Chairperson and hon members, the South African economy and its financial services under the stewardship of the ANC have risen to occupy a position which is the envy of many in developing and developed economies alike.
Pre-1994 we would not be in a position to discuss our position, because we had an illegitimate government that was isolated from the rest of the world and only catered for the needs of the few to the total exclusion of the vast majority of the people.
The financial services sector and particularly the banking industry has continued to be an anchor of macroeconomic stability through keeping pace with global developments as this Bill clearly demonstrates.
The objects of this Bill, as the Minister has already indicated, are to facilitate the implementation of Basel II and to align the Act to the changing supervisory policy and market developments.
This Bill primarily contains amendments to the Act necessitated by the Revised Framework on International Convergence of Capital Measurement and Capital Standards published by the International Basel Committee on 26 June 2004. These Basel II amendments are intended to create a robust regulatory environment that will enable the registrar to properly discharge his or her respective roles and responsibilities in respect of banks, controlling companies and banking groups on a single, cross-border or consolidated basis.
It is further strengthened in the following areas. To avoid repeating the areas that the Minister has mentioned, I'll just run through them quite quickly, also taking advantage that some of the people were listening: Regulation of all relevant banks and banking groups on a consolidated banking; stating the respective roles and responsibilities of consolidating and host supervisors; provision for co-operation and sharing of information between supervisors - currently the Act does not make specific provision for this co-operation; clarification of the responsibilities of banks, banking groups and boards of directors of banks and banking groups, which otherwise was not adequately provided for in the current legislation; increase of the reporting requirements of and providing comprehensive disclosure requirements for banks and banking groups; facilitation of the various options available to banks and banking groups in calculating minimum capital requirements in respect of credit risk exposure, market risk exposure and operational risk exposure; and elaboration of the supervisory review process in order to among other things, assess the capital adequacy and control environment of banks and banking groups.
In addition, the Bill also clarifies and strengthens the powers of the registrar to ensure compliance with the Act. He or she is empowered to issue circulars, guidance notes and directives to request information from relevant institutions and to impose administrative penalties. The registrar's power to object to the appointment of directors is also clarified.
Currently, the regulatory authority of the registrar is limited to banks, and this Bill extends it to divisions and controlling companies of banks in certain respects.
This Bill also imposes an obligation on the registrar to keep a register of registered controlling companies, branches, eligible institutions, representative offices of foreign institutions or the subsidiaries and branches of banks.
The other amendments are more of a technical nature and I would not want to bore the House with those.
The committee held public hearings on this Bill and based on the responses received we are satisfied that the Bill is acceptable to the industry and that it is in the interest of all South Africans.
According to the note on assessment of the economic impact of Basel II by National Treasury, SMEs are not going to be adversely affected by the regulatory capital requirements introduced by Basel II. We are assured that capital requirements for lending to retail SMEs are actually expected to decrease under Basel II, which will in turn have a positive effect on SMEs' access to finance. We are also assured that the introduction of Basel II requirements will not change the banks' commitment in terms of the Financial Services Charter and BEE financing.
The commitment of the ANC-led government to the total emancipation of our people from all kinds of bondage, including economic bondage, is at the heart of this legislation. The ANC supports this Bill.
Thank you, Chair. [Applause.]