Pretoria - Future bank mergers

would be decided in terms of the

Competition Act if an amendment

bill put before Parliament

was approved at the next

parliamentary session, Menzi

Simelane, the Competition

Commissioner, said yesterday.

The section of the act that

precluded the Competition

Commission from having any

jurisdiction on the proposed

merger between Nedcor and Standard

Bank Investment Corporation

(Stanbic) would be deleted if

the bill was passed.

Simelane hoped the Second

Amendment Bill would be passed

by Parliament in September but

he pointed out that it would first

have to be discussed in Nedlac and

by the portfolio committee.

``If this amendment is passed,

then any future bank merger

would be decided in terms of the

Competition Act, which would

have concurrent jurisdiction with

other bodies such as the Registrar

of Banks,`` he said.

Bank mergers are deemed to

fall outside the jurisdiction of the

Competition Act No 89 of 1998

because of section 3(1)(d).

According to this section, the

provisions of the Competition Act

do not apply to ``acts subject to or

authorised by public regulation``.

Public regulation is defined as

``any national, provincial, or local

government legislation or subordinate

legislation, or any licence,

tariff, directive or similar

authorisation issued by a regulatory

authority or pursuant to any

statutory authority`` where

regulatory authority is ``any entity

established in terms of national,

provincial or local government

legislation or subordinate legislation

responsible for regulating

an industry or sector of any

industry``.

Simelane said the broad

interpretation of Section 3(1)(d)

had created a ``nonsensical

situation that was aggravated by

the Supreme Court`s judgment in

March``.

In that judgment, the court

ruled that the Competition

Authority did not have jurisdiction

over bank mergers save to

the extent permitted by section

37(2) of the Banks Act 1990.

Simelane said the controversial

section was not in the initial

draft of the Competition Bill but

was inserted by the portfolio committee

as a result of representations

made by some parastatals.

Although deleting the section

would give the Competition Authority

jurisdiction, David Lewis,

the chairman of the Competition

Tribunal, has indicated there

could be a case for allowing the

Registrar of Banks to have primary

jurisdiction in bank mergers.