Public invited to comment on financial sector draft regulations

Cape Town - National Treasury published draft regulations in terms of the Financial Sector Regulation Act (FSRA) on Monday.

The public has until January 31, 2018 to submit comments on the draft regulations.

President Jacob Zuma signed the FSRA into law in August this year. It makes provision for a so-called Twin Peaks model of financial regulation.

On the one hand, the SA Reserve Bank (SARB) will be responsible for regulating all financial institutions – banks, insurance houses and the asset management sector.

On the other hand, financial conduct will be governed by a new entity, called the Financial Sector Conduct Authority (FSCA), which will replace the current Financial Services Board (FSB).

Treasury explained in a statement on Monday that the purpose of the regulations published is to facilitate the smoot implementation of the FSRA. The regulations clarify the performance of functions in terms of the FSRA during the transitional period before to the establishment of the Prudential Authority (PA), the FSCA and the Financial Services Tribunal.

In terms of the act, the minister of finance can make regulations to provide for the appropriate implementation of the FSRA. These can include the establishment of the PA, the FSCA and other entities. The minister is required to make regulations that provide a process for the appointment of the commissioner and deputy commissioners of the FSCA.

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The draft regulations provide for the advertising of the positions and for the establishment of panels to consider, short-list, interview, and recommend candidates for appointment to the minister of finance.

The intended effect of the draft regulations is to provide for a fair and transparent process for the appointment of the commissioner and deputy commissioners of the FSCA, said Treasury.

The Presidency said in an earlier statement that the act aims to achieve a financial system that works in the interests of financial customers and supports balanced and sustainable economic growth in SA.

It is expected that the new regulatory and supervisory framework will promote, among other things, financial stability, the fair treatment and protection of financial customers, the efficiency and integrity of the financial system, the prevention of financial crime and transformation in the financial sector.

The legislation also provides for cooperation and collaboration among the National Credit Regulator, the SARB and the Financial Intelligence Centre.

During parliamentary deliberations at the time, opposition parties said they were concerned that the legislation would not ensure adequate protection of consumers who apply for credit, as the National Credit Regulator does not fall under the ambit of the act.

The draft regulations can be found here.

Written comments must be submitted to commentdraftlegislation@treasury.gov.za.

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