By 
By Bright Tibane, Partner and Tshepo Twala, Senior Associate, Bowmans
On 17 April 2026, the National Treasury published the draft Capital Flow Management Regulations of 2026 (draft CFM Regulations) for public comment.
A New Era: CFM Regulations to Replace 1961 Exchange Control Rules
The draft CFM Regulations are intended to repeal and replace the current Exchange Control Regulations of 1961.
The draft CFM Regulations seek to, amongst others:
- align the South African exchange control framework with the Organization for Economic Co-operation and Development and Financial Action Task Force’s recommendations aimed at combating money laundering, terrorist financing and the proliferation of illicit financial flows;
- bring crypto-assets within the ambit of the exchange control framework in order to address risks and ensure oversight of emerging financial instruments;
- clarify exemptions, permissions, and conditions in respect of exchange control restrictions; and
- impose administrative sanctions where there is non-compliance with the South African exchange control.
The amendments contemplated in the draft CFM Regulations address gaps in the current South African exchange control regulations, including in relation to cross-border crypto asset transactions.
They will complement the existing regulation by the Financial Sector Conduct Authority (FSCA) and Financial Intelligence Centre (FIC).
CFM Regulations Introduce Major Shifts to South Africa’s Exchange Control Framework
In this regard, the draft CFM Regulations provide for various changes to the current South African exchange control regulations. Some of the notable changes proposed under the draft CFM Regulations are as follows:
- The definition of ‘capital ’ has been expanded to include anything with a monetary value, or which can be converted to money or disposed of for monetary consideration, including crypto assets, excluding immovable property.
- The definition of ‘export of goods or capital’ has been broadened to include, without derogating from the generality of that term, the cession or creation of a hypothec or other form of security over, or the assignment or transfer of any capital or any right to capital to or in favour of a person who is not resident in South Africa.
- The requirement to declare foreign assets is expanded to include the declaration of crypto assets after obtaining control, or possession or becoming entitled to sell, procure the sale of, or transfer, any foreign asset or crypto asset. This must be made within the prescribed period to the National Treasury or to an authorised person (understandably, the South African Reserve Bank) in writing and in the form and manner prescribed.
Other Key Changes to South Africa’s Exchange Control Rules
- The National Treasury or an authorised person may impose administrative sanctions on authorised dealers or authorised crypto asset service providers for failure to comply with any of the provisions of the draft CFM Regulations, or any condition imposed thereunder. The administrative sanctions imposed in this regard may include any or a combination of a financial sanction, public reprimand or censure, suspension or revocation of the appointment as an authorised dealer, disqualification of directors, senior management or key personnel from serving in their roles, restrictions on or curtailment of transactions that may be entered into by the authorised dealer and an order to take specified remedial action.
- Penalties that can be imposed on persons found guilty of offence under the draft CFM Regulations have increased to a fine not exceeding ZAR 1 million, imprisonment for a period not exceeding five years or both a fine and imprisonment. A person who is convicted of an offence in terms of the draft CFM Regulations, in relation to any money, crypto asset or property may be liable to a fine not exceeding ZAR 1million, or a sum equal to the value of the money, crypto asset or property, whichever is the greater.
- The National Treasury or an authorised person may exempt all persons or a specified class of persons from compliance with any of these regulations under the draft CFM Regulations, either in respect of all transactions contemplated in a regulation or in respect of specified types or categories of transaction.
South Africa Signals a ‘Positive Bias’ Shift in Managing Cross-Border Capital
According to the Minister of Finance, the amendments contemplated in the draft CFM Regulations signal South Africa’s readiness to modernise and adopt a ‘positive bias’ approach to managing cross-border capital flows through fewer transaction pre-approvals, a focus on reporting, the surveillance of high-impact and high-risk cross-border transactions, and the combating of illicit financial flows.
Once finalised, the draft CFM Regulations are expected to align South Africa with international best practices, while also managing various risks using a risk-based approach and existing macroprudential tools.
Written comments on the draft CFM Regulations must be sent to National Treasury at [email protected] by close of business on Monday, 18 May 2026.
For ease of reference, a copy of the draft CFM Regulations can be accessed here.
