Featured Product

    SARB Issues Guidance on Dividend Distributions and Bonus Payments

    February 18, 2021

    SARB published the guidance note (3/2021) on the distribution of dividends on ordinary shares and payment of cash bonuses to executive officers and material risk-takers, in light of the pandemic and the temporary regulatory capital relief provided by the Prudential Authority. The guidance note outlines the need for banks to act prudently when considering making the said distributions in 2021. This guidance note replaces the guidance note 4 from 2020 and is relevant for all banks, branches of foreign institutions, controlling companies, eligible institutions, and auditors of banks or controlling companies.

    The note specifies that benefits of the regulatory relief measures provided by the Prudential Authority in 2020 should not be utilized for the distribution of dividends and payment of bonuses. on dividends and bonus payments in response to COVID-19. SARB considers it critical that banks continue to fulfil the fundamental role of providing the required funding, among other things, to households and businesses amid the pandemic. Thus, it is essential that banks continue to appropriately conserve capital to retain their capacity to support the real economy in an environment of heightened uncertainty that continues to be caused by COVID-19 pandemic. The Prudential Authority expects banks to take into consideration the adequacy of their current and projected capital and profitability levels, internal capital targets, risk appetite, and current and potential future risks of the global pandemic when making distributions of dividends on ordinary shares and payments of cash bonuses to executive officers and material risk-takers in 2021. The responsibility for approving the distribution of dividends on ordinary shares and the payments of cash bonuses to executive officers and material risk-takers ultimately rests with the board of directors of a bank. In those instances where bank boards of directors do approve the distributions of dividends on ordinary shares and/or payments of cash bonuses to executive officers and material risk-takers in 2021, payout ratios should be prudent and commensurate with the assessment of the current conditions and potential future uncertainty.

     

    Related Links

    Keywords: Middle East and Africa, South Africa, Banking, Dividend Distribution, COVID-19, Remuneration, Regulatory Capital, SARB

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7307