On 14 August 2026, the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA) (collectively referred to as the Authorities) published for public comment a draft Joint Standard entitled ‘Requirements pertaining to beneficial owners’ (draft Joint Standard), in terms of sections 107 and 159B(1) of the Financial Sector Regulation Act, 2017 (FSRA) read with sections 105, 106 and 159B(2) of the FSRA.
The draft Joint Standard applies to financial institutions as defined in the draft Joint Standard and to the beneficial owners of financial institutions, excluding a natural person who:
- acquired an ownership interest in a financial institution through listed securities as defined in section 1(1) of the Financial Markets Act, 2012;
- directly or indirectly acquired an ownership interest in a financial institution as a member of a pension fund as defined in section 1(1) of the Pension Funds Act, 1956 or an investor as defined in section 1(1) of the Collective Investment Schemes Control Act, 2002; or
- acquired an ownership interest in a financial institution through an employee share scheme as defined in section 95(1)(c) of the Companies Act, 2008.
The objectives of the draft Joint Standard include, inter alia, to subject beneficial owners to fit and proper (honesty and integrity) requirements, to ensure that financial institutions report beneficial owner information to the Authorities, to ensure that financial institutions establish sound and robust governance policies, processes and procedures for managing risks in relation to beneficial owners, to clarify the meaning of ‘ultimate ownership’ and ‘effective control’, and to clarify which persons are excluded from the definition of ‘beneficial owner’, as contemplated in section 159A(1) of the FSRA.
In terms of the draft Joint Standard, financial institutions are required to, inter alia:
- establish appropriate governance policies, processes and procedures to ensure compliance with the draft Joint Standard and to reflect how the relevant financial institution will comply with the draft Joint Standard;
- take all reasonable steps to adequately, actively and timeously identify, obtain relevant information regarding, and verify their beneficial owners;
- take reasonable steps to assess and confirm that their beneficial owners comply with the fit and proper (honesty and integrity) requirements set out in the draft Joint Standard;
- upon application for a licence or authorisation in terms of a financial sector law, provide the Authorities with the details of their beneficial owners; and
- after obtaining a licence or authorisation in terms of a financial sector law, notify the Authorities: (i) of a new or potential beneficial owner within 30 calendar days of the financial institution identifying such new or potential beneficial owner; or (ii) within 30 calendar days if a beneficial owner ceases to be a beneficial owner.
The Authorities envisage that the draft Joint Standard will contribute to combating financial crime in a substantial manner, to the benefit of South Africa as a whole. The Authorities further consider the draft Joint Standard to have the potential to build trust in the financial system (both from a local and an international perspective), thereby mitigating systemic issues, protecting consumers from financial crime and aligning South Africa with international standards, a critically important goal considering the Financial Action Task Force’s recent Mutual Evaluation Report on South Africa’s anti-money laundering and combating of the financing of terrorism system.
While the draft Joint Standard is expected to have several benefits, its implementation in current form will impact beneficial owners and financial institutions, including by increasing the compliance and administrative burden and cost on financial institutions, especially in respect of the required continued identification and verification of beneficial owners. Since the extent of the impact is difficult to quantify at this stage, the Authorities are inviting financial institutions to provide qualitative and quantitative input on the draft Joint Standard, through the public consultation process. This is to ensure that the draft Joint Standard, once implemented in final form, does not bring with it undue regulatory burden and/or barriers to entry, and that the regulatory requirements housed in the draft Joint Standard mitigate the risks identified by the Authorities in a balanced manner.
Comments on the draft Joint Standard must be submitted to the Authorities in writing on or before 25 September 2026, using the submission template available on the Authorities’ websites and sent to the following email addresses: FSCA.RFDStandards@fsca.co.za in respect of the FSCA and PAStandards@resbank.co.za in respect of the PA.
For ease of reference, the draft Joint Standard, supporting documents and the template for public comments are available here.
