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    SARB Proposes Timeline for Implementation of Final Basel Reforms

    May 11, 2022

    The South African Reserve Bank (SARB) published Guidance Note 4/2022 on the proposed revised implementation dates for certain regulatory reforms under Basel III. SARB also proposed directive on the criteria for identifying simple, transparent, and comparable (STC) term and short-term securitizations.

    The guidance note on proposed implementation dates for Basel reforms is relevant for banks, branches of foreign institutions, controlling companies, eligible institutions and auditors of banks or controlling companies. The Prudential Authority is proposing to implement the outstanding regulatory reforms in South Africa on the dates set out in the guidance note. The proposed revised implementation dates for specified regulatory reforms is as follows:

    • January 01, 2023 for reforms on interest rate risk in the banking book (IRRBB) and January 01, 2024 for reforms on disclosure requirements related to IRRBB
    • October 01, 2022 for revisions to the securitization framework
    • January 01, 2024 for revised frameworks on standardized approach for credit risk, internal ratings based approach, operational risk, and revised exposure definition under leverage ratio framework
    • January 01, 2024 for minimum capital requirements for market risk and revised credit valuation adjustment framework
    • Implementation of 72.5% of output floor to be phased in over five years commencing from January 01, 2024 until January 01, 2028

    The proposed directive on securitizations directs banks, controlling companies, branches of foreign institutions, controlling companies, eligible institutions and auditors of banks or controlling companies that:

    • to qualify as a STC compliant securitizations, the term or short-term securitization structures must meet all the STC criteria as set out in Annexure A or Annexure B, as applicable
    • to qualify for the differentiated regulatory capital treatment, the term or short-term securitizations must also meet the additional criteria for capital purposes as set out in Annexure A or Annexure B, respectively

    The comment period on he proposed directive ended on May 16, 2022 while the proposed implementation date of the directive is July 01, 2022. 

     

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    Keywords: Middle East And Africa, South Africa, Banking, Basel, Regulatory Capital, Market Risk, Credit Risk, IRRBB, Large Exposures, Output Floor, Implementation Timeline, Covid-19, Securitization, Leverage Ratio, STC Securitization, BCBS, SARB, Reporting, Headline

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