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The South African regulator of banks is committed to implementing Basel II in full. The Banks Amendment Bill, which mainly contains amendments required by Basel II, aims to create a sufficiently robust regulatory environment to enable the registrar of banks to regulate banks, controlling companies and banking groups on a standalone, cross-border or consolidated basis.
A large portion of the South African population has no access to banks or conventional bank accounts. This mass market of 'unbanked' people is being brought into the banking system by offerings of cellular-phone banking products. However, requirements under money-laundering and communications regulations will impede the provision of cellular-phone banking services to the unbanked population.
In any financing transaction, banks and other lenders seek to protect their financial exposure by taking some form of security. A 'contract of guarantee' has been defined as a "collateral engagement to answer for the debt, default or miscarriage of another person". It imposes an absolute liability on the guarantor.
The hedge fund industry in South Africa has been growing at a significant rate over the past few years. Regulatory frameworks should thus be implemented and are vital to ensure that the market evolves in a systematic and operationally efficient manner, which gives South Africa a competitive edge in the global market. This update reviews the current regulation of hedge funds in South Africa.
This update outlines securitization schemes and special purpose vehicles in South Africa. It also details the existing legislation and how proposed new regulations will affect securitization.
This case arose from an agreement of sale of a dwelling. The sellers allegedly delivered a notice to remedy breach by affixing a copy to the gate of the townhouse complex where the applicants lived. The court found that it was probable that the applicants did not receive the notice and that attachment of the notice to the gate was insufficient to constitute delivery for purposes of the agreement.
By far the greatest number of businesses are operated from rented premises. In every case there is a lease between a landlord and a tenant. From an evidential point of view, it is desirable that leases be set out in writing and signed by the parties. Customarily, landlords have standard forms of lease which are prepared on their behalf and are generally intended to protect their interests.
Fractional ownership is a relatively new form of shared real estate ownership in South Africa. This update considers whether fractional ownership is something new or is merely a new generic term for various existing forms of shared real estate ownership.
Recent years have seen an increased foreign interest in real estate in South Africa. There are a number of permissible legal structures for the establishment of property funds for listing on the Johannesburg Stock Exchange Securities Exchange. This update reviews the advantages and drawbacks of three of these structures: public companies, variable loan stock companies and collective investment schemes.
Full ownership of land is the most commonly used and comprehensive form of title available under South African law. However, where full ownership of land cannot be obtained, a registered long lease can provide an acceptable alternative form of title, provided that certain pitfalls are suitably addressed.
Although on the face of it there appear to be significant differences between an option and a right of first refusal, at law there is very little difference between the two concepts. This update examines the definition of these concepts, as well as the legal requirements for valid and binding options and rights of first refusal.
Inlcuding: Background; Merger Control; Restrictive Practices; Recent Case Law.
Including: The Aims of the Act; Vertical Restraints; Hindering Competition; The Complaint Procedure; Exemptions; Foreign Law
Including: Market and Regulation; Pre-bid; Announcing and Making an Offer; Consideration; Post-bid; Target's Response.
South African company law is in the process of being revamped. The new Companies Act introduces a number of important new concepts into South African law which will be relevant for M&A practitioners. Although implementation of the act has been delayed, when it does take effect it will introduce mergers and amalgamations into South African law, making it easier for companies to implement business combinations.
The Companies Amendment Bill, which was published in order to remove errors in the new Companies Act, contains a problematic new provision relating to share buybacks by the company. The provision provides that a decision by the board of a company to acquire its own shares must be approved by special resolution of the shareholders if any shares are to be acquired from a director or prescribed officer of the company.
When the new Companies Act takes effect in late 2010 or early 2011, it will constitute the first general review of South African company law since 1974. Under the existing Companies Act, schemes of arrangement involve a fairly lengthy and onerous process; however, this has been substantially streamlined under the new act.
South African company law is undergoing major transformation. A new Companies Act has been promulgated and will likely become effective during 2010. The new Companies Act will replace the existing Companies Act, which has been in force for over 30 years. The new regulations concern takeovers and, in particular, cash confirmations, which are relevant to public M&A activity.
The Competition Amendment Act has significantly amended the rules on merger notification. These amendments are expected to cause a reduction in the volume of notifiable transactions as well as reducing filing fees.
A recent case has forced the tightening of the obligations of companies to their employees in the event of a merger. However, companies are still not obliged to share confidential information such as business plans and financial prospects, but only information directly concerning employment prospects under the merger.
In South Africa, mining royalties are currently capped at 5% for refined mineral resources and 7% for unrefined mineral resources, but there is no guarantee that they will remain so. However, mining companies can 'peg' the maximum royalty rate payable on the extraction on mineral resources by concluding fiscal stability agreements with the state.
A recent decision highlighted the fact that it is important for any business to ensure that it has the proper water-use authorizations under the National Water Act. A business that uses water (as defined in the act) without the relevant authorization risks incurring a fine and opens the possibility that the authorities and courts may issue a directive to cease its use of water.
Including: Environmental policy and enforcement; Environmental permits; Waste; Liability; Contaminated land; Powers of regulators; Reporting and disclosure obligations; General issues; Emissions trading and climate change; Environmental insurance liability; National Environmental Management Laws Amendment Bill.
In 2012 two judgments were delivered regarding the functioning of the Water Tribunal - the forum for hearing appeals under the National Water Act. These judgments were handed down subsequent to the disbandment of the tribunal in August 2012. The minister of water and environmental affairs' failure to make appointments necessary to ensure the proper functioning of the Water Tribunal have come under criticism.
The Constitutional Court recently resolved a longstanding dispute on whether consent or authorisation is required in terms of land use and environmental legislation for mining activities. The court cleared up the confusion regarding the land use planning competence of municipalities, but did not clarify the position on the regulation of environmental matters in the mining sphere.
All new buildings and extensions must comply with the buildings energy usage provisions laid out in the amended National Building Regulations. The amendments introduce requirements for energy usage in buildings by setting minimum standards for energy efficiency with which all new buildings and extensions must comply. The regulations are part of efforts to contribute to reducing greenhouse gas emissions.
The National Environmental Management Waste Act came into force in 2009, with the exception of the provisions that regulate contaminated land. The Department of Environmental Affairs is taking steps as a precursor to the enactment of these provisions. However, as they stand, the provisions fall short of what a potentially effective regime should include.
The National Environmental Management Act, read together with the Criminal Procedure Act, provides for individuals to institute private criminal prosecutions for the protection of the environment. This is a risk for companies which have reached an accommodation with the authorities regarding environmental laws, only to be faced with a private prosecution. While the act facilitates such proceedings, there are limitations.
The environmental effects of public and private sector infrastructure projects in South Africa are regulated by a patchwork of local laws, governing air, water and waste, among other things. This update briefly summarises the main legislation and the environmental authorisations needed to take a project forward.
The legality of export restrictions under the international trade law regime is highly contentious, especially in light of the recent World Trade Organisation (WTO) Appellate Body decision in the China export restrictions case. While South Africa's WTO commitments allow it to use export taxes, its bilateral and regional free trade agreement commitments must be heavily weighed before such taxes are imposed.
Budget 2013 proposed some major changes to customs and excise tax. The changes to alcohol and tobacco products include an increase in the excise duties on such products by an average of between 5% and 10%, and an increase in the tax of cigarettes. Green taxes have also been amended - for example, the general fuel levy will increase by R0.15 per litre.