New finance laws for South Africa – here are the changes

Finance Minister Enoch Godongwana has announced the commencement of the Financial Matters Amendment Act (FMAB).

In a government gazette, the Minister said that the new laws were enacted on 14 July 2023.

Broadly, the bill amends several other pieces of legislation, including:

• Associated Institutions Pension Fund Act
• Temporary Employees Pension Fund Act
• Military Pensions Act
• Government Employees Pension Law
• Land and Agricultural Development Bank Act (Land Bank Act)
• Auditing Profession Act
• Auditing Profession Amendment Act

FMAB was introduced to the National Assembly in early September 2022 and has seen several alterations before being signed into law.

According to the Parliamentary Monitoring Group, the bill was passed by the National Council of Provinces (NCOP) on 20 June, with President Cyril Ramaphosa signing the bill into law on 5 July 2023.

The new law does not include previously planned amendments to the Financial and Fiscal Commission Act. The changes sought to omit the role of the CEO of the Financial and Fiscal Commission as its secretary.

In April, Godongwana asked the Chairperson of the Finance Committee for the proposed amendment to be rejected as it relates to regulation and not legislation, meaning that it should be included in a Bill Act in Section 76 and not a Section 75 Bill.

Despite the Standing Committee on Finance saying that the changes to this Financial and Fiscal Commission Act were relevant, they are not found in the current finalised bill.

Below are some of the key changes to the bill:

Pensions

Regarding the Military Pensions Act, pensions have been extended to life partners of members, replacing a previously discriminatory provision.

For the Associated Institutions Fund Act and the Temporary Employees Pension Fund Act, FMAB amends certain definitions to align the two acts with their administration by the Finance Minister and updates references to other ministers.

FMAB also amalgamates the Associated Institutions Pension Fund into the Government Employees Pension Fund. The purpose of the amendment to the Government Employees Pension Law is to facilitate administration and make a “clean-break” principle apply to members of the Associated Institutions Pension Fund.

Auditing

The new laws also introduce far more severe punishments for auditors guilty of improper conduct.

The Auditing Profession Act has been changed to allow the enforcement committee to refer someone who has admitted guilt to a disciplinary committee for sanctioning in cases of serious improper conduct.

During a parliamentary committee meeting, the Standing Committee on Finance said that the sanctions levied against those who broke the law were far too mild, hence the revision.

Land Bank

Moreover, amendments to the Land and Agricultural Development Bank Act include substituting the definition of Minister and replacing the provision for judicial management with business rescue in terms of the companies act.

During its meeting, the committee said that the amendments to the Land Bank are technical by nature and aim to align the provision with the administration of the Minister of Finance.

Although the amendments to the Land Bank Act are technical, the committee said that they might help the Bank with its liability solution and allow it to better fulfil its mandate of supporting the agricultural sector.

The Financial Matters Amendment Act is below:

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