BANKS: DRAFT DIRECTIVE ON LARGE EXPOSURES OUT FOR COMMENT

BANKS: DRAFT DIRECTIVE ON LARGE EXPOSURES OUT FOR COMMENT

• 19 May 2025
• Financial Sector
• SA Legal Academy

The Prudential Authority has called for input by 26 June 2025 on a draft directive under the 1990 Banks Act affecting the approval of large exposures, as well as matters related to their measurement and control.

The proposed new directive will apply only upon operationalisation of amendments to regulations on market risk framework requirements impacting large exposures. This is in the context of the Basel Committee on Banking Supervision’s ‘ relevant revised framework’.

Against that backdrop, the draft directive seeks to prescribe:

• the composition of the committee appointed by a bank’s board of directors to attend to these matters
• factors determining when an exposure should be considered ‘large’
• limitations on large exposures
• the treatment of revised market risk
• the obligations of:
  • subsidiaries
  • domestic systemically important banks and financial institutions, and
  • globally systematically important banks
• the treatment of inter-day exposures
• monitoring and managing inter-bank exposures
• obligations in the context of intra-group exposures
• reporting obligations of a bank controlling company’s foreign subsidiaries and branches, and
• the treatment of large exposures limit breaches.

Please click the links below for more information:

• draft directive
• annexure

Published by SA Legal Academy Policy Watch

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