The Standing and Select Committees on finance met jointly to adopt the Medium Term Budget Policy Statement (MTBPS) report. The general view was that the recommendations are binding, therefore realistic targets have to be set. The Money Bills Act imposes an obligation on the Committee to determine whether the debt levels are reasonable, and it was noted that this would be a matter that had to be debated further at a later stage. The main concern was whether the Committee is doing enough in terms of its obligations as contemplated in the Money Bills Act. There were no substantial changes to the report, but Members had a fairly lengthy discussion on certain wording and stressed the need to ensure that the figures reflected in the report are accurate. The report was adopted by both Committees, with objections noted from the DA.
The Standing Committee on Finance then continued with its deliberations of the Financial Sector Regulation Bill, with discussions led by Mr Roy Havemann of National Treasury. Members noted that they had not had an opportunity to go through all the latest amendments and the draft Bill, and could not comment in depth. It was agreed that the Chairperson and his team should go through the draft in detail and give a high-level summary back to the Committee.
One of the issues was the proposed approach of the National Treasury (NT), for the Minister to determine the fees and levies of the regulators, although the regulators will be given flexibility in respect of inflation adjustment. There was concern that this might have the possibility of infringing on operational independence, and be contrary to the principles of the NT red book. The NT maintained that the provisions will not affect operational independence and was comfortable with testing the provisions against the Red Book. Levies and fees could only be charged in accordance with the Money Bills Act. Chapter 16 would be re-worked to deal with Committee concerns. The Committee would write to the National Credit Regulator for its comments on the Bill. A more useful comparison was to Australia, although greater protection is offered to regulators in South Africa than in Australia. Clauses 239 and 240 were highlighted, setting out the processes of consultation and the powers of the parties. Clause 246 was particularly important, dealing with how fees and levies must be handled. Each financial sector body’s allocation of the levies collected must be transferred to the financial sector body’s designated account, in accordance with a payment schedule agreed between the financial sector body and the Financial Sector Conduct Authority. There will be a single invoice. In general it was accepted that the FSB has a good system and it will continue to be applied. Obligations as stipulated in the Public Finance Management Act would apply to regulators. There was much discussion on the transformation of financial institutions, and NT had proposed new wording, to emphasise this, and financial education and literacy were being strengthened in the Bill.
NT wanted to ensure that benchmark measurements were included, and noted that the definition of levy was to be clarified, to confirm that a levy could be imposed by any financial sector body in terms of legislation. The NT had accepted the comments of the Johannesburg Stock Exchange (JSE) on special levies. Consequential amendments had been made to clause 3. The services were now specified as being security services and foreign exchange. It was clarified that the work of the JSE is not regarded as a financial service. A definition of dealing was included, taken from the Financial Markets Act. JSE wanted to be included in the definition of financial stability.
The Banking Association of South Africa (BASA) made submissions, noting that this was quite late in the day but new legislation had recently come into effect in the USA and EU that impacted on banks. It was noted that clause 106(3)(v) was considered very wide. Clause 108(1)(q) was seen as a duplication and clause 106 could be strengthened to read “withdrawal or refusal”. Its main concern, however, was the consequential amendments to the Financial Advisory and Intermediary Services (FAIS) Act. Changes were needed to clarify when a person would be considered debarred, and a request was made to change the period of three months to six months, for operational reasons. A problem had arisen because as part of its G20 commitments, South Africa had undertaken to have a clear trading of over the counter derivative transactions. The current legislation does not allow for that. Collateral is sought in the form of an initial margin, either a government bond or cash. However, the Insolvency Act did not allow for this, made the process very protracted and caused international parties to be unwilling to accept the collateral, thus hampering the trade in over-the-counter derivatives. Cash might not be the short-term fix that it was hoped, because this might not fit the definition, could result in large cashflow out of the country and loss of interest.
NT was made aware of the situation in mid-October, and would be holding formal meetings shortly.
NT then noted that submissions had been made by the Johannesburg Stock Exchange, but they did not raise new issues. There had already been some changes to the schedules to accommodate the JSE.
Committee Report on Medium Term Budget Policy Statement (MTBPS): deliberations
Co-Chairperson Mr Y Carrim suggested that Members could come back later in the day with their comments on the observations and deliberations section in the report. He asked Members to go through the report from paragraph 5.
Co-Chairperson Mr C De Beer suggested that the Money Bills Act can be discussed in the last two weeks of January.
Members agreed that this was a reasonable MTBPS given the circumstances. The point was continuously made that circumstances are dire. The increases in unemployment were noted in paragraph 5.4.
Mr D Maynier (DA) suggested that the language in in the last sentence should be strengthened to “committee seriously concerned”.
Co-Chairperson Carrim agreed with Mr Maynier.
In paragraph 5.5, it was noted that the Committee is concerned about state guarantees.
In relation to paragraph 5.6, Mr Maynier suggested that the Committee should express the view that the Board needed someone with appropriate technical and aviation skills, which then led into the suggestion that a person with suitable skills must be appointed.
Co-Chairperson Carrim responded that the Committee has written to the Minister and the Director-General and this point had been made in the Budgetary Review and Recommendation Report.
Mr Maynier then referred to the GDP ratio, which had deteriorated to 70%. He questioned if the figure for contingent liabilities was correct, as he thought it might be closer to 60%
Co-Chairperson Carrim suggested that the figure be changed to”ranging between 60-70%”.
Ms T Tobias (ANC) remarked that she remembered noting down that it was 50% and this report seemed to be exaggerating it.
Co-Chairperson Carrim said that his notes suggested a conclusion on 70%.
Ms Tobias suggested that Members must check back on their notes before the report was ready for submission.
Co-Chairperson Carrim suggested that the points be separated out, in view of National Treasury's comment that the fact of a contingent liability had to be highlighted. He still thought that since no accurate figure could be put to this, the wording of the report should reflect that these are “estimates ranging from...”
Mr Maynier suggested that one correction was needed on the GDP figure and the amount of the contingent liabilities must be checked.
Members agreed that a point from paragraph 5.8 would be moved up to the preceding point, and asked for removal of one item under paragraph 5.9.
Under paragraph 5.17, Mr Maynier did not recall there having been a separate submission, but Co-Chairperson Carrim assured him that there was a separate submission.
Most of paragraph 6 remained unchanged.
Mr Maynier said that he accepted the general view but had not been able to find the breakdown of the R987 billion.
Co-Chairperson Carrim indicated that he would attend to the matter.
In paragraph 6.21, Members agreed that there would not be content change but that there would be a sequence change.
In paragraph 6.24, Mr Maynier noted that the number read “40% of R600 billion” but that the Chief Procurement Officer disputed the figure. He suggested that the figure be verified.
The National Treasury representative indicated that the figure will be verified and that the R987 billion referred to in paragraph 6.20 was on page ten of the MTBPS.
Ms Tobias remarked that the figures in the report should be accurate.
Co-Chairperson Carrim responded that the figures can always be verified, but he agreed with the point, and asked that Members move on.
Mr Maynier commented that it is indeed correct that the recommendations are important. However, the report lacks strong statements on cost containment, as indicated on the Parliamentary Budget Office's slide 21. Although there had been success to a certain extent, there is wasteful expenditure.
Ms Tobias said that qualifying this with “to some extent” amounted to discounting what had been achieved. She stressed that the report should be clear. If Mr Maynier intended to make any recommendations on that point, she asked that they be written down and considered by the Committee.
Co-Chairperson Carrim responded that Mr Maynier had made a submission that stated that the Committee requires the Auditor-General to do an annual report of the cost-containment implementation plan of state entities and local governments, which is to be tabled in Parliament. More so, it is a good recommendation, however the concerning factor is that; there are thirty six recommendations and are meaningless unless followed up on. Additionally that it is hard to do, given that the AG does not have the capacity. The Committee cannot instruct the AG, suggested to contact National Treasury to explore the possibility of cost containment reports with the AG. All parties agree that there is still more room for cost containment.
Ms P Kekana (ANC) enquired whether the Chairperson’s response to Mr Maynier has been captured in the report.
Co-Chairperson Carrim clarified, in respect of cost containment, that there was an observation that while there has been progress, there is still room for improvement, and the Committee would like National Treasury to do more in this regard with the Auditor-General as well.
Co-Co-Chairperson de Beer (ANC) referred members to slide 12 of the presentation by Mr Michael Sachs, for clarity.
Mr Maynier agreed with Co-Chairperson Carrim on cost containment and further highlighted that during the MTBPS presentation Co-Chairperson Carrim had expressed the view that Parliament was not doing enough on the economic growth fund. The proposal was that an ad hoc committee in Parliament should look into structural reforms and their implementations. This idea should not only be seriously considered, but also captured in the report.
Co-Chairperson Carrim responded that the concept had been noted as one to consider in the Report. The Portfolio Committee on Economic Development should take responsibility for such matters. The report casts an obligation on the Committee, so the main question is whether there will be implementation of points made in the report.
Co-Chairperson de Beer mentioned that the Parliamentary Budget Office (PBO) is already busy doing something similar; namely, an overview on economic growth on a quarterly basis. National Treasury can also come up with a review, on a quarterly basis, to present to the Committee. The Committee would have to look into its programmes.
Ms Tobias commented that the Committee has a responsibility to ensure that the recommendations are implemented, even if the Committee has to spend more time working on this. NT raised the issue of inefficiencies of management of the property portfolios, and shared similar sentiments to the Committee's. She asked if this point had been captured in the report.
Co-Chairperson Carrim clarified that this issue was covered in the section under “Observations”, noting that the amount spent on leases as well as maintenance is far too much. The recommendation is that NT discuss this with other Departments to reduce the costs.
Dr M Khoza (ANC) commented that the report has already been endorsed, but the budget deficit had not been dealt with sufficiently. On paragraph 6.3 and 6.4, he was concerned that there may be reduction of public spending, if not taken seriously, and the Committee will be caught off guard.
Co-Chairperson Carrim responded that the budget deficit targets were at 2.3% to 2.4%, and the comments were that the budget deficit had not gone up, compared to the decline in economic growth. An observation made in the report that the budget deficit targets was acceptable. If Dr Khoza wanted to make an observation in the report about the budget deficit targets being of concern, it must be noted that this was not the majority view of the Committee.
Dr Khoza responded that it was not her intention to include this comment in the report, but it was important to compare spending patterns as well as the growth of the spending areas. The budget deficit is not normal.
Mr Maynier mentioned that the questions of deficits and level of spending was in the report and the Committee had expresses that it was of serious concern. In future the challenge would be to get into grips with the section in the Money Bills Act that says that the Committee has an obligation to consider whether the debt levels are reasonable, and that would have to be something addressed in the debates in future. He had asked the Financial and Fiscal Commission (FFC) whether the debt levels were reasonable and what measurement was being used, to which it had responded that there was not one developed as yet. The International Monetary Fund indicators suggested that debt levels should be about 40% of GDP.
Ms Tobias remarked that political parties often agree when it came to economic policies, but there was a huge difference in political economic policies. NT indicated that different methodologies are used, and there is no single methodology that is entirely correct. If the Committee intends to measure the current deficit, this could be done, so that the Committee would be moving from an informed position, although this was not the issue under discussion. The Minister indicated that debt service is about R2 to 3 trillion and further set out all the instruments being utilised.
Co-Chairperson Carrim interjected that there is no recommendation being made, and Mr Maynier and Dr Khoza had made the point that the Committee should consider the matter. This was an obligation under the Money Bills Act, and clearly had to be done.
Ms Tobias wanted to clarify that she was not suggesting that the Committee should not do this, but she was not sure that the point made by Mr Maynier was correct at the moment, and the wording in the report may need further consideration.
Dr Khoza said that the issue was raised in line with paragraph 6.4, and she was not sure whether the Committee understood the implication of the wording, and particularly in relation to the Committee being required to review spending patterns. If the Committee was satisfied on the wording, she would go along with it.
Ms P Kekana (ANC) asked Co-Chairperson Carrim to rule on the matter.
Co-Chairperson Carrim noted that the report as a whole expressed that there were concerns with the targets, and the Committee could indicate that it did not agree with the targets set.
Adv Frank Jenkins, Senior Parliamentary Legal Adviser pointed out that section 85 stated that when amendments are made, Parliament must comply with the fiscal principles.
Co-Chairperson Carrim said he would look at the Money Bills Act, and when it was amended the Committee must consider all points raised in this meeting.
Mr Maynier said that at some point the Committee must debate on the reasonable debt levels. He suggested that the Committee approach the PBO and ask it to start working on this.
Co-Chairperson Carrim said that this was not captured as a recommendation nor policy issue, and the report would note it as a matter still to be discussed.
Co-Chairperson de Beer reminded the Committee that in 2014 the PBO did a similar analysis, and he suggested that Members should check back. Pages 5 and 6 of the MTBPS Report set out what Members had been debating for the past fifteen minutes.
Each of the Committees in turn then moved for adoption of the report. Objections were raised by the DA.
The report was adopted with the objection noted.
The Select Committee on Finance was excused.
Financial Sector Regulation Bill: deliberations by the Standing Committee
Mr Roy Havemann, Chief Director: Financial Markets and Stability, National Treasury, led the deliberations on the Financial Sector Regulation Bill (the Bill).
Co-Chairperson Carrim noted that the deliberations are almost at the final stage. Stakeholders received the latest version of the Bill and have till noon to make their submissions. The Johannesburg Stock Exchange (JSE) had made submissions, as well as the Banking Association of South Africa (BASA), which was present. The Committee would consider new submissions but would not re-consider matters already deliberated on.
Mr Havemann made the following points:
Fees and levies
NT proposes an extensive reworking of Chapter 16 to deal with some of the concerns that the Committee had.
Co-Chairperson Carrim asked if Adv Jenkins had gone through the latest version of the Bill, and he responded that he had not had a chance to do that.
Co-Chairperson Carrim remarked that the process of the schedules is complete, and asked that Adv Jenkins go through those. The Committee has also dealt with all the policy issues. On the issue of the DA insisting that the National Credit Regulator (NCR) should be incorporated into the Act, he indicated that he would write to the NCR to enquire what comments it had on the Bill.
Mr Havemann said that NT has taken a conservative constitutional position. which is that any levies raised on behalf of regulators must be covered in a separate Bill to be brought to the Committee. The Money Bill will essentially provide for all the amounts of money that are to be collected from the industry. There is quite an improvement in the current system, where the Financial Services Board (FSB) is allowed to gazette its fees. The amount of money regulators get for their work will be regulated through the Money Bill, and there is a little flexibility, where their income rises by inflation plus about 1% to 2%; any more than that would have to follow a set procedure. It had been found in the past that if there was not this provision for adjustment around inflation, NT has to come back to Parliament for approval on adjustments.
He added that the proposal is that there be a fee applied where the regulator provides services and general levies; this will cover actual day-day running of the organisation.
Mr Ismail Momoniat, Deputy Director General, National Treasury, indicated that there is a draft Bill that the NT can share with the Committee.
Co-Chairperson Carrim asked that the draft Bill be emailed to the Committee so that comments on it could be raised at the next meeting.
Mr Havemann continued reading through the Bill, and noted that the important factor is that levies and fees can only be charged according to the Money Bills Act.
Mr Maynier commented that the whole question of fees and finances is important from a cost containment point of view, and it also raised issues around operational issues and independence. The “Red Book” set out principles that regulators should be independent, but he wondered if the raising of fees and levies impacted on that; has the legal test of operational independence been met?
Mr Momoniat responded that there are degrees of independence and this is debatable. Regulators want full independence, but the criticism of that is that all standards are then set by regulators and it is felt that the determination of fees and levies should happen with public oversight. In the UK and US, the preferred approach is to have some Ministerial and/or governmental oversight of fees. NT has taken the approach that the Minister is allowed to comment, but for the initial three to five years a Ministerial approach will be required, so that the regulators will not have the right to unilaterally determine their own fees. The principle of accountability is important.
Dr Khoza commented that financial regulators are abusing their authority, and total independence will heighten the chances of corporate politics and exclusion.
Mr S Buthelezi (ANC) remarked that when fees and levies are determined other than by the regulators then it ties in with budgets. In the gambling industry, levies are charged by the Provincial Gambling Boards, and this has not compromised the independence of the regulators.
Adv Jenkins said that “independence” should not be defined in the context of Chapter 9 institutions, where financial independence and operational independence is required. In this Bill, the regulators are implementing obligations set by the government. He suggested that there is no single test that can be applied to determine whether there are constitutional issues.
Mr Maynier said that he had raised this point because the test of operational independence is not arbitrary. The test had been established by NT itself, in the “Red Book”, under principle 5A. The question then is how to objectively test whether NT has actually adhered to its own principles in formulating the Bill. There must be a test in law that sets out the definition of operational independence. He thought the Committee must go back to the Red Book and compare the Bill against it, as he believed the Bill fell short of the principle.
Mr Momoniat expressed the view that the regulators will be operationally independent. Once the initial benchmarks are set, the regulators can determine, up to the amount that the formula provides as linked to inflation. Regulators are public entities and the budgets should be allocated in Parliament. He thought that the NT would not have any problem in testing the Bill against the Red Book, particularly since the principles were not cast in stone, and international standards must be taken into consideration.
Mr Havemann suggested that a more useful comparison was to Australia, where regulators were funded from the fiscus and applied the Treasury budget process. In the event of disagreements and political interference, the number of regulators can be reduced. In Australia there is not total operational independence. In South Africa, the Minister can do something similar, but by introducing the Money Bill into Parliament. There is greater protection to regulators in South Africa than in Australia.
This clause sets out a process for regulators to follow in determining fees and levies, and also ensures that they are not over-spending.
Sub-clause (9) is important because it states that for the financial bodies other than the Tribunal, the Minister must approve the fees and levies in any year and if these are excessive a procedure is set out. Mr Havemann repeated that regulators are being given room to increase their fees and levies according to the inflation rate, as will become apparent in the Money Bill.
This deals with process of consultation that regulators have to follow.
Mr Buthelezi (ANC) enquired about the type of inflation that the Bill refers to.
Mr Havemann responded that it is the consumer price index as published by Statistics South Africa.
Mr Havemann noted that this deals with the process of acquiring information by a financial sector body.
This deals with the financial sector body's obligation to provide invoice for levies payable.
Mr Havemann indicated that this deals with the prescribed rate of interest, and there can be exemptions if there is a major issue.
This deals with management of fees and levies by the regulators. Sub-clause (2) indicates that levies imposed in accordance with section 237(1)(b), and interest accrued under clause 244, must be collected by the Financial Sector Conduct Authority and paid into a bank account designated for that purpose, which is in the same name as the Financial Sector Conduct Authority.
Sub-clause (3) says that each financial sector body’s allocation of the levies collected must be transferred to the financial sector body’s designated account, in accordance with a payment schedule agreed between the financial sector body and the Financial Sector Conduct Authority. The basis of the clauses is that there will be a single invoice. There were long discussions, but in general it was accepted that the FSB has a good system and it will continue to be applied.
This clause imposes similar obligations on the regulators, as stipulated in the Public Finance Management Act.
Co-Chairperson Carrim remarked that he had not gone through the Bill, but he would do so and get back to Mr Havemann on any issues discovered.
Mr Momoniat added that PFMA applied to public entities, except for the prudential authorities. The voluntary ombudsmen do not fall under the PFMA, so there had to be provisions on, for instance, the need for annual reports. This Bill to a large extent did contain duplications for the conduct authority, to whom the PFMA applied.
Co-Chairperson Carrim noted that the Committee did not have time to look at the latest version of the draft Bill.
Mr Havemann mentioned that new Chapter 16 and the Money Bills are the large and substantive issues.
Item B set out the issues to be included in the Money Bill.
Item C set out the constitutional issues. NT had taken a conservative approach.
Mr Maynier indicated that he had not had time to go through the whole Bill.
Mr Havemann said that there had been a lot of discussions on financial institutions' transformation, and NT has proposed new wording to the effect that the Bill is intended to deal with the issues. Financial education and literacy are being strengthened in the Bill.
Mr Havemann said that the Minister can allow different pieces of the law to come into effect as required. It has to be done through regulations and a lot of consultation will be needed.
Co-Chairperson Carrim noted that the Committee did not have any immediate questions to ask on the broad policy issues. He noted that the Committee needed more time to go through the provisions outlined by Mr Havemann.
Banking Association of South Africa (BASA) submissions
The delegate from BASA indicated that there were three issues that BASA wanted to raise, and one was significant. BASA apologised for raising issues late but international legislation had come into effect in September, and the impact is now recognisable on the banks.
Clause 106 (3) (v) was considered to be very wide and inclusive, speaking to all financial products and services.
Clause 108 (1) (q)was a duplication of clause 106(3)(v). BASA proposed that clause 108 (q) be deleted, keeping clause 106(3)(v). It should furthermore be strengthened by changing “withdrawal” to read as “withdrawal or refusal”, thus supporting the all-inclusive approach.
The representative from NT responded that the submissions had been noted.
Co-Chairperson Carrim noted that the Committee was not taking a position yet.
Consequential amendments to the Financial Advisory and Intermediary Services Act(FAIS)
BASA said that the main issue is around proposed amendments to sections 14 (1) and 14 (5) of FAIS. BASA recommended that the sections should be rephrased to make it certain that a person can only be debarred for reasons that were made known to the financial services provider while the person was still in the employee of the service provider. Whilst that was essentially what sections 14(1) and (5) said, there was a need to make this clearer. The three months mentioned in section 14(5) should be extended to six months, because of practicalities and operational issues.
NT believed that the sections were clear but could revisit them, as well as the time frame.
Co-Chairperson Carrim remarked that the issues being raised are not policy issues. He noted, having asked, that no Members objected to the extension from three to six months.
BASA submitted that it had tried to get a specialist to attend the meeting, but this was impossible due to the short notice. As part of its G20 commitments, South Africa had undertaken to have a clear trading of over the counter derivative transactions. The current legislation does not deal with the commitment.
There are also problems with the Insolvency Act when trading with international counter parties, as there has to be collateral in the form of an initial margin, which is collateral either by way of a government bond or cash. The definition of “default” in this context is the bank becoming insolvent and unable to honour its obligation towards the counter party. International legislation expects that the collateral will be easily available to the counter party, but this is not possible under the current version of the Insolvency Act. It was hoped that this problem would be solved by the amendments. However, USA laws came into effect in September and EU laws will take effect in January 2017. The current Insolvency Act makes the process too long, and it has already impacted on the multinational banks, because international counter parties do not want to accept the collateral and hamper the trading in over the counter derivatives. It was initially thought that cash would be a short term fix for the problem, but the counter parties have indicated that they are not convinced that the cash would be easily and readily available. Legal opinion has to be sought on whether cash will fit into the definition of “easily and readily available”. If it is, there will be a large cash outflow out of the Republic, into foreign banking accounts that may either not earn interest at all, or be subject to negative interest. If the counter parties are not comfortable, banks will not be able to trade.
Co-Chairperson Carrim commented that the issue is complex.
Mr Havemann responded that NT was made aware of the situation in mid-October, and formal meetings are to be held shortly.
Co-Chairperson Carrim asked for the JSE submissions.
Mr Havemann responded that he had read the submission and there was nothing new being raised.
Ms Kekana thought that the issue had been resolved, and asked if no consensus had in fact been reached.
Mr Havemann expressed that there was frustration over the issue and NT was trying to find a solution; there had already been some changes to the schedules to accommodate the JSE.
Co-Chairperson Carrim commented that the Committee will look into the issue.
Ms Tobias was worried that this might lead to litigation between the parties.
Mr Momoniat indicated that he will have another meeting with JSE.
Mr Havemann then continued with comments on the Bill.
A lot has happened since the Bill was tabled. NT would like to ensure that a benchmark measurement in law is included.
Co-Chairperson Carrim indicated that there are two options. He suggested that either NT could carefully go through all the clauses or give an overview.
Members indicated that they would prefer Co-Chairperson Carrim and the team to go over the Bill and give an overview after doing so.
Mr Havemann noted that the wording of “levy” was clarified. Previously the legislation described a levy as one that was imposed in terms of the Levies Act. In future it would be one that would be imposed by a financial sector body, in terms of legislation. The possibility of legislation to deal with levies is included. The wording has been changed to refer to levy body and fees.
This set out the provision for a bench mark.
Mr Havemann drew attention to a comment by JSE, which was accepted. A “special levy” was one in terms of legislation. He also drew attention to the wording on the statutory ombud.
Mr Havemann drew attention to consequential amendments, in clauses 2, where the wording was changed.
In clause 3, the first change related to activities conducted “in the Republic” to limit the scope of the Bill.
Changes to clause 3(1) (b) would ensure that there was a full set of instruments that should be covered.
Clause 3 (1)(d), (e) and (f)were explained. Initially there was a general reference to services as specified in the financial sector law. There were a number of questions on which services the clause relates to, therefore, the services are specified as security services, foreign exchange.
Clause 3(1)(g) had been amended after discussions with the credit regulator.
Clause 3 (1)(h) set out the outsourcing arrangements.
Clause 3 (2) related to the market infrastructure, which is related to the JSE comments, clarifying that what the JSE does is not a financial service.
In Clause 3 (3, nothing had been changed except adding a provision on the benchmarking.
He added that the definition of dealing was taken from the Financial Markets Act.
He indicated that the comments of the JSE were accepted, as the JSE wanted to be included in the definition of financial stability.
This had to do with the transformation of the financial sector, which is now the object of the Bill.
The Committee indicated, in answer to a question from Co-Chairperson Carrim, that since there was no time to go through the entire latest draft, the Chairperson and his team should rather provide an overview.