Browsing by Author "Louw, Michelle"

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    Rethinking the meaning of a politically exposed person to promote substantive compliance of the financial action task force standards
    (2025) Mashale, Nthabiseng Evenecias; Mesthrie, Sapna; Louw, Michelle
    This dissertation explores whether there is a need for a broader definition of Politically Exposed Persons (PEPs). It aims to enhance the understanding of PEPs to improve countries' abilities to substantially comply with the Financial Action Task Force (FATF) standards. The dissertation observes that the current definition of PEPs is deemed too narrow, thereby hindering substantial compliance with the FATF standards. It highlights the need to broaden the scope of PEPs beyond natural persons to encompass legal entities, similar to the EU model implemented in the UK. The paper presents a brief comparative analysis of the Anti-Money Laundering, Counter-Terrorism Financing, and financing of proliferation of weapons of mass destruction (AML/CTF) regimes of the FATF, South Africa, the EU, and the UK in relation to PEPs. It considers Recommendation 12 of the FATF, Mutual Evaluation Reports, domestic legislation of the respective jurisdictions, financial intelligence units' guidelines and international standard-setting bodies like Wolfsberg Group and Basel Committee on Banking Supervision and international instruments. The comparison reveals that the fundamental element of a PEP being a natural person is too restrictive, and thus ineffective in combatting ML/TF and hinders national efforts by countries like South Africa to promote substantive compliance with the FATF standards. Therefore, this paper suggests ways to respond to this and other challenges. It suggests that a broader definition of PEPs be adopted by the FATF on an international level and by South Africa, incorporating legal entities in the definition of PEPs to better comply with FATF AML/CTF standards.
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    The regulation of crypto exchanges providing stablecoin services in South Africa: Should they be regulated as banks?
    (2025) Dyamond, Megan; Louw, Michelle
    Crypto assets have been declared to be financial products in South Africa and crypto asset service providers (‘CASPs') are required to seek a licence under the Financial Advisory and Intermediary Services Act 37 of 2002 (‘FAIS Act') to provide advice or intermediary services in respect of stablecoins. Yet, certain events in the crypto asset industry in 2022 (namely, a global industry decline, bad practices, bankruptcies and fraud) raised the question of whether CASPs providing exchange services specifically in relation to stablecoins (‘stablecoin CASPs') should be regulated as banks, and subjected to more rigorous regulatory requirements than those applicable under the FAIS Act. This forms the basis of the research question in this dissertation. The research is qualitative in nature and considers certain aspects of existing legislation and scholarly opinions in investigating the research question. The dissertation uses the European Union's Markets in Crypto Assets Regulation of 2023 (‘MICAR') as a benchmark against which to consider the South African legal position. After examining relevant legislation and considering MICAR's position on crypto assets, the dissertation argues that it is not appropriate to regulate stablecoin CASPs as banks in South Africa. However, the dissertation also finds that, in certain instances, some stablecoin CASPs may have to register as banks, based on the activities that they conduct. The dissertation also identifies certain significant gaps in the existing framework applicable to stablecoin CASPs as financial services providers. It is recommended that, in order to protect vulnerable consumers, a unified regulatory framework should be developed to apply particular standards to stablecoin CASPs; such standards are specifically tailored to stablecoins, and are not generic to traditional financial products. Looking beyond the research question posed, it is recommended that this framework should cover issuers of stablecoins in order to address the macroeconomic risks that they pose. The dissertation concludes that further research is needed to address other aspects of stablecoin CASP regulation that fall beyond the scope of this dissertation.