The FSCA Conduct Standard for Banks and the Termination of the Bank-Client Relationship: Some Thoughts

Our courts have considered the termination of bank-client relationships on several occasions – most notably in Bredenkamp v Standard Bank 2010 (4) SA 468 (SCA) (Bredenkamp). Several cases following Bredenkamp reaffirmed the principles established in Bredenkamp. However, it would go a long way towards achieving consistency in the approach of all South African banks if a single instrument stipulated how banks may fairly terminate a bank-client relationship. This research investigates to what extent an instrument published by the Financial Sector Conduct Authority (FSCA) creates this standardisation in the termination process across the banking sector and whether the termination provisions in this instrument resemble what was established in Bredenkamp. The Financial Sector Regulation Act 9 of 2017 (FSR Act) explicitly empowers the FSCA to make conduct standards in order for the FSCA to achieve its obligations under the FSR Act. This article briefly discusses the provisions contained in Conduct Standard 3 of 2020 for Banks relating to the termination of a bank-client relationship. This research considers whether the provisions in the Conduct Standard resemble the duty, as established through case law, on banks when terminating their relationship with a client. Put simply, this study seeks to determine to what extent the termination provisions contained in the Conduct Standard correspond to or expand on the principles enunciated in Bredenkamp. It is clear in this research that the principles included in case law on the termination of the bank-client relationship have not merely been repeated but have been expanded upon in the Conduct Standard for Banks.