Regulatory updates and industry news - February 2026

Strengthening South Africa’s AML/CFT Framework

The National Treasury has published the Draft General Laws (AMLCTF) Amendment Bill.pdf Draft General Laws (AML/CFT) Amendment Bill, 2025 for public comment until 13 February 2026. Building on the 2024 draft, the Bill aims to strengthen South Africa’s AML/CFT framework ahead of the FATF Mutual Evaluation (2026–2027). Developed with key departments, the FIC, and regulators, it proposes amendments to four laws:

• FIC Act, 2001 – Minister of Finance
  
• FSRA, 2017 – Minister of Finance
  
• Companies Act, 2008 – Minister of Trade, Industry and Competition
  
• NPO Act, 1997 – Minister of Social Development

The focus is on closing regulatory gaps, enhancing supervisory powers, and improving enforcement.

Key amendments

• FSRA: Expands definitions of financial products/services, grants regulators licensing powers for specific activities, and targets platform investments and tech-enabled financing.
  
• FIC Act: Extends record-keeping from 5 to 7 years, strengthens RMCP obligations, and enhances FIC powers to request information and conduct lifestyle audits.
  
• Companies Act: Allows deregistration and administrative penalties for non-compliant companies.
  
• NPO Act: Expands oversight, enforcement powers, and introduces administrative sanctions to prevent illicit financing.

Takeaway for FSPs:

Review Risk Management and Compliance Programmes (RMCPs), record-keeping practices, and risk frameworks to ensure readiness for enhanced supervisory scrutiny.

High Court clarifies debarment standards

The Johannesburg High Court recently reviewed a case involving the debarment of a former financial services representative, placing the spotlight on the legal standards used to determine whether an individual meets the “fit and proper” requirements under the FAIS Act.

The Court set aside the Financial Services Tribunal’s (FST) decision that had overturned Beverley Dabrowa’s debarment, finding that the Tribunal had applied the wrong legal approach. Dabrowa, a former representative of PBA Financial Services, was debarred for failing to disclose referral arrangements and commission income, but the FST had framed the issue narrowly as a contractual dispute and concluded that debarment was unjustified.

The Court emphasised that debarment inquiries must assess fit and proper requirements, including honesty and integrity, beyond mere statutory or contractual breaches, and remitted the case to the Tribunal for reconsideration by a differently constituted panel.

Takeaway for FSPs:

Debarment decisions must be grounded in honesty, integrity, and regulatory compliance, not purely contractual disagreements.

Key compliance reminder: B-BBEE reporting

The Financial Sector Transformation Council (FSTC) has set 27 February 2026 as the deadline for financial sector entities to submit their 2025 B-BBEE compliance reports.

Reporting requirements vary according to turnover and black ownership, ranging from sworn affidavits for smaller entities to verified B-BBEE certificates and scorecards for larger institutions. Non-compliance may result in a one-level downgrade in the next B-BBEE rating.

Takeaway for FSPs:

Ensure timely and accurate submission of reports to maintain compliance.

Prudential authority publishes life insurance sector risk assessment

The Prudential Authority (PA) has released its third Life Insurance Sector Risk Assessment (SRA) covering the period from January 2022 to December 2024. The assessment evaluates how life insurers may be vulnerable to financial crime, using a combination of national risk data, stakeholder input, reporting statistics, and open-source information.

Key findings indicate that the sector’s inherent Money Laundering (ML) risk is medium-high, Terrorism Financing (TF) risk is medium-low, and Proliferation Financing (PF) risk is low.

While insurers and the PA have introduced controls, such as market-entry oversight, inspections, remediation, sanctions, and awareness initiatives, to mitigate these risks, the SRA found ML controls are adequate, while TF and PF controls remain weak. As a result, the residual ML risk is medium, TF risk is medium-low, and PF risk is low.

Life insurers are encouraged to align their risk management and compliance programmes with the identified higher-risk areas to ensure effective mitigation and ongoing vigilance.

Final thoughts

The South African financial services landscape is evolving, with regulators raising the bar on governance, transparency, and risk management.

FSP’s that stay informed, strengthen their risk frameworks, and embed robust compliance practices will not only meet regulatory expectations but also safeguard their clients, protect their reputation, and position themselves for sustainable growth in an increasingly scrutinised environment.

Regulatory change is inevitable; being unprepared is optional.