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CLA2602
COMMERCIAL LAW 2B
2024
A Definitive Set of Notes Covering the Entire Course
(All you need to study)
BONUS MATERIAL
1. Tutorial 1 (Full Solutions) 2023
2. October / November 2023: EXAM
2024
NOTES
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TABLE OF CONTENTS
Section A: Part A Page 3
Lesson 1 : Banks and Banking Law
Lesson 2 : Financial Industry Regulation
Lesson 3 : Indigenous Banking Law
Lesson 4 : Financial Inclusion
Section A: Part B Page 23
Lesson 1 : Regulation of Credit Industry in RSA
Lesson 2 : Consumer Protection Policies, Market Practices, Over Indebtedness
Lesson 3 : Pre-agreement Disclosures, Interest Charges, Fees
Lesson 4 : Alteration and Termination of Credit Agreements
Section B : Page 47
Lesson 1 : Credit Cards
Lesson 2 : Stop Orders and Debit Orders
Lesson 3 : Letters of Credit
Lesson 4 : EFT
Section C : Page 58
Lesson 1 : Creation of a Trust
Lesson 2 : Office of Trustee
Lesson 3 : Administration of a Trust
Lesson 4 : Trust Beneficiary, Revocation, Variation, Termination
Section D : Page 66
Lesson 1 : Voluntary Surrender, Compulsory Sequestration
Lesson 2 : Effect of Sequestration on Person or Property
Lesson 3 : Effect of Sequestration on Solvent Spouse
Lesson 4 : Impeachable Dispositions
Lesson 5 : Administration of Insolvent Estate
Lesson 6 : Composition and Rehabilitation
Section E : Page 75
Lesson 1 : The Master and Executor
Lesson 2 : Removal / Discharge of Executor and Administrator of Special Estates
Appendix
Tutorial 1 : 2023
Exam (October / November) : 2023
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Section A : Part A Banking Law and Regulations
L1 : Banks and Banking Law Chapter 24.1
L2 : Financial Industry Regulation Chapter 24.2
L3 : Indigenous Banking Law Chapter 24.3
L4 : Financial Inclusion Chapter 24.4
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Lesson 1 : Banks and Banking Law : Chapter 24.1
The Role of Banks in Commerce
Banks are Financial Institutions (BB)
and
Banks are Financial Intermediaries (borrow from savers and loan to others)
Role of Banks : Payment intermediary Brings borrowers and lenders
Loan intermediary together
Provider of payment settlement facilities
Banks have to manage : Credit risk Otherwise “credit crunch /
Liquidity risk squeeze - would
Interest rate risk have to stop lending
SA Banking Sector
In recent years the banking sector has seen : Banks Act 1990
New product offerings
Engaging previously unbanked market
SARB : Governed by SARB Act 1989; Central Bank of SA
Financial Sector Regulation Act (FSR Act) 2017
Introduced : Prudential Authority (on entity)
➢ Operates with admin of SARB
➢ Regulator of banks and financial institutions
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Different Types of Banks
What is a bank? BA doesn’t define this:
➢ BA defines the business of a bank (1) We do this to deduce
➢ and definition of a deposit (2) what a bank is
➢ as well as exclusions to (1) and (2)
Ways to Categorise Banks:
i) Banks regulated by BA and banks regulated by other Acts
eg. Commercial Banks (BA)
Mutual Banks (MBA)
ii) Banks that form part of NPS and those that don’t
NPS : a set of instruments, banking procedures and interbank funds transfers
iii) Retail Banking (individuals and small businesses); and
Individual Banking (assists individuals/companies in raising money by
underwriting, marketing and advertising, trading derivatives, fixed income
instruments, forex commodity and equity securities).
iv) According to tiers
Tiers:
1st Tier: Commercial and Retail Banks, Investment Banks, DBSA, LADB
➢ Commercial Banks: (ABSA, Std Bank, Nedbank, FNB etc.)
o Customers: Businesses, Organisations, Individuals
o Main Services i) current, deposits and savings accounts
ii) provide loans
iii) payment intermediary services (make & receive payments)
• Use money, debit cards, credit card, electronic wallets
• Fund transfers (computer, mobile, ATM, tablet)
• Negotiable instruments (cheque & letter of credit)
o How do they make ∏s : Take small deposits and make big loans
∏ comes from interest charged and banking fees
➢ Investment Bank: (RMB, INV, ABSA K, SCMB etc.)
o Raise K by underwriting, M&A, investment services
o Don’t take deposits
NB: Some banks can be in more than 1 category
➢ DBSA:
o Government owned (est. 1985)
o Focuses on big infrastructure projects within public/private sector
o Role is that of financier, advisor, partner, provides expertise
