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Financial sector conduct authority established

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In light of the recent launch of the Prudential Authority, Finance Minister, Nhlanhla Nene and the National Treasury senior officials announced that the Financial Services Board (FSB) will be transformed into a dedicated market conduct regulator – the Financial Sector Conduct Authority (FSCA). The Minister stated that the constant innovation in financial services reinforces the need for regulatory systems to be dynamic and smart.

This means new Twin Peaks model of financial sector regulation has to be adapted to help restore fiscal credibility. This, by ensuring a strong hold on consumer protection and market conduct in financial services, and building a stable financial system.

Our National Manager: Compliance, Joe Kotzé sheds more light on the new development in communication below:

On 1 April 2018, South Africa’s financial regulatory system fundamentally changed, as two new regulators came into operation – the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA). This implements the new Twin Peaks model of financial sector regulation in South Africa.

The Minister of Finance will initiate the legislated process to appoint a Commissioner and Deputy Commissioners for the FSCA, expected to take three months. The FSCA will supervise how financial institutions conduct their business and treat customers. It will be responsible for significantly improving customer protection in the financial sector, and driving better customer outcomes, ensuring that the sector serves South Africans best.

The FSCA will publish a regulatory strategy within six months of its establishment, setting out in further detail its intended regulatory focus areas and work plans over the next three years.

In order to ensure a well-managed and non-disruptive transition to the new model, certain provisions of the Financial Sector Regulation Act will be phased in over time. Once fully phased in, the Twin Peaks regulatory model will focus on a more harmonised system of licensing, supervision, enforcement, customer complaints (including Ombuds), appeals, and consumer advice and education across the financial sector.

Please take note of the important links on the new FSCA website below:

The well known FSB website is still running for the time being: www.fsb.co.za

Members must check their business documents and change references to FSB to FSCA.

More news on developments will follow soon.