Cabinet approves financial services laws

Cape Town - Cabinet has approved the financial services laws general amendment bill, intended to make the financial sector "safer".

The bill effects urgent and necessary legislative changes following the 2008 financial crisis, government spokesperson Jimmy Manyi told journalists at parliament on Thursday.

Cabinet held its regular fortnightly meeting on Wednesday.

Manyi said the changes were outlined in the National Treasury's policy paper "A safer financial sector to serve South Africa better".

The bill updated 10 financial sector acts, including the Financial Services Board Act, the Inspection of Financial Institutions Act, the Short-term and Long-term Insurance Acts, the Pension Funds Act, and the Financial Advisory and Intermediary Services (Fais) Act.

The bill seeks to ensure a sound and well-regulated financial services industry and to promote financial market stability.

It is intended to strengthen the financial sector regulatory framework, enhance the supervisory powers of regulators, and enhance the powers of the finance minister to address potential risks to the financial system.

Manyi said the bill addresses a number of areas, including gaps identified by the International Monetary Fund and World Bank financial sector assessment programme in adherence to international standards for financial regulation.

It further addresses the need to align financial sector legislation with the Companies Act, and regulatory overlaps caused by the Consumer Protection Act by ensuring overrides where financial sector legislation had higher consumer protection standards.

It also extends the approach of the Banks Act regarding mergers in the financial sector, and ensures that the finance minister has adequate emergency powers to deal with systemic risks to the financial system, Manyi said.