During October 2018, a draft Joint Standard for Significant Owners was released for public consultation. This was followed by a revised draft for further public consultation in July 2019. The draft standard together with the consultation report containing all comments and responses was later submitted to Parliament during November 2019. Most recently, on 1 June 2020, the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA) published Joint Standard 1 of 2020 on the Fitness, propriety and other matters relating to significant owners (Joint Standard).
A person (natural/legal person or organ of state) is a significant owner of a financial institution if the person, directly or indirectly, alone or together with a related or inter-related person, has the ability to control or influence materially the business or strategy of the financial institution.
The Joint Standard which will become effective on 1 December 2020 applies to financial institutions as well as significant owners of financial institutions. This Joint Standard sets out the criteria for significant owners to be considered fit and proper as well as factors that would constitute evidence of the absence of fitness and propriety. It also prescribes what constitutes an increase or decrease in the extent of the ability of the person, alone or together with a related or interrelated person, to control or influence materially the business or strategy of the financial institution. The Joint Standard further places specific reporting obligations on significant owners and financial institutions.
Joint Standard 1 of 2020 was published together with the Consultation report and Exemption Notices. FSCA General Notice 3 of 2020 exempts the following persons from the requirements of the Joint Standard:
(a) Authorised FSPs as defined in the FAIS Act
Note the exceptions that an authorised FSP that is also an eligible financial institution, and an authorised FSP that is also a manager as defined in the Collective Investments Schemes Control Act, 2002 (Act No. 45 of 2002) must meet the requirements set out in the Joint Standard.
(b) a credit rating agency
(c) a friendly society
(d) a pension fund organisation
(e) a financial product provider or financial services provider that is not subject to a financial sector law other than the Financial Sector Regulation Act
(f) a significant owner of any person referred to in paragraphs (a) to (e) above that is exempted from the requirements of the Joint Standard.