| (1) |
Every director of a bank or controlling company shall acquire a basic knowledge and understanding of the conduct of the business of a bank and of the laws, codes of conduct and customs that govern the activities of such institutions |
[Regulation 40(1) substituted by section 12(a) of Notice No. 724, GG44003, dated 18 December 2020 - effective 1 January 2021]
| (2) |
Although not every member of the board of directors of a bank or controlling company is required— |
| (a) |
to have a detailed technical knowledge— |
| (i) |
of complex financial instruments; or |
| (ii) |
of quantitative risk management techniques; or |
| (b) |
to be fully conversant with all aspects of the conduct of the business of a bank, |
the competence of every director of a bank shall be commensurable with the nature and scale of the business conducted by that bank and, in the case of a director of a controlling company, as a minimum, shall be commensurable with the nature and scale of the business conducted by the banks in the group.
[Regulation 40(2) inserted by section 12(b) of Notice No. 724, GG44003, dated 18 December 2020 - effective 1 January 2021 - subsequent paragraphs have been renumbered]
| (3) |
All directors and executive officers of a bank or controlling company shall perform their functions with diligence and care and with such a degree of competence as can reasonably be expected from persons holding similar appointment and carrying out similar functions as are carried out by the relevant director or executive officer, provided that none of the provisions or requirements contained or specified in these Regulations, including this regulation 40, shall be construed as derogating from any other relevant provision or requirement relating to directors and executive officers that may be contained or specified in any other relevant law or code of conduct. |
| (4) |
In view of the fact that the primary source of funds administered and utilised by a bank in the conduct of its business is deposits loaned to it by the general public, it shall be the duty of every director and executive officer of a bank to ensure that risks that are of necessity taken by such a bank in the conduct of its business are prudently managed. |
| (a) |
directors of a bank shall annually report to the Registrar whether or not: |
| (i) |
the bank's internal controls— |
| (A) |
provide reasonable assurance as to the integrity and reliability of the bank's financial statements; and |
| (B) |
safeguard, verify and maintain accountability of the bank's assets; |
| (ii) |
the internal controls are based on established policies and procedures and are implemented by trained, skilled personnel, whose duties are duly segregated; |
| (iii) |
adherence to the implemented internal controls is continuously monitored by the bank; |
| (iv) |
all bank employees are required to maintain high ethical standards, thereby ensuring that the bank's business practices are conducted in a manner that is above reproach; |
| (v) |
the bank implemented and continuously maintained compensation policies, processes and practices that, as a minimum, comply with the requirements specified in regulation 39(16)(a); |
| (vi) |
anything came to their attention to indicate that any material malfunction, as defined and documented by the board of directors, which definition shall be submitted to the Registrar, in the functioning of the aforementioned controls, procedures and systems has occurred during the period under review. |
| (b) |
directors of a bank shall annually report to the Registrar that there is no reason to believe that the bank will not be a going concern in the year ahead, and should there be reason to believe so, such reason shall be disclosed and explained. |
| (c) |
directors of a bank shall submit the reports on the internal controls and going–concern aspect of the bank within 120 days after the financial year-end of the bank. |
| (d) |
external auditors of a bank shall annually report to the Registrar whether or not they concur with the reports mentioned in paragraphs (a) and (b) above, provided that when the external auditors do not concur with such reports, they shall provide reasons therefor. |
| (6) |
The provisions of subregulation (4) shall mutatis mutandis apply to any controlling company. |
| (7) |
For the purposes of this regulation, "director" includes an alternate director. |
Stamp Duties Act, 1968 (Act 77 of 1968)
