Mutual Banks Amendment Act
This text is the publication notice for the Mutual Banks Amendment Act, 1999.
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This text is the publication notice for the Mutual Banks Amendment Act, 1999. This section amends several definitions in the Mutual Banks Act, including definitions for “employee in charge of a risk management function,” “executive officer,” and “mutual bank.” The Registrar is not prevented from holding discussions with a mutual bank’s CEO or designated staff to support effective supervision. A person may not hold themselves out as a mutual bank unless registered as a mutual bank under the Act. The Registrar may revoke a mutual bank’s authorization before provisional registration if satisfied of the stated grounds.
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Provisions of Mutual Banks Amendment Act
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December 1999
AI-assisted research summary: This text is the publication notice for the Mutual Banks Amendment Act, 1999.
15 December 1999 No. 1507. 15 Desember 1999 It is hereby notified that the President has assented to the following Act which is hereby published for general information:— Hierby word bekend gemaak dat die President sy goed- keuring geheg het aan die onderstaande Wet wat hierby ter algemene inhgting gepubliseer word:— No. 54 of L999: Mutual Banks Amendment Act, 1999. No. 54 van 1999: Wysigingswet op Onderiinge Banke, 1999. 1 No. 20727 GO\’ERN.MENT GAZE~E. 15 DECEMBER 1999 .4ct N(). 54, 1999 ML’TUAL BANKS AMENDMENT ACT. 19~)9 GENERAL EXPLANATORY NOTE: [ 1 Words in bold type in square brackets indicate omissions from existing enactments. Words underlined with a solid line indicate insertions in existing enactments, ACT To amend the Mutual Banks Act, 1993, so as to delete a definition and to define or further define certain expressions; to extend the powers of the Registrar of Banks to hold discussions, with a view to achieving effective supervision, with the executive management of mutual banks or of their associates; to substitute for the concepts of provisional and final registration as a mutual bank the single concept of registration as a mutual bank; to delete residual references to terminating mutual building societies; to make other provision’ with regard to the payment of annual Iicence fees in respect of mutual bank business; to include employees of associates of mutual banks in the limit placed on the number of employees that may serve as directors of a mutual bank; to prohibit the appointment of officers of associates of mutual banks as auditors of such mutual banks; to provide more specific guidelines regarding matters to be reported to the said Registrar by the auditor of a mutual bank; to include employees of associates of mutual banks in the limit placed on the number of employees that may serve on a mutual bank’s audit committee; to make further provision with regard to large exposures of mutual banks; to further regulate the furnishing by mutual banks of returns to the Registrar of Banks; to authorize the making of regulations with regard to the restriction of mutual banks’ investments in immovable property and shares and of the granting by mutual banks of loans and advances to certain subsidiaries; and to further regulate the role of mutual banks as agents in the effecting of money-lending transactions; and to provide for matters connected therewith. B E JT ENACTED by the Parliament of [he Republic of South Africa, as follows:— Amendment of section 1 of Act 124 of 1993, as amended by section 1 of Act 25 of 1994 - 1 Verify source ↗
Section 1 of the Mutual Banks Act, 1993 (hereinafter referred to as the principal
AI-assisted research summary: This section amends several definitions in the Mutual Banks Act, including definitions for “employee in charge of a risk management function,” “executive officer,” and “mutual bank.”
1. Section 1 of the Mutual Banks Act, 1993 (hereinafter referred to as the principal 5 Act). is hereby amended— (u) by the insertion in subsection ( 1 ) after the definition of “director’. of the following definition: .’ ‘employee in charge of a risk mana,~ement function.. in relation to a mutual bank, means that employee of the mutual bank who is ultimately responsible for the management of one or more of the following types of risk to which the mutual bank is exposed, namely— (u) solvency risk; (b) liquidity risk; (c) credit risk: 10 15 4 No. 20727 GOVERNMENT GAZE~E. 15 DECEMBER 1999 Act No. 54, 1999 MUTUAL BANKS .4 MENDMENT ACT. 1999 (d) (e) V) (g) (h) (i) L currency risk; market risk (position risk); interest rate risk; counterpart risk: technological risk; operational risk; or any other risk regarded as material by that mutual bank;.’: (b) by the substitution in subsection ( 1 ) for the definition of ‘executive oficer.’ of the following definition: “ ‘executive officer’&relation to an~ institution— (a) that is not a mutual bank. includes any [general] manager [or deputy general manager] of [a mutual bank] such an institution; (b) that is a mutual bank, includes any employee of the mutual bank who is in charge of a risk mana,~ement function of the mutual bank. and an> manager of the mutual bank who is responsible. or reports, directl} to the chief executive officer of the mutual bank;”: (c) by the substitution in subsection ( 1 ) for paragraph (b) of the definition of “mutual bank” of the following paragraph: “(b) that is [provisionally or finally] registered as a mutual bank in terms of this Act;”; and (d) by the deletion in subsection (1) of the definition of ..registered... Amendment of section 4 of Act 124 of 1993 - 2 Verify source ↗
Section 4 of the principal Act is hereby amended by the substitution for subsection
AI-assisted research summary: The Registrar is not prevented from holding discussions with a mutual bank’s CEO or designated staff to support effective supervision.
2. Section 4 of the principal Act is hereby amended by the substitution for subsection (3) of the followin& subsection: “(3) Neither the provisions of this section nor any other provision of this Act shall be construed as prohibiting the Registrar from holding discussions, from time to time, with the chief executive officer of any mutual bank, or with any executive officer or employee [of that mutual bank], designated by such chief executive officer. of— (a) that mutual bank; or (b) any associate of that mutual bank. with a view to achieving effective supervision [of such mutual bank] by the Registrar. on an individual or a consolidated basis, of that mutual bank or of that mutual bank and any of its associates.”. Amendment of section 9 of Act lx of 1993 - 3 Verify source ↗
Section 9 of the principal Act is hereby amended by the substitution for subsection
AI-assisted research summary: A person may not hold themselves out as a mutual bank unless registered as a mutual bank under the Act.
3. Section 9 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: “(1 ) NO person shall hold himself out to be a mutual bank unless such person is [provisionally or finally] registered as a mutual bank in terms of this Act.’. Amendment of section 12 of Act 124 of 1993 - 4 Verify source ↗
Section 12 of the principal Act is hereby amended by the substitution in subsection
AI-assisted research summary: The Registrar may revoke a mutual bank’s authorization before provisional registration if satisfied of the stated grounds.
4. Section 12 of the principal Act is hereby amended by the substitution in subsection (1) for the words preceding paragraph (a) of the following words: .’The Registrar may at any time prior to the [provisional] registration, in terms of section 14, of a mutual bank revoke the authorization &ranted for the establishment of such mutual bank if the Registrar is satisfied that—”. 5 10 15 ~o 25 30 35 40 45 6 NO, 20727 GOVERNMENT GAZE~E. 15 DECEMBER 1999 Act NO. 5 4 . 1 9 9 9 MUTUAL BANKS AMENDMENT ACT, 1999 Substitution of section 13 of Act 124 of 1993 j. The following section is herebJ substituted for section 13 of the principal Act: “Application for registration as mutual bank 13. ( 1 ) An applicant to whom the Registrar has under section 11 granted authorization for the establishment of a mutual bank (hereinafter in this Chapter referred to as the institution) may at any time during the period of 12 months commencing on the date of the granting of the said authorization upply to the Registrar for the [provisional] registration of the institution as a mutual bank. provided such authorization has not been revoked in terms of section 12(1). (2) An application under subsection (l) shall— (a) be made in the prescribed manner and on the prescribed form: and (h) be accompanied by— (i) two copies of the institution’s articles; (ii) a written statement in which is 5et out— (au) the full and the abbreviated name of the institution as we]] as the literal translations thereofi (bbj the address of the institutions head office as well a5 its postal address: (cc) full particulars of the business the proposed mutual bank will conduct and of the manner in which such business will be conducted; and (old) the full names and the addresses of the [chairman] chairperson. the other directors and the executive officers of the institution: and 5 lo 15 20 (iii) a list of proposed shareholder in the institution, setting out the full name, occupation and residential or business address of the subscriber, the number and type of shares he or she takes and the nominal value of such shares. (3) The Registrar may require an applicant contemplated in subsection ( 1 ) to furnish him or her with such information or documents, in addition to information and documents furnished by the applicant in terms of subsection (2), as the Registrar may deem necessary. (4) The application and every document lodged in terms of subsection (2) or (3) shall be signed by the [chairman] chairperson or the chief executive officer of the institution . . . . 30 35 Substitution of section 14 of Act 124 of 1993
Part
Chapter referred to as the institution) may at any time during the period of
- 6 Verify source ↗
The following section i5 hereby substituted for section 14 of the principal Act:
AI-assisted research summary: The Registrar must grant a mutual bank registration application if the stated conditions are met, may refuse it on listed grounds, must notify the applicant, and an institution may not start business until it proves section 48 compliance.
6. The following section i5 hereby substituted for section 14 of the principal Act: “Granting or refusal of application for registration 14. (1) Subject to the provisions of subsection (2), the Registrar shall. 40 after considering all information and documents furnished to him or her in terms of section 13 for the purposes of an application under that section. grant such application if he or she is satisfied— (a) that, according to its articles, the institution will be a mutual bank; (b) that the methods of conducting the business of the proposed mutual 45 bank. as laid down in its articles. are not undesirable; and (c) that the articles of the institution are consistent with this Act and not undesirable for any reason. (2) Notwithstanding the provisions of subsection ( 1), the Registrar may refuse an application for the [provisional] registration of an institution as a 50 mutual bank if he or she is of the opinion-— (u) that any of the requirements specified in section 11(2) is no ionger being complied with by or in respect of the institution concerned: 8 No. 20727 Act N(). 54, 1999 GOVERNMENT GAZE~E. 15 DECEMBER 1999 MUTUAL BANKS AMENDMENT ACT. 1999 (b) tha[ the institution concerned. when [provisionally or finally] registered as a mutual bank. will probably not be able to comply with a provision of this Act, or is likely to pursue a practice contrary to a provision of this Act; (c) that an interest which any person has in the institution concerned is inconsistent with a provision of this Act: (d) that the interests of potential depositors with or borrowers from the institution concerned will be detrimentally affected by the manner in which the institution proposes to conduct its business. or for any other reason: (e) that the name of the institution concerned— 5 10 (i) is identical with a name under which an existing mutual bank [terminating mutual building society] or bank has already been [provisionally or finally] registered: (ii) so closely resembles the name of an existing mutual bank [terminating mutual building society] or bank that the one is likely to be mistaken for the other: (iii) is identical with. or closely resembles. the name under which any mutual bank or bank [or terminating mutual building society] or any institu~on that was registered under any law repealed by this Act. was previously registered and that there is reasonable ground for objection against the use of that name by the institution concerned: or (iv) is likely to mislead the public: or . (f) that the application does not comply with a requirement of this Act. (3) When the Registrar in terms of this section grants or refuses an application for [provisional] registration. [he] the Registrar shall give written notice of that fact to the applicant concerned. (4) If the Registrar in terms of this section grants an application for [provisional] registration he or she shall. subject to the provisions of section 15, and on payment by the applicant of the prescribed registration fee, [provisionally] register the institution concerned as a mutual bank and issue to the institution, on the prescribed form. a certificate of [provisional] registration as a mutual bank. (5) An institution that is for the first time [provisionally] registered as a mutual bank shall not commence doing business in that capacity until it has furnished proof to the Registrar that it complies with the provisions of section 48. (6) An institution that contravenes the provisions of subsection (5) shall be guilty of an offense . . . . 30 35 40 Substitution of section lj of Act 124 of 1993 - 7 Verify source ↗
The following section is hereby substituted for section 15 of the principal Act:
AI-assisted research summary: Provisional registration of a mutual bank is subject to prescribed and additional conditions set by the Registrar.
7. The following section is hereby substituted for section 15 of the principal Act: “Conditions of registration 15. ( I ) The [provisional] registration under section 14 of an institution as a mutual bank shall be [for a period of 12 months and shall be] subject to 45 the prescribed conditions and to such further conditions. if arty. as the Registrar may determine. [(2) The Registrar may in his discretion and subject to the same or any other or further conditions, from time to time before its expiration renew such provisional registration for periods not exceeding 12 50 months at a time: Provided that— (a) no mutual bank shall remain provisionally registered as such for an aggregate period exceeding five years; and (b) without derogating from the Registrar’s discretion in terms of this subsection to grant or refuse the renewal of such provisional 55 registration, the Registrar may accept the fact that the institution concerned has not, during the period of six months expiring on the 10 No. 20727 GOVERNMEW GAZETTE, 15 DECEMBER 1999 Act No. 54, 1999 MUTUAL BANKS AMENDMENT ACT. 1999 last day of the period of 12 months referred to in subsection (1), conducted any business as a mutual bank, as a conclusive ground for the refusal of such a renewal. (3)]Qln addition to any other condition which the Registrar may impose under subsection ( 1 ) [or (2), be] the Registrar may impose a 5 condition requiring the institution concerned to take within a specified period such steps as maybe necessary to alter its articles in accordance with the requirements of the Registrar. [(4) (a) An appeal in terms of section 7 by a mutual bank against the Registrar’s refusal to renew or further renew its provisional registra- 10 tion shall, notwithstanding the provisions of section 7, be lodged before such provisional registration or renewed provisional registration expires. (b) If the provisional registration or renewed provisional registration expires while an appeal referred to in paragraph (a) is being 15 considered, such provisional registration or renewed provisional registration, as the case may be, shall be deemed to have been renewed or further renewed until tbe appellant is notified of the board of appeal’s decision on the appeal.]”. Repeal of sections 16 and 17 of Act 124 of 1993 - 8 Verify source ↗
Sections 16 and 17 of the principal Act are hereby repealed.
AI-assisted research summary: Sections 16 and 17 of the principal Act are repealed.
8. Sections 16 and 17 of the principal Act are hereby repealed. Amendment of section 18 of Act 124 of 1993 - 9 Verify source ↗
Section 18 of the principal Act is hereby amended—
AI-assisted research summary: Section 18 of the principal Act is amended by adding “or,” changing paragraph (b), and deleting paragraph (c).
9. Section 18 of the principal Act is hereby amended— (a) by the insertion of the word “or” at the end of paragraph (u); (b) by the substitution for paragraph (b), of the following paragraph : 25 “(b) an application for [provisional or final] registration as a mutual bank. [or]”; and (c) by the deletion of paragraph (c). Amendment of section 19 of Act 124 of 1993 - 10 Verify source ↗
Section 19 of the principal Act is hereby amended by the substitution for 30
AI-assisted research summary: If a company-registered juristic person is registered as a mutual bank, the Registrar must notify the Registrar of Companies, and the Registrar of Companies must remove its name from the companies register.
10. Section 19 of the principal Act is hereby amended by the substitution for 30 subsection (2) of the following subsection: “(2) Whenever a juristic person registered under the Companies Act is [for the first time provisionally] registered as a mutual bank in terms of this Act. the Registrar shall in writing notify the Registrar of Companies of such registration. and upon receipt by the Registrar of Companies of such notice he or she shall 3S remove the name of such juristic person from the register of companies.’.. Amendment of section 20 of Act 124 of 1993 - 11 Verify source ↗
Section 20 of the ?rincipal Act is hereby amended—
AI-assisted research summary: Mutual banks must use only their registered name, or an approved literal translation or abbreviation; others must not use misleading mutual-bank or “building society” names.
11. Section 20 of the ?rincipal Act is hereby amended— (u) by the substitution for subsection (1) of the followin& s~bsection: ‘.( 1 ) Subject to the provisions of subsection (2), an institution that is 40 [provisionally or finally] registered as a mutual bank shall not use, or refer to itself by, a name other than the name under which it is so registered, or any literal translation or abbreviation thereof that has been approved by the Registrar..’: and (b) by the substitution for subsections (4) and (5) of the following subsections. respectively: 45 “(4) Any person who, in connection with any business conducted by [him] that = USeS Or refers to himself or herself by, any name, description or symbol indicating, or calculated to lead persons to infer, that [be] that person is a mutual bank [provisionally or finally] registered as such under this Act, while [he] the = iS not so registered as a mutual bafi, shall be guilty of an offence. — 50 [~ No. 20721 Act No. 54, 1999 GOVERNMENT GAZE~E. 15 DECEMBER 1999 ML~T~AL BANKS AMENDMENT ACT ] 999 (5) No person shall use in respect of any business a name or description that includes the words .’building society”, or any derivative thereof, unless the business concerned is a mutual bank ~ a bank [or a terminating mutual building society ].... Substitution of section 21 of Act lx of 1993 5 - 12 Verify source ↗
The following section is hereby substituted for section 21 of the principal Act:
AI-assisted research summary: The Registrar may cancel or suspend a mutual bank’s registration, subject to section 22 and the Minister’s consent, if stated conditions are met.
12. The following section is hereby substituted for section 21 of the principal Act: “Cancellation or suspension of registration by Registrar 21. (1) The Registrar may, subject to the provisions of section 22, in the case of a mutual bank [that is provisionally] registered as such, with the consent of the Minister and by notice in writing to the institution concerned 10 cancel. or suspend on such conditions as the Registrar may deem fit. such [provisional] registration if the institution has not conducted any business as a mutual bank during the period of six months commencing on the date on which the institution was [for the first time provisionally] registered as a mutual bank. 15 (2) The Registrar may, subject to the provisions of section 22, in the case of a mutual bank [that is provisionally or finally] registered as such. with the consent of the Minister and by notice in writing to the institution - concerned cancel, or suspend on such conditions as the Registrar may deem fit. such [provisional or final] registration if— (a) it has, in the opinion of the Registrar. been obtained on the strength of — untrue or misleading information furnished by any person and such person has, on account of having so furnished such information. been convicted of an offence in terms of section 18; or @ the institution concerned has failed to comply—– 25 20 ~ with a prescribed condition or a further condition, contemplated in section 15(1). to which its registration is subject: or (ii) with a condition imposed by the Registrar under section 1 j(2). (3~he RegistrM may. subject to the provisions of section 22, in the case of a mutual bank [that is finally] registered as such, with the consent of the 30 Minister and by notice in writing to the institution concerned cancel such registration if the institution has ceased to conduct business as a mutual bank or is no longer in operation.”. Amendment of section 22 of Act lx of 1993 - 13 Verify source ↗
Section 22 of the urinciual Act is herebv amended—
AI-assisted research summary: Before canceling or suspending a mutual bank’s registration, the Registrar must give written notice and allow at least 30 days for the institution to show cause.
13. Section 22 of the urinciual Act is herebv amended— 35 (a) (b) by the substitu~ion ii subsection (I) ~or the words preceding paragraph (a) of the following words: “The Registrar shall, before canceling or suspending under section 21 the [provisional or final] registration of a mutual bank, in a written notice addressed to the [chairman] chairperson or chief executive officer of the 40 institution concerned-—”; by the substitution for paragraph (c) of subsection (1) of the following paragraph: “(c) call upon the institution to show cause within a period specified in the notice. which shall not be less than 30 days as from the date of the notice, 45 why its [provisional or final] registration [as the case may be] should not be so cancelied or suspended.”; and (c) by the substitution for paragraph (a) of subsection (2) of tbe following paragraph: “(a) proceed with the cancellation or suspension. in terms of section 21, of the 50 [relevant] registration; or”. .ict N(J. 54.1999 hl UTL”.\L BANKS .4.MENDMENT .4 CT. 1999 Amendment of section 23 of Act 124 of 1993 - 14 Verify source ↗
Section 23 of the DrinciDal Act is hereby amended—
AI-assisted research summary: The Registrar may ask a competent court to cancel or suspend a mutual bank’s registration if the Registrar believes there are other grounds, and the court may grant the order if the bank has not complied with an applicable Act requirement.
14. Section 23 of the DrinciDal Act is hereby amended— (a) bv the substit~tion ~or subsection ( Ij of the following subsection: “(1 ) The Registrar may by way of application on notice Of motion apply to a competent court for an order canceling or suspending the [provisional or final] registration of a mutual bank if. in the opinion of the Registrar, there are grounds, other than the grounds referred to in section 21, justify in& such cancellation or suspension..’: by the substitution in subsection (4) for the words preceding paragraph (a) of the following words: “In addition to any other grounds that the court may consider sufficient to justify the granting of an order under subsection (1) canceling or suspending the [provisional or final] registration of a mutual bank, such an order may be granted if the institution concerned-”; and by the substitution for paragraph (c) of subsection (4) of the following paragraph: “(c) has failed to comply with a requirement of this Act that is applicable to it in its capacity as a [provisionally or finally] registered mutual bank;”. (b) (c) Amendment of section ~ of Act lx of 1993 - 15 Verify source ↗
Section 24 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: The Registrar may, by written notice, restrict a mutual bank’s activities if the Registrar believes certain section 23(4) circumstances exist.
15. Section 24 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: “(l) The Registrar may, in lieu of an application under section 23(1 ), by written notice to a [provisionally or finally registered] mutual bank in respect of which, in the opinion of the Registrar, any of the circumstances mentioned in section 23(4) is present, restrict the activities of the institution concerned as a mutual bank in such respects and on such conditions as the Registrar may specify in the notice.”. Substitution of section 25 of Act 124 of 1993 16, The following section is hereby substituted for section 25 of the principal Act: “Cancellation of registration at request of mutual bank - 25 Verify source ↗
The Registrar shall cancel the [provisional or final] registration [as
AI-assisted research summary: The Registrar must cancel a mutual bank’s provisional or final registration when the institution submits a special resolution from its members authorizing cancellation.
25. The Registrar shall cancel the [provisional or final] registration [as the case may be] of a mutual bank upon submission to him or her by the institution concerned of a special resolution by its members authorizing such cancellation.”. Amendment of section 26 of Act lM of 1993 - 17 Verify source ↗
Section 26 of the principal Act is hereby amended—
AI-assisted research summary: This section amends section 26 so it refers to suspended provisional or final registration and allows an application to discharge an order suspending a mutual bank’s registration to be made to the competent court.
17. Section 26 of the principal Act is hereby amended— (a) by the substitution for paragraph (a) of subsection (1) of the following paragraph: “(a) the [provisional or final] registration was suspended under section 21; or”; and (b) by the substitution for subsection (2) of the following subsection: “(2) Application for an order discharging a order under section 23 whereby the [provisional or final] ~egistration of a mutual bank has been suspended, may be made to the competent court referred to in section 23(2).”. Amendment of section 27 of Act lM of 1993 - 18 Verify source ↗
Section 27 of the principal Act is hereby amended—
AI-assisted research summary: This section amends section 27 of the principal Act by replacing paragraphs (a) and (b) and deleting paragraph (c).
18. Section 27 of the principal Act is hereby amended— (a) by the substitution for paragraphs (a) and (b) of the following paragraphs, respectively: “(a) [provisional or final] registration of an institution as a mutual bank; (b) cancellation or suspension of [such a] @ registration of a mutual bank; ’.; and (b) bv the deletion of Dara~ra~h (c). 5 10 15 20 25 30 35 40 45 50 I (1 XL>. :07:7 GO\ ’F: RN\lENT GAZETTE. 15 DECEMBER 1999 .Act N(). 54, 1999 MU~AL BANKS .4hlENDhfEXT ACT. 1999 Amendment of section 28 of Act 124 of 1993 - 19 Verify source ↗
Section 28 of the principal Act is hereby amended by the deletion of paragraph (a).
AI-assisted research summary: This section amends section 28 of the principal Act by deleting paragraph (a).
19. Section 28 of the principal Act is hereby amended by the deletion of paragraph (a). Amendment of section 29 of Act 1X of 1993 - 20 Verify source ↗
Section 29 of the principal Act is hereby amended by the substitution in subsection
AI-assisted research summary: This section amends section 29 so that, when a mutual bank stops being registered, the Registrar may order that institution in writing.
20. Section 29 of the principal Act is hereby amended by the substitution in subsection ( 1 ) for the words preceding paragraph (a) of the following words: 5 “Whenever an institution that is [provisionally or finally] registered as a mutual bank ceases to be registered as such, the Registrar may in writing order that institution—”. Insertion of section 30A in Act 124 of 1993 - 21 Verify source ↗
The following section is hereby inserted in the principal Act after section 30: 10
AI-assisted research summary: Eligible mutual banks must be reregistered by the Registrar, who must also issue a registration certificate, and no fees are payable for the reregistration.
21. The following section is hereby inserted in the principal Act after section 30: 10 “Reregistration after commencement of Mutual Banks Amendment Act, 1999 30A. (1) Every institution which on the date immediately preceding the date of commencement of the Mutual Banks Amendment Act, 1999 (hereinafter in this section referred to as the Amendment Act), is a mutual bank that has been provisionally or finally registered as such under the provisions of this Act as those provisions existed prior to the amendment thereof by the Amendment Act shall. in accordance with and subject to subsections (2) and (3), be reregistered as a mutual bank by the Registrar in terms of the provisions of this Act as so amended, as soon as is practicable 20 after the said date of commencement. 15 (2) The Registrar shall, when complying with subsection (l), issue to the institution in question a certificate of registration as a mutual bank. (3) The reregistration of an institution in terms of this section shall be subject mutatis mutarldis to section 15. (4) Upon the reregistration of an institution in terms of this section its previous provisional or final registration as a mutual bank, as the case may be, shall be deemed to have lapsed and any certificate of registration issued in respect thereof shall be deemed to have been cancelled. (5) No fees shall be payable in respect of a reregistration in terms of this 25 30 section.”. Substitution of section 31 of Act 124 of 1993 - 22 Verify source ↗
The following section is hereby substituted for section 31 of the principal Act:
AI-assisted research summary: This section replaces section 31 of the principal Act with a new section headed “Annual Iicence”.
22. The following section is hereby substituted for section 31 of the principal Act: “Annual Iicence - 31 Verify source ↗
A mutual bank shall obtain from the [receiver of revenue of the 35
AI-assisted research summary: A mutual bank must obtain an annual business licence for its particular business and pay the prescribed licence fee.
31. A mutual bank shall obtain from the [receiver of revenue of the 35 district in which its head office is situated] Re,zistrar a [mutual bank] business licence pertaining to its particular business in respect of each year ending on the thirty-first day of December against paj’ment of the presc~bed licence fee..’ Amendment of section 3? of Act 124 of 1993 40 - 23 Verify source ↗
Section 37 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: A mutual bank may have no more than 49% employee directors, and employee directors’ votes at a board meeting may not exceed 49% of the total votes cast.
23. Section 37 of the principal Act is hereby amended by the substitution for subsection (12) of the following subsection: “(12) Notwithstanding anything to the contrary in any law or the common law or in any agreement contained. not more than 49 per cent. rounded off to the next lower integral number. of the directors of a mutual bank shall be employees of that 45 mutual bank or of anv of its associates: Provided that in respect of any matter put to the vote at a meeting of the board of directors of a mutual bank such directors ~,ho Me employees of tha[ mutua] bank or of any of its associates shall together not Ih X(). 20727 GO\ ’ERNhlEXT G.4ZE~E. 15 DEC~4BER 1999 Act N(). 54, 199Y )IL-TC.AL B.4XKS .4\lENDhlENT ACT. 1999 have a vote in excess of 49 per cent of the total \’ote cast by all the directors present and voting at that meeting . . . . Amendment of section 43 of Act 124 of 1993 - 24 Verify source ↗
Section 43 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: This amendment says a mutual bank’s provisional registration date counts as its incorporation date for the stated purpose.
24. Section 43 of the principal Act is hereby amended by the substitution for subsection (2) of the following subsection: 5 “(2) For the purposes of the proviso to subsection (l), the date on which a mutual bank is in terms of section 14(4) [provisionally] registered as a mutual bank shall be deemed to be the date of its incorporation.”. Amendment of section 45 of Act 124 of 1993 - 25 Verify source ↗
Section 45 of the principal Act is hereby amended by the substitution for 10
AI-assisted research summary: This amendment sets who may be appointed as an auditor for a mutual bank.
25. Section 45 of the principal Act is hereby amended by the substitution for 10 paragraph (b) of subsection (1) of the following paragraph: “(b) Any such auditor shall be an accountant and auditor registered as such in terms of the ~blic Accountants’ and Auditors’ Act, 1991 (Act No. 80 of 199 1), who is engaged in public practice, and no officer of a mutual bank or of any of its associates. and no firm of which such an 05cer is a member or 15 employee, shall be appointed as an auditor of that mutual bank.”. Amendment of section 46 of Act IM of 1993 - 26 Verify source ↗
Section 46 of the principal Act is hereby amended by the substitution in subsection
AI-assisted research summary: This section amends section 46 of the principal Act by replacing a subparagraph about what an auditor may consider concerning a mutual bank.
26. Section 46 of the principal Act is hereby amended by the substitution in subsection (1) for subparagraph (ii) of paragraph (b) of the following subparagraph: “(ii) which, in the opinion of such auditor, may [be of concern to depositors of 20 the mutual bank concerned] endanger the mutual banks ability to continue as a going concern or may impair the protection of the funds of the mutual bank’s depositors or may be contrary to principles of sound management (including risk management) or amounts to inadequate maintenance of internal controls: and”. 25 Amendment of section 47 of Act 124 of 1993 - 27 Verify source ↗
Section 47 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: Audit committee members may be non-employees, and a majority must be non-employees of the mutual bank or its associates.
27. Section 47 of the principal Act is hereby amended by the substitution for subsection (3) of the following subsection: “(3) All of the members of the audit committee may be, and the majority of such members shall be, persons who are not employees of the mutual bank nor of any of 30 its associates.”. Amendment of section 51 of Act 124 of 1993 - 28 Verify source ↗
Section 51 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: A mutual bank may not exceed a prescribed lending/investment limit without board or committee permission, and it must provide prescribed returns and related reports to the Registrar.
28. Section 51 of the principal Act is hereby amended by the substitution for subsection ( 1 ) of the following subsection: ‘.(1 ) A mutual bank shall not make investments with, or grant loans or advances 35 or other credit to, any person, to an aggregate amount exceeding an amount representing a prescribed percentage of such mutual bank’s capital and reserves, without first having obtained the permission of its board, or of a committee appointed for such purpose by its board (at least one of the members of which committee shall be a [non-executive] director of the mutual bank who is not in its 40 employ nor in the employ of any of its associates), to make such investments or to grant such loans, advances or other credit.”. Amendment of section 53 of Act 124 of 1993 29, Section 53 of the principal Act is hereby amended— (a) by the substitution for subsection (1) of the following subsection: ‘L(1) A mutual bank shall, in order to enable the Regiswar to deterrnine— 45 \“,), 20-27 G[)\’ERXhlENI GAZETTE. 15 I) ECENI13EN lY~~[) ([r) whetller then~utu~l ballkis comply irlgw7itll thepro\Jisions ofsections48 and 50 of this Ac( or of section 10A of the South African Reserve Bank Act. 1989 (Act No. 90 of 1989). as applied by section 49 of this Act: or (17) the nature and amounts of the mutual banks assets, liabilities and contingent liabilities. furnish the Registrw. subject to the provisions of subsection [(2)] ~. with [a return on the prescribed form and in respect of the prescribed period] returns.’.: (b) by the deletion of subsection (2); (c) by the substitution for subsection (3) of the following subsection: “(3) A mutual bank shall. in addition to the returns referred to in subsection (1). [in respect of such period, at such times and on such a form as may be prescribed] furnish the Registrar. subject to subsection (3A), with the prescribed returns, including returns relating to the extent and management of risk exposures in the conduct of its business,..: (d) by the insertion of the following subsection after subsection (3): “(3A) The returns referred to in subsections (1) and (3) shall be prepared in conformity with ~enerallv accepted accounting practice and shall be furnished to the Registrar in respect of such period, at such times and on such a form as may be prescribed.”; and (e) by the substitution for subsections (4) and (5) of the followin& subsections, respectively: “(4) A mutual bank shall [}vithin such period as the Registrar may on the application of such mutual bank approve] furnish the Registrar, in respect of [that one] those of the respective returns referred to in [subsection (1)(b)] subsections (1) and (3) which most nearly [coincides] coincide with the end of the financial year of the mutual bank. with a report by the auditor of the mutual bank in which is stated whether or not [that return] those returns fairly and in conformity with generally accepted accounting practice [presents] present those affairs of the mutual bh to which the [return relates] returns relate, and the Registrar may, if he or she deems it necessary, require the mutual bank so to furnish him or her with such a report in respect of any other of those returns furnished during the financial year. (5) A mutual bank shall. at such times as may be prescribed. furnish the Registrar with [the] such fufiher prescribed information [regarding i~ assets, liabilities and contingent liabilities] as the Registrar mav require.”. 5 10 15 20 25 30 35 Amendment of section 55 of .%ct 124 of 1993 - 30 Verify source ↗
Section 55 of the principal Act is hereby amended by the substitution in subsection
AI-assisted research summary: The amended rule says a specified amount must not exceed a prescribed amount, and a mutual bank may ignore certain investments in immovable property or undertakings for five years after purchase when they are bought in to protect an investment.
30. Section 55 of the principal Act is hereby amended by the substitution in subsection ( 1 ) for the words following upon paragraph (c) of the followin& words: ‘“does not at any time exceed [the] a prescribed amount [of its issued primary and secondary share capitil and primary and secondary unimpaired reser~e funds referred to in section 48, plus that part of the amount of any surplus resulting from a revaluation of assets and ~vhich in terms of paragraph (a) of the definition of ‘secondary unimpaired reserve funds’ in section 48 does not rank as secondary unimpaired reserve funds: Provided that if immovable property or an undertaking is bought in by a mutual bank to protect an investment (including a loan or an advance), the amount of such an investment shall for a period of five years from the date of purchase not be taken into account for the purposes of this subsection].”. 40 45 50 Amendment of section 56 of .Ict 124 of 1993 - 31 Verify source ↗
Section 56 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: This section amends section 56 so that a specified capital calculation is made by deducting an excess amount based on the bank’s issued primary share capital and primary unimpaired reserve funds.
31. Section 56 of the principal Act is hereby amended by the substitution for subsection (2) of the following subsection: “(2) The sum of the amounts referred to in paragraphs (u), (b) and (c) of subsection (1 ) shall be calculated for the purposes of that subsection by deducting therefrom the amount by which the sum of the issued primary share capital and primary unimpaired reseme funds, referred to in section [5j(l)] ~, of the 55 ..-.—.. ,-.,. _., 22 N(), 20727 C,OVERX\f EN-T G.4ZETrE. 15 DECENIBER 19’?Y Act N(1. 54, 19V9 klCTL”.%L BANKS AhlENDh4ENT ACT. 199Y mutual bank exceeds the sum of the amounts referred to in paragraphs (u). (b) and (c) of section 55(1) . . . Amendment of section 59 of Act 124 of 1993 - 32 Verify source ↗
Section 59 of the principal Act is hereby amended by the substitution in subsection
AI-assisted research summary: The amendment says the lender bears the risks of the mutual bank placing the funds, except where the lender has a legal right of recovery against the mutual bank, and the mutual bank must carry out the lender’s instructions in the written agency contract.
32. Section 59 of the principal Act is hereby amended by the substitution in subsection (1) for subpara&raph (ii) of paragraph (e) of the following subparagraph: “(ii) that the lender assumes. except in so far as he or she may in law have a right of recovery against the mutual bank, all risks connected with the placing by the mutual bank of the funds entrusted to it by the lender, as well as the responsibility>’ to ensure that the mutual bank executes the lender’s instructions as recorded in the written contract of agency; and”. 5 10 Amendment of section 62 of Act 124 of 1993 - 33 Verify source ↗
Section 62 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: A finally registered mutual bank that wants to carry on business as a bank may be converted into such a bank if the Registrar approves and a special resolution is passed at a special general meeting.
33. Section 62 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: ‘.( 1) A mutual bank that is [finally] registered as [a mutual bank]@ in terms of this Act and that desires to carry on business as a bank may with the approval of 15 the Registrar and under the authority of a special resolution adopted at a special general meeting of members of the mutual bank be converted into such a bank in accordance with the provisions of this Chapter.”. Amendment of section 68 of Act 124 of 1993 - 34 Verify source ↗
Section 68 of the principal Act is hereby amended by the substitution for 20
AI-assisted research summary: A company formed by conversion must send two certified incorporation documents to the Registrar within 14 days, and the Registrar must issue final bank registration after receipt and payment of the prescribed fee.
34. Section 68 of the principal Act is hereby amended by the substitution for 20 subsection (1) of the following subsection: “(1) Within 14 days of any conversion in terms of section 67, the company established by the conversion shall forward two certified copies of its certificate of incorporation and its memorandum and articles of association to the Registrar, and upon receipt of such documents the Registrar shall. against payment of the 25 prescribed registration fee, issue to it a certificate of [final] registration as a bank.”. Amendment of section 69 of Act 124 of 1993 - 35 Verify source ↗
Section 69 of the principal Act is hereby amended by the substitution in subsection
AI-assisted research summary: This section amends Section 69 so that the juristic person existing before conversion continues to exist, but as a public company deemed registered as a bank.
35. Section 69 of the principal Act is hereby amended by the substitution in subsection (1) for the words preceding paragraph (a) of the following words : “The juristic person that existed as a mutual ba~ before the conversion shall, 30 notwithstanding the conversion, continue to exist as a juristic person, but in the form of a public company deemed to be registered [finally] as a bank in terms of the Banks Act, 1990, and as from such conversion—”. Amendment of section 71 of Act 124 of 1993 - 36 Verify source ↗
Section 71 of the principal Act is hereby amended by the substitution for 35
AI-assisted research summary: Mutual banks may amalgamate into one mutual bank, or transfer all or part of their assets and liabilities, if the Registrar gives written approval.
36. Section 71 of the principal Act is hereby amended by the substitution for 35 subsection ( 1 ) of the following subsection: “(1 ) Two or more mutual banks may with the written approval of the Registrar amal&amate and become one mutual bank, and a mutual bank may with like approval transfer all or part of its assets and liabilities to another mutual bank or to a bank [finally] registered as such in terms of the Banks Act, 1990 (Act No. 94 of 40 1990).”. Amendment of section 77 of Act 124 of 1993 - 37 Verify source ↗
Section 77 of the principal Act is hereby amended by the substitution for
AI-assisted research summary: When a mutual bank has been completely wound up, the responsible Master of the Supreme Court must send a certificate to the Registrar, and the Registrar must cancel the bank’s registration on receiving it.
37. Section 77 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: “(1 ) When the affairs of a mutual bank have been completely wound up as 45 contemplated in section 4 19( 1 ) of the Companies Act, as applied by sections 74 and 75 of this Act, the responsible Master of the Supreme Court shall transmit to the Registrar a certificate to that effect and the Re&istrar shall upon receipt of such .*C[ so. 54. 199Y hf[-TC,+L EAXKS -\hfEXDkf Eh-TACT. 1999 cenificate cancel the [provisional or final] registration [as the case may be] of the mutual bank concerned..’. Short title - 38 Verify source ↗
This Act shall be called the Mutual Banks Amendment Act. 1999, and shall come
AI-assisted research summary: This section says the Act is called the Mutual Banks Amendment Act, 1999, and starts on a date fixed by the President by proclamation in the Gazette.
38. This Act shall be called the Mutual Banks Amendment Act. 1999, and shall come into operation on a date fixed by the President by proclamation in the Ga~ette. 5 I ——.—
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Mutual Banks Amendment Act
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