South Africa AML regulations underwent significant changes in 2025, especially across financial services, crypto asset supervision, beneficial ownership reporting, and market conduct oversight. After years of regulatory reform following the country's FATF grey listing in 2023, South Africa made notable progress in strengthening its anti-money laundering framework and improving financial sector compliance.
What Changed in 2025?
South Africa Was Removed from the FATF Grey List
One of the most important developments in 2025 was South Africa's removal from the FATF grey list on 24 October 2025, following the FATF Plenary held in Paris from 20–24 October. This followed extensive work by local regulators, including the Financial Sector Conduct Authority (FSCA), the Financial Intelligence Centre (FIC), and National Treasury.
Since 2023, South Africa has been working to address weaknesses identified by the Financial Action Task Force. These reforms included stronger requirements for Risk Management Compliance Programmes (RMCPs), improved beneficial ownership transparency, and closer monitoring of financial institutions.
For financial services providers, this meant more regulatory inspections and stronger enforcement of FICA compliance. The FSCA paid particular attention to whether firms could demonstrate that their RMCPs were not only documented, but also properly implemented.
Stronger Focus on Beneficial Ownership
Beneficial ownership reporting became a major compliance priority in 2025. Regulators placed greater pressure on accountable institutions to collect, verify, and submit accurate ownership information.
This trend affected companies, trusts, and other structures supervised by institutions such as the CIPC, the Master's Office, the FIC, and the FSCA. For financial businesses, transparency around ownership and control is now a core part of AML compliance in South Africa.
Crypto Asset Service Providers and the Travel Rule
Crypto Asset Service Providers (CASPs) remained under close regulatory attention. CASPs have been included as accountable institutions under the Financial Intelligence Centre Act since 19 December 2022, while those offering financial services also require FSCA licensing.
Recent authorizations show how this framework applies in practice. FSCA License: MH Markets Enters the South African Financial Market examines the approval of a Category I FSP permitted to provide advice and intermediary services related to crypto assets.
The FIC's Directive 9, commonly known as the Travel Rule, came into effect on 30 April 2025. This rule applies to institutions involved in the transfer or receipt of crypto assets on behalf of clients.
Under the Travel Rule, ordering and beneficiary CASPs must collect and retain specific transaction information and provide it to authorities when requested. The purpose is to reduce the risk of crypto assets being used for money laundering, terrorist financing, or proliferation financing.
Regulatory Developments Moving Through 2026
COFI Bill Formally Enters Parliament
The Conduct of Financial Institutions Bill (COFI) has moved from proposal to formal legislative process in 2026. National Treasury published the draft Bill for public comment on 14 January 2026, and Cabinet approved its submission to Parliament following meetings on 25 March and 1 April 2026. On 17 April 2026, the Minister of Finance formally introduced the Bill in the National Assembly.
COFI is designed to create a single, comprehensive framework for regulating the market conduct of financial institutions, replacing several sector-specific laws including the FAIS Act and the Long-term and Short-term Insurance Acts. The Bill is currently with the Office of the Chief State Law Adviser for certification before proceeding to the Finance Portfolio Committee, where further public consultation is expected.
Alongside COFI, Cabinet also cleared the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2026 for submission. This bill amends the FIC Act, the Nonprofit Organisations Act, the Trust Property Control Act, and the Companies Act, and is aimed specifically at closing remaining AML/CFT gaps ahead of South Africa's next FATF Mutual Evaluation, scheduled to run from mid-2026 to October 2027.
FSCA Sharpens Focus on Artificial Intelligence
The FSCA has moved from informal monitoring to active regulatory groundwork on AI. In November 2025, the FSCA and the Prudential Authority jointly published South Africa's first comprehensive report on AI use in the financial sector, drawing on more than 2,100 survey responses across banking, insurance, investment, payments, and lending.
South Africa still does not have AI-specific financial-sector regulation. However, artificial intelligence is now formally listed as a strategic focus area in the FSCA's Three-Year Regulation Plan (published 3 July 2026, covering April 2026 to March 2029), alongside open finance, data risk, and sustainable finance. Firms should expect continued guidance rather than binding AI-specific rules in the near term.
Twin Peaks Transition Now Pushed to 2028
South Africa's Twin Peaks model continues to evolve, but the timeline for shifting prudential supervision of retirement funds, collective investment schemes, and friendly societies from the FSCA to the Prudential Authority has been pushed back, not brought forward. The Minister of Finance extended the transition deadline to 31 March 2028, specifically to allow the FSCA and PA more time to build fit-for-purpose regulatory and supervisory frameworks for these sectors. Firms operating in these areas should plan around 2028, not 2026.
AML and CTF Compliance Will Remain a Priority
South Africa's AML/CFT framework is under continued pressure to tighten further as the country prepares for its next FATF Mutual Evaluation, running from mid-2026 to October 2027. Regulators are expected to continue strengthening due diligence, reporting, governance, and enforcement standards in the run-up to that review.
The General Laws (AML/CTF) Amendment Bill, alongside continued FIC guidance, is the primary vehicle for addressing outstanding gaps in beneficial ownership disclosure and reporting obligations before the evaluation begins.
Conclusion
South Africa's exit from the FATF grey list is a milestone, not a finish line. With the next FATF Mutual Evaluation running from mid-2026 to October 2027, and the COFI Bill now formally before Parliament, regulators are moving from checking paperwork to testing whether compliance actually works in practice. For financial services providers, CASPs, and other accountable institutions, that means demonstrating implementation — not just documentation.
Businesses operating in South Africa should review their AML frameworks, beneficial ownership records, RMCPs, reporting processes, and technology governance to stay aligned with the changing regulatory landscape.
As South Africa's regulatory framework continues to evolve through 2026 and toward the 2027 FATF evaluation, early preparation will be essential for firms that want to remain compliant and avoid regulatory risk. For businesses weighing South Africa against other jurisdictions, our comparison of forex broker licensing options across the region may help.
