We’re well and truly into 2026 and it’s proving to be an “interesting” year in the financial services industry given the shifting global economic landscape and South Africa’s small role in it (lest our politicians forget their very minor relevance on that scale).
As usual, we have summarised the events and legislation we think are useful.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)
FSCA website update
As many no doubt noticed, the FSCA updated its website during December. Nobody likes change, but it was obviously necessary and a step towards the promulgation of the Conduct of Financial Institutions (COFI) Bill.
We did notice some issues as it seems to have affected the FSCA database, and the FSCA has reverted to the ‘old’ system for now. We nonetheless expect the public view of the system to be amended.
It does appear that this has delayed the release of normal industry circulars and notices, but we’ll continue to monitor for any legislative amendments.
FINANCIAL INTELLIGENCE CENTRE
Extension for comments on the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill
National Treasury, no doubt realising the enormity of the legislation that requires comment, has extended the deadline for public and industry comments to 2 March 2026.
If it affects you, there’s still a chance to have your voice heard by submitting written comments to the National Treasury at commentdraftlegislation@treasury.gov.za.
PRUDENTIAL AUTHORITY (PA)
Draft Prudential Standard on funding and liquidity in resolution
The PA has released a draft Prudential Standard (RAXX) for consultation, issued under the Financial Sector Regulation Act, 2017 (FSRA). The proposed Standard outlines the principles and requirements that designated institutions must meet to ensure they can maintain sufficient funding and liquidity during a resolution scenario.
The draft sets out expectations for institutions to be able to estimate, monitor, and mobilise liquidity and funding needs under stress, relying primarily on internal resources and market-based funding. It further requires institutions to maintain appropriate governance frameworks, develop methodologies for liquidity forecasting in resolution, identify material liquidity entities and currencies, and address operational or legal impediments to accessing liquidity.
Additional provisions cover:
- Capabilities and systems to measure and mobilise liquidity quickly in resolution.
- Processes for planning potential access to temporary liquidity support from the South African Reserve Bank, including collateral readiness and repayment planning.
- Testing and assurance requirements, including regular stress testing, simulations, and independent review.
- Reporting obligations, which will be communicated via future PA notices.
Once finalised, this Standard will apply only to designated institutions, as determined under the FSRA.
Comments can be submitted using the official template and must be submitted to FST-RPD@resbank.co.za by 10 April 2026.
NATIONAL TREASURY
National Treasury updates financial sector levy schedule
National Treasury has issued a formal amendment to Schedule 1 (Table A) of the Financial Sector and Deposit Insurance Levies framework, updating the levy structure applicable to supervised financial institutions. The amendment was made with the concurrence of the PA and takes effect via Government Gazette notice dated 13 February 2026.
Levies continue to be calculated using a combination of fixed base amounts and size-based variable components.
Updated levy parameters are specified for: banks; life insurers and non-life insurers (including Lloyd’s operations and microinsurers); exchanges and market infrastructures; over-the-counter derivative providers; and the Road Accident Fund.
The amendment confirms the quantitative bases used for variable levy calculations, including:
- Banks: Total liabilities (as reported in regulatory returns or IFRS financial statements where returns are unavailable).
- Insurers and microinsurers: Gross written premiums, with tiered percentage factors applied below and above R60 million thresholds.
- Life insurers: Gross best estimate liabilities / technical provisions by line of business.
- Market infrastructures: Value or turnover of trades cleared, settled, or executed in the preceding quarter.
Certain minimum thresholds remain in place:
- No levy is charged for co-operative banks below R2 million in liabilities.
- No levy is charged for mutual banks below R3 million in liabilities.
SOUTH AFRICAN RESERVE BANK (SARB)
South African banking sector trends – December 2025 snapshot
The latest Selected South African Banking Sector Trends report for December 2025 shows continued balance sheet growth, solid capital and liquidity buffers, and stable profitability metrics across the sector, despite some moderation in efficiency and credit quality indicators.
Balance sheet growth
- Total banking sector assets and gross loans and advances increased year-on-year, with assets approaching the R9 trillion level by December 2025.
- Liabilities and deposits also expanded over the period, broadly in line with asset growth, indicating continued funding support from deposit bases.
- Off-balance sheet exposures and derivative positions remain material, highlighting ongoing market and structured finance activity.
Asset mix
- Lending portfolios remain dominated by traditional categories, including home loans, term lending, overdrafts, instalment debtors and commercial mortgages.
- Investment and trading positions, as well as derivative financial instruments, continue to represent a meaningful component of total assets.
Profitability and efficiency
- Profitability indicators remain resilient:
- Return on equity is reported around the mid-teens.
- Return on assets remains stable at about 1%.
- Net interest income and non-interest income both show year-on-year growth on a rolling 12-month basis.
- Efficiency metrics show some pressure:
- Expense growth has tracked close to or slightly above income growth in parts of the year.
- The cost-to-income and efficiency ratios indicate a mild deterioration compared to the prior period.
Liquidity and funding
- Liquidity positions remain strong across key measures:
- Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) remain comfortably above minimum regulatory thresholds.
- Liquid assets held continue to exceed minimum liquid asset requirements by a healthy margin.
- Funding profiles remain largely deposit-driven, with current, savings, call, and fixed/notice deposits forming the core of liabilities.
- Concentration metrics (such as the share of funding from the 10 largest depositors) remain elevated but broadly stable.
Capital adequacy and leverage
- The sector continues to report robust capital buffers:
- Total capital adequacy and Tier 1 ratios remain well above minimum requirements.
- Common Equity Tier 1 ratios show further strengthening year-on-year.
- The Basel III leverage ratio remains solid, indicating prudent balance sheet leverage.
Credit risk trends
- Impaired advances increased in absolute terms over the year.
- The ratio of impaired advances to gross loans and advances has edged higher but remains contained relative to total portfolios.
- Specific and portfolio credit impairment ratios suggest continued proactive provisioning, with no sign of systemic stress.
Overall outlook
The December 2025 data points to a stable and well-capitalised banking sector, with continued asset and loan growth, strong liquidity and capital positions, and steady profitability. However, rising impaired advances and softer efficiency trends suggest that cost control and credit risk management will remain key focus areas going into the next reporting period.
COUNCIL FOR MEDICAL SCHEMES (CMS)
Medical Schemes Act: Adjustment to broker fees
The Department of Health has published a Government Notice amending the fees payable to brokers under the Medical Schemes Act. The notice, issued in the Government Gazette on 27 January 2026, adjusts the prescribed broker remuneration applicable to medical schemes and intermediaries to R125.86.
Industry participants should review the amended fee structure and adjust existing arrangements, systems, and disclosures to members.
CMS Audit Quality Indicators for 2026
The CMS has released its final Audit Quality Indicators (AQIs) for 2026, which will guide the approval of external auditors in terms of the Medical Schemes Act. The AQIs aim to strengthen governance, enhance transparency, and improve audit quality across the medical schemes industry.
The indicators focus on two key dimensions:
- Audit firm independence and competence.
- Engagement partner and audit team quality.
The key elements of the indicators are:
Independence measures: Assessment of audit fee concentration, non-audit services, and audit tenure to identify potential threats to independence. The CMS is signalling plans to prohibit non-audit services by external assurance providers and introduce mandatory audit firm rotation.
Technical and industry expertise: Firms must demonstrate prior medical scheme audit experience, adequate technical resources (including IFRS 17 capabilities), actuarial support, and IT audit capacity.
Internal and external quality reviews: Audit committees must evaluate firms’ internal review results, Independent Regulatory Board for Auditors (IRBA) inspection outcomes, and related remedial plans.
Engagement partner oversight: Indicators include partner tenure, industry experience, training, resource allocation, workload, and IRBA review history.
Capacity and quality assurance: Emphasis is placed on appropriate staffing levels, partner and manager involvement, and alignment of planned hours with audit complexity.
The CMS has encouraged larger schemes to consider joint or shared audits to promote skills transfer and enhance audit quality. The AQIs provide structured, transparent criteria to support audit committees in appointing and evaluating auditors, with the overarching goal of improving assurance standards in the medical schemes sector.
A-PROOFED
I’m writing this from Australia, while visiting family.
Bryan is in South Africa.
Same hemisphere. Same season. The weather isn’t wildly different. The people are. The coffee culture definitely is.
Here, I drink a long black. In South Africa, it’s called an Americano. Same drink, different name. In Australia, it arrives in a solid ceramic cup with no handle, which still feels slightly unnecessary. You hold it carefully and hope for the best. But it’s excellent coffee. The Australians take it seriously.
Standards matter here.
They matter in business too.
Every month, without fail, the Omega Compliance Solutions Legislative Update lands in my inbox. Because of the time difference, this month’s words of wisdom arrived in the middle of my night, which is Bryan’s daytime. By the time I wake up in Australia and start working through it, he’s finishing his day in South Africa. A few hours later, after I’ve reviewed it carefully, it’s back in his inbox ready for him when he wakes up the next morning.
Different continents. Same process.
It’s a rhythm we’ve had for years. Being in Australia this month doesn’t change that.
And yet, proofreading is still one of those services people don’t think about until something goes wrong.
No-one reads a polished Legislative Update and thinks, “That link works beautifully.” They simply click it and expect it to open. They assume the name of the legislation is correct. They trust that the reference aligns exactly with the regulation being discussed.
That trust is built on details.
In compliance work, precision isn’t optional. A link that doesn’t work. The title of an Act that’s slightly off. A date that doesn’t quite align with the amendment being referenced. These aren’t dramatic mistakes, but they chip away at credibility. Quietly.
The challenge is that you can’t reliably proofread your own writing. Once you’ve worked closely with a document, your brain smooths over the rough edges. It sees what you meant to write. It assumes accuracy. We all do it.
That’s why I read Bryan’s update slowly. Line by line. I check links. I verify names. I question anything that feels even slightly unclear. Not to change his voice or dilute his expertise, but to make sure the final version reflects the precision his clients expect.
Proofreading isn’t about perfectionism. It’s about protection.
It protects credibility. It protects clarity. It protects the professional standard that Omega Compliance Solutions is known for.
From Australia, with a long black in a handle-less cup beside me, the work looks exactly the same as it does anywhere else. Bryan writes. I review. He sends. You receive something clear, consistent, and reliable.
You don’t see the small corrections. The tightened phrasing. The potential confusion that never makes it through.
And that’s the point.
Like good coffee, you don’t analyse why it works. You just know when it does.
If you want your documents to have the same quiet confidence, I can help. It’s the small details that make a big difference, and I make sure nothing gets overlooked.
Kim Hatchuel
083 657 3377 | kim@a-proofed.co.za
www.a-proofed.co.za
