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Decoding COFI

Feeling perplexed about the upcoming Conduct of Financial Institutions (COFI) Bill? Not sure how this pivotal legislation will impact your business? We’ve got you covered! Our new Decoding COFI article series is designed to keep our newsletter readers well-informed and ready for the changes this legislation will bring to the financial sector.

Created to keep you informed and knowledgeable on how to navigate the COFl Bill with confidence; our Decoding COFI articles will cover comments and interviews from financial, compliance and regulatory industry specialists with the aim to equip you with the understanding needed to stay updated on this regulatory shift.

Articles

 

Guiding you through the regulatory shift

The scope of COFI is broad, touching various facets of the financial industry. Yet, at its core, its primary goal is to enhance customer outcomes by formalising the Treating Customers Fairly (TCF) principles within the regulatory framework. In so doing, COFI hopes to guide advisor behaviour and outcomes for clients, fostering a financial environment centred on prioritising customer wellbeing and satisfaction.

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Giving Teeth to TCF

Although still in its second draft, the COFI Bill is unlikely to change its approach to TCF, and this allows financial service providers (FSPs) to prepare proactively for COFI implementation.

Presently, various regulations cover TCF principles to different degrees, with some, like the Policyholder Protection Rules (PPRs) for insurers, incorporating more comprehensive requirements than others. This variance results in gaps and differing interpretations of these principles across various role-players.

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Navigating the new licensing landscape

A pivotal change anticipated with COFI is the comprehensive revamp of the licensing requirements for financial institutions. This article delves into these changes and offers valuable insights for financial service providers (FSPs) to prepare for this transformation.

Amid the many facets of COFI that will reshape the financial industry, a big focus is the new licensing framework, which is a substantial departure from the existing system.

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Helping our members prepare

Ensuring a smooth transition to the Conduct of Financial Institutions (COFI) Bill hinges on preparation. Here is how we’ve been helping our members navigate the forthcoming regulatory changes.

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Omni-CBR 101 - What FSPs should know

Omni-CBR (Conduct of Business Return), the new off-site monitoring tool being introduced by the Financial Sector Conduct Authority (FSCA), will transform the way Financial Service Providers (FSPs) report and comply with regulatory standards.

This article delves into the essentials of Omni-CBR, its implications for FSPs and how advancing Treating Customers Fairly (TCF) in the financial services industry is at the heart of its purpose.

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Key insights from our recent audits

In anticipation of the Conduct of Financial Institutions (COFI) Bill and Conduct of Business Return (Omni-CBR) reporting, we have intensified our focus on Treating Customers Fairly (TCF) outcomes in our financial service provider (FSP) audits since last year.

While our clients are making significant progress in preparing for the new legislation and outcomes-based reporting, our audits have revealed common challenges and areas of uncertainty that FSPs continue to face.

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What FSPs can learn from the insurance industry

While the Conduct of Financial Institutions (COFI) Bill and Omni-CBR (Conduct of Business Return) will revolutionise the financial services sector once it becomes effective, it’s not the first time an industry has had to adapt to significant regulatory changes.

In the past several years, the insurance sector underwent similar changes with the enactment of the Insurance Act 18 of 2017 and the Policyholder Protection Rules (PPR) and the implementation of a Conduct of Business Return (CBR) for insurance product providers. As is expected with COFI and Omni-CBR, these regulatory changes in the insurance industry put Treating Customers Fairly (TCF) at the forefront, requiring insurance providers to record and report data in CBR format to demonstrate customer outcomes.

By analysing the recently released Insurance Ombudsman 2023 Annual Report, focusing on the Ombudsman for Short-term Insurance’s (OSTI) findings, we can extract valuable lessons for FSPs on TCF and how the regulator will use data to identify trends based on outcomes in the industry.

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Outcomes-based regulation - How ready is your staff?

You’ve reviewed your systems and processes to ensure your FSP complies with the proposed outcomes-based regulations and Omni-CBR (Conduct of Business Return) data requirements – but is your staff prepared for the impact of these upcoming changes?

This article explores the importance of staff training and why it’s crucial for employees to understand how their roles contribute to the FSP’s success in a conduct-focused regulatory environment. Additionally, we provide tips on equipping your employees with the skills and knowledge they need to confidently navigate the upcoming regulatory changes.

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MASTHEAD IS

A national supplier of risk management services to independent financial advisors and other licensed financial service providers (FSPs). Established in 2004, we help our clients overcome their risk management challenges so they can grow and thrive in an increasingly regulated industry. Providing professional guidance and practical support, our team of specialists is passionately committed to delivering tangible solutions.

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