Staff Writer | 15 March 2023
The Department of Trade, Industry and Competition has opened the Draft Companies Amendment Regulations for 2023 up for public comment.
Minister Ebrahim Patel gazetted the proposed changes this week, inviting relevant stakeholders to engage with the regulations that are set to become law.
Stakeholders and interested persons are invited to submit comments in writing on the proposed regulations within fourteen days of the publication (deadline set for 24 March).
Broadly, the proposed regulations aim to “improve the ease of doing business through well-established principles, achieve equity between directors and senior management and counter money laundering and counter-terrorism”.
In practice, the changes would see companies needing to take more steps to certify certain processes, add checks and balances for conducting business, and ensure that beneficial interests are disclosed.
The proposed regulations, specifically those dealing with money laundering and counter-terrorism, are a direct result of the General Laws Amendment Act, 2022, which was signed into law on 29 December 2022.
The General Laws Amendment Act was part of a slew of new legislation to bring South Africa’s financial regulatory environment in line with international standards. It was proposed by Finance Minister Enoch Godongwana ahead of South Africa’s greylisting by the Financial Action Task Force (FATF).
The new bill sought to bring South Africa in line with the recommendations made by the FATF and improve the country’s ability to tackle financial crime and corruption.
To achieve this, it has set out to amend several pieces of legislation related to specific sectors, including the Trust Property Control Act, Nonprofit Organisations Act, Financial Intelligence Centre Act, and, notably, the Companies Act.
Within the Companies Act, its regulations – some dating back to 2011 – are being amended to ensure further regulatory compliance and extra checks and balances for businesses in the country.
For example, through amendments to Regulation 2 of the Companies Regulations (2011), new definitions have been provided for further clarity regarding certain definitions, such as the Financial Intelligence Centre and a ‘certified copy’.
Regulations regarding forms and filing requirements with the Companies and Intellectual Property Commission (Regulation 5) are also expected to change, with the additional verification steps being brought on by the request of the commission at any time it deems fit.
Under the proposed regulations, whenever information or documentation is filed with a regulatory agency, the company is required to no longer just provide a certified copy of relevant documentation but also have written confirmation that it is truthful and complete, as well as additional supporting information.
When filing annual returns, or any other related filing, the new regulations provide that they be presented alongside a copy of the company’s securities register and disclosure of beneficial interests.
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