Draft standard sets fit and proper rules for beneficial owners
South Africa's Financial Sector Conduct Authority and Prudential Authority have published a draft Joint Standard establishing governance and fit-and-proper requirements for beneficial owners of financial institutions. Stakeholders are invited to submit comments by September 25, 2026.
Closing the transparency gap
The draft Joint Standard issued under the Financial Sector Regulation Act of 2017 establishes explicit requirements to ensure that beneficial owners meet strict honesty and integrity standards.
Under the proposed framework, financial institutions must implement robust governance procedures to identify, verify, and maintain permanent records of their ultimate owners.
In addition, institutions will be required to conduct regular reviews, obtain formal assurance regarding beneficial ownership structures, and report complete ownership details directly to regulatory supervisors.
The standard also seeks to eliminate ambiguity by providing formal legal definitions for ultimate ownership and effective control, while clearly specifying which individuals are excluded from the beneficial owner definition under section 159A(1).
Public feedback window opens
Jointly published by FSCA Commissioner Unathi Kamlana and Prudential Authority CEO Fundi Tshazibana, the notice opens a formal public consultation period running through September 25, 2026.
The regulators have released the draft text along with a statement explaining the operational need, intended scope, and expected regulatory impact on the financial sector.
Stakeholders must submit written comments using the prescribed template available on the authorities' official portals.
A necessary regulatory tightening
The proposal marks an essential alignment with global anti-money laundering standards.
Codifying fit-and-proper rules directly targets opaque corporate structures that shield illicit ownership.
Nevertheless, regulators must ensure that reporting requirements do not overwhelm smaller market participants.