The Prudential Authority (PA) will issue prudential standards for the supervision of financial conglomerates and will begin regulating the fitness and propriety of significant owners.
In its first Annual Report (2018/2019), the authority, which is located within the Reserve Bank, said several elements of the financial sector reform process must be implemented.
"Most notably, in the 2019/20 financial year, the PA will issue prudential standards for the supervision of financial conglomerates and will begin regulating the fitness and propriety of significant owners. The PA will also continue the work begun in 2018/19 to raise governance standards in the sector," it said in its report.
The central bank's Deputy Governor, Kuben Naidoo and head of departments within the PA on Thursday presented an overview on the report.
The PA, which plays a role in the regulation of the financial sector, came into effect on 1 April last year.
The report noted that in many respects, the integrated supervision of the financial sector is still a work in progress, with much more work ahead.
"The PA will also continue the work begun in 2018/19 to raise governance standards in the sector," said the report.
Among the achievements of the PA are the implementation of the new Insurance Act 18 of 2017 and related Prudential Standards, also known as the Solvency Assessment and Management (SAM) Project, for insurance companies.
Another accomplishment is the publication of the Regulatory Strategy 2018-2021, together with the PA's integrated risk-based Supervisory Framework, which serve as the PA's general guidance to achieve its objectives and perform its regulatory and supervisory functions.
Several new licences for banks, mutual banks, cooperative financial institutions (CFIs) and insurance companies were issued in the past year, with at least three banks launching their businesses to the public in the first half of 2019.
The report also highlighted that a number of incumbent and newly licensed institutions using new technologies to enhance their customer offerings showed that the financial sector is both healthy and dynamic.
With regards to the VBS Mutual Bank saga, which resulted in the bank being placed under curatorship, the Reserve Bank was able to refund about 97% of retail depositors.
"Following the release of restated financial statements for the 2017 financial year in October 2018, the PA approached the courts to apply for the liquidation of this bank. The liquidator of VBS continues to work closely with law enforcement authorities to aid in the recovery of money and the prosecution of those responsible for the malfeasance," read the PA report.