OWN CORRESPONDENT and REUTERS, Johannesburg | Friday
A HOTLY-debated bill to give South Africa’s competition authorities jurisdiction over banking mergers has been given the go-ahead by a parliament committee, paving the way for its final approval.
Parliament’s trade and industry portfolio committee approved the bill after public hearings earlier this week.
If parliament gives it the final go-ahead, as industry experts predict, the Competition Commission and its Tribunal and Appeal Court will have concurrent jurisdiction over mergers with sector regulators.
These include South Africa’s banking regulator, the Registrar of Banks at the central bank, and the Independent Communications Authority of South Africa, which regulates the telecoms sector. It means that if either they or the Competition Commission reject a takeover or merger bid, it will fail.
The Financial Services Board, which regulates insurance companies and pension funds, and the Registrar of Banks have both criticised the amendment, saying that it would slow the merger process down.
They also maintain that before it is approved, the Banks and Insurance Act, which at present says the Competition Commission must be consulted, has to be amended.
“If the bill is approved as proposed the Banks Act will need to be changed,” Registrar of Banks Christo Wiese said.
“Normally bank mergers have to happen quickly and their process (at the Competition Commission) takes a lot of time…it can take up to four months,” he said.
A hostile bid late last year by commercial bank Nedcor, South Africa’s most highly-rated bank, for its bigger rival Standard Bank prompted the proposed amendment.
Finance Minister Trevor Manuel, who has the final say in any acquisition of more than 49% in a bank, blocked the bid in late June after consulting with both the Registrar of Banks and the Competition Commission. He cited both competition concerns and fears of systemic risk in the banking system as reasons for his decision.