BENEFICIAL OWNERS: DRAFT JOINT STANDARD OUT FOR COMMENT

BENEFICIAL OWNERS: DRAFT JOINT STANDARD OUT FOR COMMENT

• 17 August 2026
• Financial Sector
• SA Legal Academy

The Prudential Authority and Financial Sector Conduct Authority have called for input by 25 September 2026 on a joint draft standard on the requirements to be met by the beneficial owners of financial institutions, as well as the institutions themselves. This is in the context of the requirements of the 2017 Financial Sector Regulation Act, as amended – and noting that, according to an accompanying statement of need:

• ‘beneficial ownership structures may be used to obscure the true identity of the natural persons who ultimately control a financial institution or influence its actions and decisions, whether directly or indirectly’, and that
• ‘this opacity can be exploited by criminals to raise, move, store and disguise illicit funds’.

Against that backdrop, the draft joint standard seeks to:

• ‘subject beneficial owners to … honesty and integrity requirements’
• ensure that financial institutions:
  • ‘establish sound and robust governance policies, processes and procedures for managing risks with regard to beneficial owners’
  • ‘take reasonable steps to identify, verify and record … (their) beneficial owners’
  • regularly review the status of their beneficial owners, and
  • report beneficial owner information to the authorities, and to
• clarify:
  • the meaning of ‘ultimate ownership’ and ‘effective control’, and
  • which persons are excluded from the definition of beneficial owner under the Act’s sub-section 159A(1).

While the draft joint standard could potentially improve trust in South Africa’s financial system domestically and globally, the statement of need acknowledges that it will have compliance and administration-related cost implications for affected financial institutions.

The public consultation process is expected to assist the authorities in quantifying these and arriving at an ‘appropriate balance’ between risk mitigation and ‘undue regulatory burdens’.

• draft joint standard
• statement of need
• joint notice
• Act (updated, SAFLII)

Published by SA Legal Academy Policy Watch

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