more efficiently and integrate more fully into the formal economy. The SME sector…

Two-pot system/early access to retirement funds

The two-pot system is operational, having been effected on 1 September 2024 following the signing of the Pension Funds Amendment Bill and the Revenue Laws Amendment Bill into law. The two-pot system allows retirement fund members to make withdrawals from their funds while they are still active members by providing more frequent access to a…

Unclaimed assets – existing unclaimed retirement fund benefit provisions

Discussions and initiatives concerning unclaimed assets have been ongoing for several years, with increased attention placed on this issue in recent times to ensure proper management and safeguarding of unclaimed funds. In 2022, the FSCA published a discussion paper which made 13 recommendations, including mitigating the accumulation of unclaimed assets, establishing a shared understanding of…

National Treasury’s financial inclusion policy

The objective of financial inclusion for individuals in a country like South Africa is to ensure that all individuals and businesses have access to useful and affordable financial products and services that meet their needs. This includes transactions, payments, savings, credit and insurance, delivered in a responsible and sustainable way. In 2024, an intra-government financial…

Improved access for SMEs, diversification, innovation, competitiveness

In South Africa, financial inclusion is centred around ensuring that all individuals and businesses have access to useful and affordable financial products and services that meet their needs. This includes transactions, payments, savings, credit and insurance, delivered in a responsible and sustainable way. Assessing the state of financial inclusion in SA and providing principles to…

Crypto asset policy.

The Intergovernmental Fintech Working Group conducted research to introduce Stablecoins in 2024. The Financial Intelligence Centre (FIC) and Financial Services Conduct Authority (FSCA) are working to improve enforcement of unlicensed providers. Government is considering requiring crypto assets transactions exceeding R49,999 be reported to the FIC.