“The code does not adequately distinguish between the different types of securities financing transactions and, in doing so, confuses in certain cases the fact that the legal relationship is different (a secured loan vs a sale),” said SASLA chair Juanita Taylor and general manager strategic projects at the Banking Association South Africa, Gary Haylett in a joint letter to the Financial Services Board (FSB).
“Also, in many instances the defined terms are not used where they could be. As a suggestion, where defined terms are used in the body of the code they should be indicated with initially capitals, for ease of reference.”
In the letter addressed to Michael Kabai, senior legal manager at the FSB, SASLA called for further discussion on how the aims proposed by the code might be better achieved.
“We highly recommend that further industry engagement is required as we are concerned on a number of the aspects that the code is trying to achieve."
"It also repeats what is contained in the global master securities lending agreement, legislation (Federal Insurance Contributions Act tax, money laundering, etc) and current market conduct regulations.”