Financial Sector Regulation (FSR)
On 27 October 2015 the Minister of Finance presented the Financial Sector Regulation (FSR) Bill to Parliament after taking into consideration, comments received on the Bill.
This comes after government’s decision in 2011 to shift to a Twin Peaks Model of financial sector regulation. The objective of the Bill is to split the regulating authorities of the financial services sector into two centres. The first centre will be a Prudential Authority, which will falls within the Reserve Bank and will supervise the safety and soundness of financial institutions. The second centre will be the Financial Sector Conduct Authority (FSCA), which will replace the FSB, and will supervise financial institutions on how they conduct business and treat their customers.
The aim of the new regulatory system will be to focus on a more consistent approach to different areas of financial institutions and across the financial sector.
The Twin Peaks system of regulation will, when fully phased in, focus on a more harmonised system of licensing, supervision, enforcement, customer complaints, Ombud cases, appeals and consumer advice and education across the financial sector. This will enable co-ordination across all regulators in the financial system.
These regulators include the Prudential Authority (PA) and Financial Sector Conduct Authority (FSCA), the National Credit Regulator (NCR), the Financial Intelligence Centre (FIC), the Council for Medical Schemes and the South African Reserve Bank (SARB).
The Bill will be considered in Parliament by the Standing Committee on Finance, which is expected to invite public comments and submissions on the Bill. It is expected that the Bill will be enacted in 2016 in order for the implementation phase to commence.
Click here to read the Bill and the Media Statement from National Treasury.