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Johannesburg - The period for comment on the National Treasury's "twin peaks" model of financial regulation has expired and the proposals set out in the department's policy document released in February are being implemented, Ingrid Goodspeed, the Treasury's chief director of financial inclusion and market conduct, said on Monday.
Goodspeed was addressing delegates at a conference of the Compliance Institute of SA.
The twin peak model aims to improve the local financial sector's regulatory framework, where the SA Reserve Bank would act as the prudential supervisor while the Financial Services Board (FSB) regulates market conduct.
Goodspeed said that because of its potential for negative consequences to consumers, the financial services sector should be held to a higher standard of market conduct than other industries.
She said that Treasury had carefully considered other models of financial regulation before settling on the twin peaks model. These included the "institutional" approach, used in China, Mexico and Hong Kong, the "functional" approach, used by France, Italy and Spain, and Germany's "single regulator" approach.
"The twin peaks approach, which is also used by Australia, Canada and the Netherlands, garners the benefits of the single regulator approach, such as regulatory consistency, jurisdictional clarity and informational efficiency, yet also addresses the inherent conflicts between prudential regulation and consumer protection," she said.
A joint task team comprising National Treasury, the SA Reserve Bank and the FSB was implementing the model, she said. A steering committee would promote, coordinate and drive implementation initiatives and formulate and implement financial stability measures to "limit the cost of system-wide distress in the financial system".
Goodspeed said a number of initiatives were under consideration in terms of market conduct. These, she said, included developing principles on how banks should set their fees, how these fees should be disclosed and what constitutes fair and unfair practice.
How to protect consumers using funeral insurance and burial societies against unscrupulous operations was another area of consideration, and improving consumer financial education is also being looked at, she added.
Goodspeed was addressing delegates at a conference of the Compliance Institute of SA.
The twin peak model aims to improve the local financial sector's regulatory framework, where the SA Reserve Bank would act as the prudential supervisor while the Financial Services Board (FSB) regulates market conduct.
Goodspeed said that because of its potential for negative consequences to consumers, the financial services sector should be held to a higher standard of market conduct than other industries.
She said that Treasury had carefully considered other models of financial regulation before settling on the twin peaks model. These included the "institutional" approach, used in China, Mexico and Hong Kong, the "functional" approach, used by France, Italy and Spain, and Germany's "single regulator" approach.
"The twin peaks approach, which is also used by Australia, Canada and the Netherlands, garners the benefits of the single regulator approach, such as regulatory consistency, jurisdictional clarity and informational efficiency, yet also addresses the inherent conflicts between prudential regulation and consumer protection," she said.
A joint task team comprising National Treasury, the SA Reserve Bank and the FSB was implementing the model, she said. A steering committee would promote, coordinate and drive implementation initiatives and formulate and implement financial stability measures to "limit the cost of system-wide distress in the financial system".
Goodspeed said a number of initiatives were under consideration in terms of market conduct. These, she said, included developing principles on how banks should set their fees, how these fees should be disclosed and what constitutes fair and unfair practice.
How to protect consumers using funeral insurance and burial societies against unscrupulous operations was another area of consideration, and improving consumer financial education is also being looked at, she added.
