The Financial Sector Conduct Authority (FSCA) has published its Regulatory Strategy for 2025 – 2028. The updates act as a practical guide to what’s coming, what’s changing, and what’s expected – containing key updates, highlighting completed and overdue projects, and how the FSCA’s evolving regulatory approach will impact industry participants in the next three years.
The strategy is aligned with the Government of National Unity’s medium-term priorities, which focuses on implementing the COFI Bill and enhancing regulatory frameworks, with the aim to achieve meaningful outcomes for financial customers and maintain trust in the financial sector.
Completed projects – building on momentum and strategic achievements
The FSCA has made significant strides from 2021 to 2025, achieving over 80% of its strategic targets as set out in the Annual Rolling Regulation Plans.
Key accomplishments include the implementation of the COFI Bill, enhanced supervisory approaches, and increased enforcement actions. Thematic reviews were conducted to strengthen oversight of financial institutions and assess key market conduct issues. These included reviews of bank account terminations and the fairness of account closure practices. Thematic reviews also examined insurance broker fees to ensure that remuneration structures were fair and did not place unnecessary financial strain on consumers. In respect of the consumer, credit insurance was reviewed to determine its transparency, fairness and effectiveness in addressing consumer needs.
- Crypto Asset Licensing: Following the 2022 declaration of crypto assets as financial products under the FAIS Act, the FSCA has licensed over 250 Crypto Asset Service Providers (CASPs). These entities are now subject to Fit and Proper requirements, risk management protocols, and disclosure obligations.
- Two-Pot Retirement System: Introduced in September 2024, this system marked a major shift in retirement fund regulation. The FSCA facilitated the transition by issuing regulatory guidance, approving rule amendments, and conducting industry workshops and consumer awareness campaigns.
- Digital Transformation: The FSCA has implemented a new Enterprise Resource Planning (ERP) system, a Customer Relationship Management (CRM) platform, and most notably, the Integrated Regulatory Solution (IRS) – a suptech platform that will streamline licensing, supervision, and data analysis. The system will assist the FSCA by identifying high-risk entities and priority areas at the entity and sector levels, enabling it to hold non-compliant institutions accountable. The IRS system is also positioned to automate risk assessments using a built-in risk model, to consolidate data across sectors for a holistic view of each regulated entity and provide dashboards for real-time insights into risk indicators and trends.
- Enforcement and Transparency: The FSCA has strengthened its enforcement approach, resulting in increased regulatory actions and transparency in compliance expectations. This includes the publication of Regulatory Actions Reports and engagement with stakeholders through roadshows. The FSCA imposed R943 million in administrative penalties in 2023/24, compared to R153.8 million the previous year. It also issued 104 public warnings and suspended over 1,000 FSP licences, reflecting a shift toward remedial enforcement. Licence withdrawals declined significantly, from 420 in 2022/23 period to 75 in 2023/24, debarments decreased slightly and a number of investigation cases were aligned with numbers in the previous year, at 483.
What’s new: key developments for FSPs – COFI Bill implementation
The FSCA is preparing to expand its regulatory jurisdiction and implement new licensing provisions under the COFI Bill. This includes a roadmap for integrating additional financial services into its oversight. There are plans to regulate payment services, debt collection, and credit-related services. The framework also includes the transition of prudential regulation for friendly societies, retirement funds and collective investment schemes to the Prudential Authority (PA) by 31 March 2026, and for Medical Schemes to transition by 31 March 2027.
The COFI Bill is expected to be enacted during this strategic cycle. The FSCA is preparing for its implementation by:
- Developing a harmonised licensing framework.
- Establishing industry workgroups.
- Transitioning existing conduct-focused laws into a single, outcomes-based framework.
- Preparing to regulate new activities.
This transition will affect all FSPs and other financial institutions, in particular those with multiple licences or those operating in sectors not previously under FSCA conduct supervision.
Open finance and AI governance
To ensure that financial inclusion efforts are supported by innovative and technology-driven solutions, the FSCA is advancing its work on open finance, following the 2024 publication of its policy recommendations. It is also exploring governance principles for artificial intelligence (AI) and machine learning (ML), particularly in areas such as:
- Bias in automated decision-making.
- Explainability and transparency of algorithms.
- Ethical use of customer data.
Financial institutions and other entities that will fall into the scope of COFI, and who are using digital platforms or AI tools should expect increased regulatory scrutiny and guidance in these areas.
Overdue or ongoing – what’s still in progress
Unclaimed assets framework
Following a 2022 discussion paper and stakeholder feedback, the FSCA is developing a regulatory framework for unclaimed financial assets. This will include:
- Common definitions across asset classes.
- A central database.
- Potential collaboration with National Treasury on a central fund.
- Institutions holding dormant accounts or unclaimed benefits preparing for reporting and tracing obligations.
Transformation monitoring
While the FSCA has published a transformation strategy and signed memorandums of understanding (MoUs) with key stakeholders, its regulatory role in this space will only become active once the COFI Bill is enacted. In the interim, the FSCA is:
- Engaging with institutions to assess transformation efforts.
- Upskilling supervisory teams on the Financial Sector Code.