Financial Sector Regulation Bill [B34-2015]Call for comments opened 06 November 2015 Share this page:
Submissions are now closed (since 16 November 2015)
The Standing Committee on Finance invites you to submit written submissions on the Financial Sector Regulation Bill [B34-2015].
The Financial Sector Regulation Bill aims to:
• establish a system of financial regulation by establishing the Prudential Authority and the Financial Sector Conduct Authority, and conferring powers on these entities;
• preserve and enhance financial stability in the Republic by conferring powers on the Reserve Bank;
• establish the Financial Stability Oversight Committee;
• regulate and supervise financial product providers and financial services providers;
• improve market conduct in order to protect financial customers;
• provide for co-ordination, co-operation, collaboration and consultation among the Reserve Bank, the Prudential Authority, the Financial Sector Conduct Authority, the National Credit Regulator and other organs of state in relation to financial stability and the functions of these entities;
• establish the Financial System Council of Regulators and the Financial Sector Inter-Ministerial Council;
• provide for making regulatory instruments, including prudential standards, conduct standards and joint standards;
• make provision for the licensing of financial institutions;
• make comprehensive provision for powers to gather information and to conduct supervisory on-site inspections and investigations;
• make provision in relation to significant owners of financial institutions and the supervision of financial conglomerates in relation to eligible financial institutions that are part of financial conglomerates;
• provide for powers to enforce financial sector laws, including by the imposition of administrative penalties;
• establish the Ombud Regulatory Council and confer powers on it in relation to ombud schemes;
• require financial product and financial service providers to be members of, or be covered by, appropriate ombud schemes;
• establish the Financial Services Tribunal as an independent tribunal and to confer on it powers to review decisions by financial sector regulators, the Ombud Regulatory Council and certain market infrastructures;
• establish the Financial Sector Information register and make provision for its operation;
• provide for information sharing arrangements;
• create offences;
• provide for regulation making powers of the Minister;
• amend and repeal certain financial sector laws;
• make transitional and savings provisions.
Public hearings will be conducted at Parliament on Wednesday, 18 and Tuesday, 24 November 2015.
Please note submissions and requests to make oral presentation must be received by no later than 12:00 on Monday, 16 November 2015.
Comments can be emailed to Mr Allen Wicomb at firstname.lastname@example.org by no later than 12:00 on Monday, 16 November 2015.
Enquiries can be directed to Mr Allen Wicomb on tell (021) 403 3759.
Issued by Hon. YI Carrim, MP, Chairperson: Standing Committee on Finance (National Assembly)
In December 2013, Cabinet approved the establishment of two regulators: a Prudential Authority within the South African Reserve Bank (‘‘Reserve Bank‘‘) to supervise the safety and soundness of banks, insurance companies and other financial institutions, and the Financial Sector Conduct Authority to supervise how financial services firms conduct their business and treat customers. This followed earlier approval in July 2011 for a shift to a Twin Peaks approach to financial regulation, including the role of the Reserve Bank in overseeing financial stability. The draft Financial Sector Regulation Bill (‘‘the Bill‘‘) was approved by Cabinet on 4 December, 2013 for publication for public comment. The Bill was substantially revised after carefully considering comments received during the public comment process. The Bill was published again for public comment in December 2014. This version of the Bill was finalised after consideration of the comments received during the second public comment process. Twin Peaks is a comprehensive and complete system for regulating the financial sector, prioritising the customer and protecting their funds. It represents a decisive shift away from a fragmented regulatory approach. The Twin Peaks model of financial regulation is designed to underpin a comprehensive regulatory system, with two main aims: • to strengthen financial stability and the soundness of financial institutions, by creating a dedicated Prudential Authority; and • to protect financial customers and ensure that they are treated fairly by financial institutions, by creating a dedicated Financial Sector Conduct Authority. In addition to the two regulators, the approach establishes a harmonised system of licensing, supervision, enforcement, customer complaints (including ombuds), a review mechanism and consumer education. This ‘‘single system’’ supports regulatory consistency, and reduces the scope for regulatory arbitrage or ‘‘forum shopping’’. It also makes it easier for any customer experiencing a problem, as the customer is often confused about where to complain when experiencing unfair treatment from a financial institution. Within this system, the Reserve Bank oversees financial stability within a policy framework agreed with the Minister of Finance. The Bill aims to improve the structure of regulation of the financial services sector, by ensuring more consistent and complete regulation, including for market conduct. It will give the Financial Sector Conduct Authority and the Prudential Authority jurisdiction over all financial institutions, and will provide them with a range of supervisory tools to fulfil their mandates. Given the scale of the transformation in regulating the financial sector, the Twin Peaks system will be implemented in two stages. The first stage establishes the regulators and a uniform system and standards, with existing sub-sectoral (or activity-based) laws (for example on insurance and banking) remaining in place. In the second stage, the focus will be to streamline the current activity-based legislation (separate for banking, insurance, credit, pensions, etc.) into consolidated legislation, to reduce the scope for regulatory arbitrage.