Dear client,
We would like to inform you that BRP has updated its COUNTRY MANUAL PRIVATE BANKING for the following jurisdiction:
SOUTH AFRICA OUT OF BANK’S COUNTRY OF ESTABLISHMENT (DEF, RS, BT & RT)
| SOURCE OF CHANGES | ANSWERS |
| Law/Regulation | NO |
| New Position of the Authorities | NO |
| Evolution of Expert’s interpretation | YES |
Regulatory Template, Regulatory Summary and Behaviour Template
Material changes
The Manual has been reviewed to ensure that its content remains accurate and in accordance with the evolving interpretation of the applicable legal and regulatory framework.
In respect of promotional activities, we have clarified that business card can be provided for socialising purposes. Further, we emphasise that marketing brochures should not contain any information on specific services, in particular when they are provided on Bank’s initiative in or into South Africa.
The Manual has been updated in accordance with the following principles in view of a more restrictive local interpretation of the reverse solicitation principle during on-site visits:
- Presenting the bank’s banking and investment services on-site remains a grey zone in case of reverse solicitation due to the actual risks involved. In contrast, such activities are tolerated via remote means of communication.
- Upon prospect’s request, negotiation activities (like providing a prospect with an account opening form, explaining the terms and conditions of an account opening form) should not be performed on South African territory. This is because such activities are likely to be considered as the performance of banking services without authorisation. Performing these activities via remote means of communication, upon prospect’s request, remains a grey zone and should only be undertaken in case exceptional circumstances apply.
- The offering of debit cards remains a grey zone in case of reverse solicitation and should only be performed on an occasional basis. According to tolerated regulatory practice, a Bank’s representative may offer debit card services, on client’s request, via remote means of communication into South Africa.
- The offering of e-banking services in South Africa in case of reverse solicitation remains a grey zone and should take place on an occasional basis in order to limit the risk of triggering a de facto permanent establishment and the obligation to receive a local license. Such activities appear to be tolerated via remote means of communication into South Africa in case of reverse solicitation.
- The provision of generic recommendation lists, when exercised in or into South Africa either on the Bank’s initiative or following reverse solicitation should be allowed provided the information or material remains sufficiently generic, factual and objective. Providing clients residing in South Africa with generic recommendation lists seems to be permitted in the Bank’s country of establishment.
We have further updated several sections in the Miscellaneous chapter, in particular the section on foreign exchange controls.
Non-material changes
Certain comments have been slightly reworded (without introducing material changes) to reflect the new format of the document.
We have further updated the section on Foreign Exchange Controls and provided more in-depth information on the FSP cross-border license.
Implications for business relations with third parties
Regarding cooperation of the Bank with a local business introducer, we have clarified that – given the generally restrictive interpretation of the unofficial practice concerning reverse solicitation for activities during on-site situation and in view that based on the mere existence of a cooperation agreement between the Bank and the business introducer the latter may be considered a representative of the foreign unauthorised bank in South Africa – generally no such cooperation is recommended even in cases of reverse solicitation; only finder activities on prospect’s request are recommended. This applies to both activities related to banking and investment services.
Regarding cooperation of the Bank with a local EAM, the rules applying to the business introducer generally apply. In addition, the Bank providing the EAM, be it for the EAM’s own use (B2B) or for use by the EAM’s end-clients (B2C), with materials that are generic, factual and objective (e.g., general investment research or financial analysis, generic recommendation lists, etc.) and which does not amount to the Bank marketing its financial services or business capability is a grey zone. The Bank should in no case, however, provide the EAM with any materials that amount to the provision of financial services (i.e., bespoke/tailor-made) or amount to the marketing of its financial services, except for marketing material upon EAM’s request and for EAM’s own use (no formal rules).
Regulatory Summary
This document has now a more user-friendly layout and reflects the changes contained in the RT.
BT Short Comparison
BRP has created a comparison document allowing users to quickly identify the modifications made compared to the previous version of the PB Manual (BT Short Comparison). The BT Short Comparison can be found on BRP’s platform (mybrponline) in the Search tab by entering in the Document Field “CM PB BT SHORT COMP” and “SOUTH AFRICA” in the Target Country Field.
The BT Short Comparison should be read as follows:
The first column contains a short description of the activity in question. The second column contains the answers of the previous version of the Country Manual (online until the day of the alert). The third column contains the new answers of the most recent version of the Country Manual. Only the modified answers are displayed (in color). If the answers in the new version are unchanged compared to the previous version, they are shaded in grey.
For more information, please contact us: info@brpsa.com
Best regards,