Finance Minister Nhlanhla Nene has launched two authorities that make up South Africa’s new Twin Peaks system of financial regulation, bringing to fruition a regulatory reform announced in 2011.
In a statement on Friday, Treasury said the Minister launched the two authorities, namely the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA), following a journey of regulatory reform announced in the 2011 policy document, ‘A safer financial sector to serve South Africa better’.
The Twin Peaks model of regulation establishes two financial sector regulatory authorities.
Twin Peaks aims to create a safer financial sector that works effectively in the interests of all South Africans by reducing potential threats to the financial system and providing better protection to financial customers.
Financial Sector Conduct Authority
The FSCA replaces the Financial Services Board and will supervise how financial institutions conduct their business and treat customers.
It will be responsible for significantly improving customer protection in the financial sector and driving better customer outcomes, ensuring that the sector serves South Africans best. It is also responsible for the efficiency and integrity of financial markets.
Speaking at the launch of the FSCA this week, the Minister highlighted that this shouldn’t be seen as merely a name change, but a reinvigoration and refocus of the organisation to driving improved market conduct outcomes.
Meanwhile, a Transitional Management Committee has been established to facilitate the smooth transition from the Financial Services Board to the FSCA. The Committee is responsible for implementing transitional plans, until a FSCA Commissioner and Deputy Commissioners are appointed.
The previous chair of the FSB Board, Abel Sithole, together with the previous executive committee of the Financial Services Board, is included in the Transitional Management Committee. A selection committee has been established to recommend candidates for the inaugural Commissioner and Deputy Commissioners of the FSCA.
Prudential Authority
The PA is a new entity within the Reserve Bank. It replaces the Banking Supervision Department and will be responsible for the safety and soundness of banks, insurers and other financial institutions.
Speaking at the launch of the Prudential Authority, Minister Nene paid tribute to the role the central bank has played in maintaining monetary and financial stability during the past few years.
The Minister noted the critical role that accountable, operationally independent institutions with clear mandates play in building South Africa.
The two authorities’ websites are www.fsca.co.za and www.prudentialauthority.co.za.
The advert for the inaugural Commissioner and Deputy Commissioners is available at www.treasury.gov.za/careers . – SAnews.gov.za
