Latest Articles

In mid-January 2019, the SARB published its Consultation Paper on Policy Proposals for Crypto Assets, amid a growing interest, investment and participation in crypto assets by financial institutions and individuals and an estimated market capitalisation of about US$200 billion for crypto assets globally. Crypto assets are digital representations or tokens that are accessed, verified, transacted and traded electronically by a community of users. The name is telling. The SARB classifies them as assets and…
The Companies Amendment Bill released on 21 September 2018 for public comment, proposes a raft of amendments to the Companies Act. Section 45 presently provides that any financial assistance granted by a holding company to its subsidiary must be authorised by the board and the shareholders by way of a special resolution. If not the transaction is void and unenforceable. The Bill proposes that subsections (2), and consequently subsections (3) and (4) of section 45…
The amendments proposed in the Companies Amendment Bill 2018 have caught the attention of financiers and attorneys in so far as the provision of financial assistance (e.g. providing a loan, guaranteeing a loan, and securing any debt or obligation), to ‘its own subsidiary’ is concerned. The Amendment Bill proposes to amend section 45 by removing the requirements of the shareholder and director approvals contemplated by sub-sections 45(2), (3) and (4) in the scenario where financial…
In our previous articles in this series we argued that banks can create new markets for themselves in trade finance by providing digitised letters of credit or trade finance instruments for the movement of both digital and physical goods using blockchain. We also highlighted the fact that Barclays, together with the Israeli start-up Wave, may have been the first organisations to execute a global trade and finance transaction using blockchain technology. Since then others…
In our last article in this series we argued that banks can create new markets for themselves in trade finance by providing digitised letters of credit or trade finance instruments for the movement of both digital and physical goods using blockchain. We likened the ease of transacting in this way to the simplicity of ordering a taxi service through Uber. It now seems that Barclays, together with the Israeli start up Wave, may have caught…
Uber’s success is that it made it as easy to order and pay for a ride as clicking a few buttons. It created a multi-billion dollar market that didn’t exist just a few years ago. Blockchain is a payment technology that enables people to automate functions that previously needed manual input and creates certainty without the need for a trusted intermediary. Whilst this challenges the traditional role of banks as trusted intermediaries, banks can create…
The Liquidity Coverage Ratio (LCR) was introduced with the implementation of Basel III, and is designed to ensure that financial institutions have the necessary assets on hand to ride out short-term liquidity disruptions. Two important elements of the LCR that are especially relevant to South African banks are: 1.   The LCR in South Africa was implemented on 1 January 2015. From that date: a.  undrawn commitments under swing-line, backstop or standby liquidity facilities that are…