a written directive requiring the person to take action specified in the directive if—
| (i) | the financial institution is conducting its business in an improper or financially unsound way and, as a result, there is a risk that the financial institution may not be able to comply with its obligations; or |
| (ii) | the financial institution or key person of a financial institution— |
| (dd) | is causing or contributing to instability in the financial system, or is likely to do so. |
| (2) | The Prudential Authority may issue to a holding company of a financial conglomerate a written directive requiring the holding company to take action specified in the directive, if the holding company or another company in the financial conglomerate concerned— |
| (a) | is conducting its business in an improper or financially unsound way and, as a result, there is a risk that an eligible financial institution in the conglomerate will not be able to comply with its obligations under a financial sector law or in relation to a financial product or financial service that it provides or offers to provide; |
| (b) | has not complied with an enforceable undertaking accepted by the Prudential Authority; |
| (c) | has contravened or is likely to contravene a financial sector law; |
| (d) | is involved or is likely to be involved in financial crime; or |
| (e) | is causing or contributing to instability in the financial system, or is likely to do so. |
| (3) | A directive in terms of subsection (1) or (2) must be aimed at achieving the objective of the Prudential Authority set out in section 33 and— |
| (a) | reducing any risks referred to in subsection (1)(b)(i) or (2)(a); |
| (b) | ensuring that the financial institution or the directed person complies with the enforceable undertaking that was accepted by the Prudential Authority; |
| (c) | stopping the financial institution or company from contravening applicable financial sector laws, or reducing the risk of such contraventions; |
| (d) | stopping the financial institution or company from being involved in financial crime, and reducing the risk that it may be so involved; |
| (f) | remedying the effects of a contravention of a financial sector law or the person’s involvement in financial crime. |
| (4) | The Prudential Authority may not issue a directive to a financial institution on the basis set out in subsection (1)(b)(ii)(dd) unless it has been directed in terms of section 18 to do so or with the concurrence of the Reserve Bank. |
| (5) | Action that may be specified in a directive in terms of subsection (1) includes the following: |
| (a) | The financial institution ceasing offering or providing a specific financial product; |
| (b) | the financial institution modifying a specific financial product or the terms on which it is provided; |
| (c) | removing a person from a specified position or function in or in relation to the financial institution; |
| (d) | the financial institution not paying a dividend or a specified bonus or performance payment; |
| (e) | the financial institution not entering into a specific transaction or undertaking a specific obligation, contingent or otherwise; |
| (f) | the financial institution remedying the effects of a contravention of a financial sector law. |
| (6) | In addition to its powers to issue regulator’s directives, if a person is engaging, or is proposing to engage, in conduct that contravenes a financial sector law for which the Prudential Authority is the responsible authority, the Prudential Authority may issue a written directive to the person requiring the person to cease engaging, or not to engage, in the conduct. |
