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IN THE MEDIA
MEMORANDUM ON THE OBJECTS OF THE SOUTH AFRICAN RESERVE BANK AMENDMENT BILL, 2018
1. INTRODUCTION
The South African Reserve Bank Act, 1989 (Act No. 90 of 1989) (‘‘Act’’), amongst other things, provides for the share capital of the South African Reserve Bank (‘‘Bank’’). The provision of share capital of the Bank, and the increase of the share capital by issuing shares, enable private individuals including foreign nationals to buy and own shares in the Bank. The Bank currently has some 650 shareholders other than government.
2. OBJECTS OF THE BILL
The Bill seeks to amend the Act to make the State the sole holder of the shares in the Bank and to give powers to the Minister to exercise the rights attached to the shares in the Bank of which the State is the owner. The Bill further seeks to provide for the appointment process of directors of the Board that instead of being elected at an ordinary general meeting of shareholders, will now be appointed by the Minister.
3. CONTENTS OF THE BILL
3.1 Clause 1 amends section 1 of the Act by deleting certain definitions and adding a definition for an appointed director.
3.2 Clause 2 amends section 4 of the Act. The proposed amendment seeks to empower the Minister to appoint the directors of the Board and to provide for how nominations of those directors should be done.
3.3 Clause 3 amends section 4A of the Act. In terms of the proposed amendment, the annual and financial statements should be submitted to the Minister and Parliament only and not to the shareholders as the Bill proposes the shareholder to be the State, represented by the Minister.
3.4 Clause 4 amends section 5 of the Act to align the Act with the proposal that the State be the sole holder of the shares in the Bank. The clause does this by providing a fixed term of appointment for the directors appointed by the Minister and by providing for re-appointment of directors.
3.5 Clauses 5 and 6 amend sections 6 and 9 of the Act, respectively. The proposed amendments seek to align the appointment process with the proposal that the State be the sole holder of the shares in the Bank.
3.6 Clause 7 amends section 10 of the Act. The amendment seeks to remove the power of the Bank to form certain shares.
3.7 Clause 8 amends section 13 of the Act by deleting a paragraph. The amendment is consequential to the proposal that the State be the sole holder of shares in the Bank.
3.8 Clause 9 amends section 21 of the Act. This amendment deals with the share capital of the Bank. The proposed amendment makes the State the sole holder of shares in the Bank and proposes that the rights attached to those shares be exercised by the Minister on behalf of the State.
3.9 Clauses 10 and 11 repeal sections 22 and 23 of the Act, respectively. The repeals are consequential to the proposal that the State be the sole holder of shares in the Bank.
3.10 Clause 12 amends section 24 of the Act by deleting a paragraph. The amendment is consequential to the proposal that the State be the sole holder of shares in the Bank.
3.11 Clause 13 amends section 30 of the Act. The proposed amendment gives the power to the Minister to appoint firms of public accountants to act as auditors of the Bank.
3.12 Clauses 14 and 15 amend sections 32 and 33 of the Act by deleting certain provisions, respectively. The amendments are consequential to the proposal that the State be the sole holder of shares in the Bank.
3.13 Clause 16 amends section 32 of the Act by giving the Minister the power to make regulations for the appointment of directors.
3.14 Clause 17 amends section 38 of the Act by deleting provisions. The amendment is consequential to the proposal that the State be the sole holder of shares in the Bank.
3.15 Clause 18 provides for the short title.
4. FINANCIAL IMPLICATIONS FOR THE STATE
None.
5. PARLIAMENTARY PROCEDURE
5.1 The Member proposes that the Bill be dealt with in accordance with the procedure established by section 75 of the Constitution since it contains no provisions to which the procedures set out in section 74 or 76 of the Constitution apply.
5.2 The Member is of the opinion that it is not necessary to refer this Bill to the National House of Traditional Leaders in terms of section 18(1)(a) of the Traditional Leadership and Governance Framework Act, 2003 (Act No. 41 of 2003), since it does not contain provisions pertaining to customary law or customs of traditional communities.