On 28 September 2020, National Treasury released the second draft Bill regulating the conduct of Financial Institutions, for comment.
The aim of the Bill is to impose conduct standards for financial institutions to protect financial customers.
The Bill is the second peak of the Twin Peaks model and will require market conduct that emphasises the fair treatment of customers. The regulatory authority will be the Financial Sector Regulatory Authority.
The Bill will create the framework for the market conduct of most financial institutions, such as banks, insurers, financial intermediaries, pension funds, credit ratings agencies, collective investment schemes, and entities in the financial markets space.
The ultimate objective of the Bill, together with the Financial Sector Regulation Act 2017, is to replace the various sector specific pieces of financial services legislation. For instance, all the market conduct requirements for insurers surviving under the previous insurance laws will fall into the ambit of this law. Banks’ market conduct and governance will be similarly regulated.
The objects of the Bill include innovation, financial inclusion and transformation of the financial sector.
The Bill also proposes material amendments to a number of financial laws such as the Pension Funds Act, CISCA, the Financial Sector Regulation Act, insurance laws and others.
Anyone involved in the financial sector must give the Bill close attention, particularly given the relatively short period for comment – comments are due by 30 October 2020 and can be sent to marketconduct@treasury.gov.za