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FSB welcomes new SA regulatory model

Feb 06 2013 10:36
I-Net Bridge

Johannesburg - The international Financial Stability Board (FSB) has welcomed SA’s planned reforms and agrees that a shift to a twin peaks model provides a good opportunity for SA to streamline responsibilities and elevate the importance of market conduct regulation.

The FSB is chaired by Mark Carney‚ Governor of the Bank of Canada and soon to be Governor of the Bank of England. Its secretariat is located in Basel‚ Switzerland‚ and hosted by the Bank for International Settlements (BIS).

A twin peaks regulatory structure involves separate prudential and market conduct regulators.

The peer review of SA was the seventh country peer review conducted by the FSB and the first using the revised objectives and guidelines for the conduct of peer reviews set forth in the December 2011 Handbook for FSB Peer Reviews.

The UK‚ US‚ Indonesia and Germany would undergo peer reviews in 2013.

The Financial Regulatory Reform Steering Committee of the National Treasury‚ South African Reserve Bank and Financial Services Board‚ released proposals on Friday that will take regulatory reform closer to completion‚ with legislation to be tabled to parliament in 2013/14.

During this first phase in 2013/14‚ changes will be made to ensure regulators can deliver on their revised mandates and will also entail integrating FSB staff into the central bank.

The second phase is to be implemented over the medium term and this will entail harmonising financial sector legislative‚ regulatory and supervisory systems and frameworks.

The FSB said the introduction of a new regulatory structure will require careful planning because SA is simultaneously tightening rules for regulated firms and expanding the perimeter of regulation to comply with new international standards.

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