Entities supervised by the Prudential Authority (PA) will pay 3.3% more in levies and fees if the Authority’s revenue-raising proposals for the 2026/27 financial year are adopted.
The entities supervised by the PA include banks, insurers, co-operative financial institutions, certain market infrastructures (exchanges, central securities depositories, clearing houses, central counterparties, trade repositories), over-the-counter derivative providers (ODPs), and the Road Accident Fund.
The PA, a juristic person operating within the administration of the South African Reserve Bank, this month published for public comment its proposed budget, levies, and fees for the coming financial year, as required by the Financial Sector Regulation Act.
The Financial Sector and Deposit Insurance Levies Act, which commenced on 1 April 2023, provides for the imposition of levies on supervised entities to fund the PA. Table A in Schedule 1 to the Act sets out the formula for calculating the levy.
The levy generally consists of a base amount plus one or more variable amounts based on entity-specific metrics – for example, total liabilities, gross written premiums, or the value of trades cleared/settled.
The PA proposes to increase both the base amount and, where applicable, the variable amount/s by 3.3%. The caps on the maximum levy payable will also increase by 3.3%.
In addition, the Financial Sector Regulation Act enables the PA to collect fees to fund the performance of specific functions in terms of the Act, as well as the Banks Act, Co-operative Banks Act, Insurance Act, and Mutual Banks Act. The PA is proposing to increase these fees by 3.3%.
The Authority said the 3.3% increase is in line with projected Consumer Price Index (CPI) inflation for the relevant period. In July this year, the SARB’s Monetary Policy Committee forecast CPI inflation at 3.3% for 2026.
Budget deficit cut
The PA estimates it will raise R613.39 million from levies, fees, and other income in 2026/27 (2025/26 budget: R574.72m), with levies accounting for 98% of revenue. This will cover only 40% of the total costs (direct, indirect, and IT) of prudential regulation, which is estimated at R1.524 billion, compared with total expenditure of R1.846bn in 2025/26.
The PA said it will be implementing a series of cost-cutting measures, which are designed to streamline processes, eliminate inefficiencies, and ensure the optimal use of resources across departments. As such, the 2026/27 deficit (R910.27m) reflects a decrease of R361m (28%) compared with the 2025/26 budget.
As in previous years, the SARB will cover the rest of the PA’s costs.
The Authority said the SARB’s contribution towards the costs of running the PA reduces the amount that the central bank pays to the government from its profits/surplus. “Consequently, the reduction in income to the fiscus has an ultimate impact on taxpayers, who will invariably carry the cost of regulation and supervision, particularly for the entities that fall under the purview of the PA.”
Banks (56%) are the main contributors to levy revenue, followed by insurers (38%), financial market infrastructures (5%), and ODPs. The PA estimates that levies will bring in revenue of R604.19m in 2026/27 (R567.67m).
The PA derives most of its fee income from insurers (97%), followed by banks. Fee income for 2026/27 is estimated at R9.046m (R6.899m). In addition, the PA estimates it will collect fees of R156 000 (R155 652) from the licensing of foreign banks with representative offices in South Africa.
Personnel costs compromise 45% of the PA’s expenditure.
The PA said it plans to recruit 43 positions during the 2025/26 financial year, increasing its total staff complement to 397 by 2026/27, which is 12% of the SARB’s head office headcount of 3 367 (including current vacancies). Over the next three financial years, the PA plans to hire 125 additional staff members, increasing the total head count to 522.
The PA said its staff complement has increased by 376% since the implementation of the Twin Peaks regulatory framework, which separates prudential regulation (handled by the PA) from market conduct regulation (handled by the Financial Sector Conduct Authority). The Twin Peaks model was implemented from 1 April 2018.
Deadline to comment
Comments on the budget, fees, and levies proposals above must be made using the comments template and submitted to PA-Finance@resbank.co.za for the attention of Henna Strijdom or Filla Swart by 16 October 2025.
Downloads:
- Explanation of the budget, estimates of expenditure, fees, and levies
- Budget for the 2026/27 financial year
- Draft fee determination
- Levy schedule
