SARB published a Directive (D1/2021) on additional requirements for domestic systemically important banks or D-SIBs; these requirements relate to the bi-annual submission of credit-related statutory BA returns (BA 200 and BA 210), based on group consolidated information. Another recent SARB Directive (D3/2021) specifies detailed references to the regulatory returns that have to be audited, reviewed, or concluded upon under a limited assurance framework, in part fulfilment of the auditors’ respective reporting requirements in relation to Regulation 46. Regulation 46 imposes certain reporting duties on the auditors of banks, controlling companies, and branches of foreign institutions (collectively banks).
D1/2021 on D-SIB requirements replaces Banks Act Directive 2/2016, dated 13 April 2016, and specifies the following requirements with regard to submission of the credit-related BA forms:
- The data forms be submitted six-monthly, based on a calendar year (that is, end-June and end-December data of each year) within 30 business days, immediately following the period to which the return relates.
- Directives and interpretations for the completion of the statutory forms BA 200 and BA 210 are outlined in regulations 23 and 24 of the Regulations relating to Banks, respectively.
- The certification and rendition of these returns shall comply with regulation 4 of the Regulations.
- In line with regulation 6 of the Regulations, the returns shall be submitted electronically by using the data sets "T8" and "S4." These datasets shall include the statutory forms BA 200 and BA 210 on a controlling company consolidated level and a bank consolidated level respectively.
- All line items on the consolidated statutory forms BA 200 and BA 210 are mandatory. The Directive presents a table that outlines which line items are not mandatory in the submission of the consolidated credit returns.
D3/2021 on reporting requirements directs auditors of banks to perform an audit, review, or limited assurance engagement on the respective regulatory returns specified in regulation 46(6) of the Regulations, in accordance with the detailed audit matrix provided in Annexure 1 for reports submitted to the Prudential Authority in relation to engagements for financial years ended on or after February 28, 2021, for the purposes of reporting in terms of Parts A to E or Parts A to D of the illustrative regulatory reports in relation to South African and foreign operations, respectively. The directive informs that, to date, the aforementioned parts of the illustrative regulatory reports contained the detailed breakdown of the sections of the various regulatory returns listed in regulation 46(6) of the Regulations. However, in light of the ongoing regulatory changes to align the Regulations with Basel III post-crisis reforms as well as changes required as part of ongoing regulatory reviews, the detailed references to the regulatory returns from Parts A to E and Parts A to D of the illustrative regulatory reports have been removed to limit the frequency of changes to these reports. The returns listed in Annexure 1 include BA 100, 110, 120, 130, 200, 210, 220, 300, 310, 320, 325, 330, 340, 350, 400. 410, 500, 600, 610, and 700. Regulation 46(1) of the Regulations requires the auditor of a bank to report annually, within 120 days of the financial year-end, on the bank’s financial position and the results of its operations, as reflected in the regulatory returns specified in regulation 46(6) of the Regulations.
Keywords: Middle East and Africa, South Africa, Banking, D-SIBs, Credit Risk, Basel, Reporting, BA Returns, SARB
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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