National Treasury has indicated two proposed changes to the Financial Intelligence Centre Act (FICA) provisions in the anti-money laundering Bill but proposed no amendments in response to feedback about amendments to the Financial Sector Regulation Act (FSRA).
Read: Law Society calls for safeguards as AML Bill expands regulatory powers
Responding to public submissions to Parliament’s Standing Committee on Finance (SCOF) on 26 August 2026, Treasury said it would clarify the legal basis on which the Financial Intelligence Centre (FIC) could conduct a lifestyle audit at another public body’s request and make a further technical amendment to FICA.
It also maintained that concerns about the Bill’s proposed changes to the financial-sector regulatory perimeter, licensing, information-gathering, and investigation provisions did not require amendments.
The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2026 proposes changes to the Close Corporations Act, Nonprofit Organisations Act, FICA, Companies Act, and FSRA as part of efforts to strengthen South Africa’s anti-money laundering and combating-the-financing-of-terrorism framework.
The proposed changes to the regulation of non-profit organisations dominated both the public hearings and Treasury’s feedback to stakeholders. The FICA and FSRA responses, however, are of particular relevance to accountable institutions and the financial services industry.
No changes proposed to FSRA amendments
The Law Society of South Africa (LSSA), which presented submissions during SCOF’s public hearings earlier this month, raised concerns about four areas covered by the proposed amendments to the FSRA. Its comments focused on the expansion of the regulatory perimeter, the possibility of dual licensing, information requests directed at significant and beneficial owners, and the threshold for launching an investigation.
No changes were proposed to these provisions. Retha Stander, senior legislation manager at the Financial Sector Conduct Authority, said the existing Act addressed several of the concerns raised by stakeholders.
Clause 36 would expand the Minister of Finance’s designation power to arrangements that are “similar in nature to”, or have “similar outcomes to”, financial products or instruments, irrespective of the technology used to provide them. The LSSA submitted that these formulations were too vague and proposed referring instead to arrangements with “substantially the same economic function, risk profile, or consumer profile”.
Stander said the terms used in the Bill were sufficiently established in law and could be assessed against the FSRA’s definitions of financial products and financial instruments. She said the wording was intended to preserve flexibility for future market and technological developments.
The LSSA also recommended defining “arrangement” and suggested that the FSCA and Prudential Authority (PA) should issue guidance on how the provision would be applied. Stander said the term was intended to retain its ordinary meaning and defining it could unnecessarily limit the provision’s application. The suggestion concerning guidance was noted, but she said the provision was intended to enable future designations rather than regulate existing arrangements. Guidance could be considered if it became necessary.
Clauses 37 and 38 would permit a responsible authority, through a standard, to require a category of financial institutions to obtain an FSRA licence even if those institutions were already required to be licensed under another financial-sector law. The Bill’s memorandum says the power would, among other things, enable regulators to impose anti-money laundering requirements.
Stakeholders raised concerns about how this dual-licensing regime would operate in practice, including the potential for regulatory overlap and the need for co-ordination between the FSCA and the PA. Stander said the FSRA already contained comprehensive requirements governing co-operation and memoranda of understanding between the two regulators and the South African Reserve Bank. No further amendment was therefore considered necessary.
Stander described the proposed amendments as an enabling measure to address circumstances in which financial institutions fell within a regulator’s ambit but could not be licensed because of the present wording of section 111. Because the provision was forward-looking, she said it was not possible to estimate how many institutions might ultimately be required to obtain an additional licence.
Clause 39 would extend the obligation to comply with a financial-sector regulator’s information request beyond supervised entities to include significant owners and beneficial owners. The LSSA recommended that the provision expressly protect legal professional privilege and constitutionally protected information.
Stander agreed that these were important protections but said the FSRA already protected legal professional privilege and confidential information. The FSCA therefore considered an additional amendment unnecessary.
Clause 40 would change the circumstances in which a financial-sector regulator may instruct an investigator to conduct an investigation. It removes the reference to an investigation “in respect of any person” and changes the test from a reasonable suspicion that a person may have contravened, may be contravening, or may be about to contravene a financial-sector law to a reasonable suspicion that the law has been, is being, or may be about to be contravened.
The LSSA proposed that the decision to institute an investigation should be recorded in writing and state the grounds for the suspicion, the scope of the investigation, and its statutory purpose.
Stander said public-law principles already required proper records of decision-making and that similar obligations applied to regulatory decisions throughout the FSRA. She said expressly codifying the requirement for this particular power could create uncertainty about whether it applied to other decision-making powers under the Act. The FSCA therefore did not consider an amendment necessary.
Proposed changes to the FICA provisions
Treasury took a different approach to the feedback on the proposed FICA amendments, indicating two changes to the Bill. The more substantive would clarify the legal basis on which the FIC could conduct a lifestyle audit at the request of another public body.
The second would amend clause 18, which deals with protection from civil and criminal action for institutions and individuals acting in good faith under specified provisions of FICA. Treasury said a reference to section 30, which concerns the reporting of cash conveyed to or from South Africa, would be added. It did not elaborate on the reason for, or practical effect of, this proposed change.
Stakeholders raised concerns about the thresholds and safeguards governing the lifestyle audits, including their implications for privacy and the circumstances in which information obtained through an audit could be shared.
The Bill defines a lifestyle audit as an audit to determine whether a person’s living standards are consistent with the income from legitimate sources that can be attributed to that person. It would expressly empower the FIC to conduct lifestyle audits when performing its existing statutory functions and pursuing its objectives.
The Bill would also permit the FIC to conduct an audit of persons referred to in Schedule 3A to FICA, or another category prescribed by the Minister of Finance, at the request of an organ of state, public entity, or municipality. As introduced, the provision would apply if the FIC reasonably believed the requesting body was “affected by or has an interest in” the information obtained through the audit.
Pieter Smit, executive manager for legal and policy at the FIC, distinguished this proposed extension from the Centre’s existing work. He said the FIC already used lifestyle-audit techniques when following suspicious financial flows, identifying assets that might constitute proceeds of crime or be used for terrorist financing, and providing information to bodies involved in investigations, prosecutions, tax enforcement, or asset forfeiture.
The proposed extension would enable the FIC to conduct a lifestyle audit at another body’s request where there might be no suspicion of money laundering, terrorist financing, or criminal activity. Smit said the requesting body would instead need an independent legal basis for obtaining the information, such as a statutory entitlement or the consent of the person concerned.
The LSSA submitted that the formulation “has an interest in” was too broad. It recommended permitting disclosure where a body required the information for the lawful exercise of a statutory power or the performance of a statutory function. The LSSA also called for clearer thresholds and procedural safeguards governing when an audit could begin, who could be subjected to one, notice to affected people, their opportunity to respond, and the available appeal or review mechanisms.
Smit said Treasury would propose clarifying the provision so that a requesting body would have to be legally “entitled to” the information. The body would have to demonstrate the basis for that entitlement in its request by referring, for example, to a statutory provision or the consent of the person concerned. The FIC would then have to apply its mind to whether the legal entitlement had been established.
He said the statutory test would remain whether the FIC had a reasonable belief that the relevant requirements had been met. This would require the Centre to have information at its disposal that would lead a reasonable person to conclude that the requesting body had a legal basis for obtaining the information.
The FIC did not consider that the broader safeguards proposed by stakeholders had to be added to the Bill. Smit said existing provisions in FICA governed when the Centre could obtain and share information, and how it had to protect that information. He said constitutional safeguards applied to all the FIC’s work and did not need to be repeated specifically in the lifestyle-audit provisions.
Smit also said the Protection of Personal Information Act (POPIA) contains an exemption applicable to the FIC’s functions, subject to the Centre maintaining comparable safeguards and applying similar principles in its work. He acknowledged the need for proper documented processes governing how the FIC handled personal and sensitive information, but said this applied to all its operations and did not require further amendments to the Bill.
The question of whether a lifestyle audit would constitute administrative action under the Promotion of Administrative Justice Act (PAJA) also arose. Smit said the FIC’s analysis work did not constitute administrative action, and the use of a lifestyle audit as part of that analysis did not alter its character. He said PAJA could become relevant when another body used the information to make a decision, such as during an employment-vetting process.
FIC says existing records should fall under seven-year period
Clause 10 would extend from five to seven years the minimum period for which accountable institutions must retain records relating to business relationships, specified transactions, and transactions or activities that gave rise to a section 29 report.
The FIC did not support applying the seven-year period only to records created after commencement. Smit said institutions would not have to reconstruct records that had already been destroyed after the existing retention period expired, but records still in existence on commencement should become subject to the seven-year period. Excluding them could undermine investigations, forfeiture proceedings, subpoenas, or prosecutions that occurred later.
Information sharing would be voluntary
Clause 20 would allow an accountable institution to share information with another accountable institution if it reasonably believed this would facilitate compliance with specified FICA provisions. These include provisions relating to client information, reporting obligations, monitoring orders, and information supplied to the FIC.
Smit said the provision would be enabling rather than compulsory. It would permit accountable institutions to share information within the specified parameters but would not impose a duty on them to do so.
Clause 18 would provide the corresponding protection from civil and criminal liability for institutions and individuals acting in good faith when sharing information within those parameters. Smit said institutions seeking to rely on this protection would have to show that they had applied their minds to whether the information sharing fell within the relevant provisions.
The FIC did not reject the case for a broader framework permitting private-sector institutions to exchange information to combat financial crime and manage risk. However, Smit said the Centre favoured a cautious approach because the proposed provisions broke new ground and involved an infringement of privacy. Their objectives and parameters therefore had to be specific and clear enough to withstand a likely legal challenge.
Regulations would prescribe safeguards for protecting personal information shared under the provision. Smit said the Minister’s regulation-making power would be linked specifically to the new information-sharing provision and that the regulations would have to provide safeguards based on POPIA’s principles. He said work on the regulations had begun but would resume, with further public consultation, after the FICA amendments were finalised.
Companies Act and NPO amendments
Responding to comments on the proposed Companies Act amendments, Lucinda Steenkamp, senior legal adviser at the Companies and Intellectual Property Commission (CIPC), said regulations would provide greater certainty about which obliged entities must report material discrepancies in beneficial-ownership information and how those reports must be submitted.
Regulations could also prescribe the procedure after a discrepancy was reported, transitional arrangements, and whether and on what conditions payment of an administrative fine would be suspended while it was under review.
The CIPC did not support an additional requirement for a company to show cause before it could face deregistration. The provision applies where, after a demand from the Commission, a company fails to submit its securities register or register of beneficial interest for two successive years. Steenkamp said companies could submit their beneficial-ownership declarations at any time during a calendar year and therefore had sufficient time to comply.
The Department of Social Development (DSD) said stakeholders broadly supported stronger NPO oversight but were concerned about disproportionate burdens on smaller and resource-constrained organisations. It said regulations would set out the risk-based monitoring framework and a graduated enforcement model.
Mpho Mngxitama, acting deputy director-general for community development, said an NPO would not be sanctioned merely because it was considered high risk. Sanctions would follow repeated non-compliance and interventions intended to help the organisation remedy the failure.
NPO-sector representatives maintained that a proportionate, risk-based approach, separation between compliance and sanctioning functions, and suspension of sanctions pending appeal should be provided for in the Act rather than left to regulations.
Treasury said it would reconsider some of the issues raised during the meeting.
SCOF chairperson Joseph Maswanganyi asked Treasury and the DSD to brief the committee, before clause-by-clause consideration, on the NPO provisions they recommended amending and the areas on which the two departments had reached agreement.
Clause-by-clause consideration would probably take place after Parliament’s recess.
