1 April 2018 signalled the dawn of a new era for South Africa’s financial sector; the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA), came into operation.
Deputy Governor of the Reserve Bank, Kuben Naidoo, was announced by the National Treasury (NT) as the CEO of the Prudential Authority under the Financial Sector Regulation Act (FSRA).
The FSCA, has a different set up in that the Minister of Finance, has - for the interim, determined that a Transitional Management Committee will manage the FSCA until the Commissioner of the FSCA is appointed.
On 29 March 2018, the Minister of Finance, published the Notice on the Commencement FSRA (Notice) which set out the details of the commencement of different sections of the FSRA, as well as the details of other laws which will be repealed or amended by the FSRA.
The Notice establishes the new Twin Peaks Regulators with effect from 1 April 2018, and in addition, it also provides, amongst others, for the commencement of following provisions with effect from 1 April 2018:
1. The South African Reserve Bank’s (Resbank) responsibility for financial stability as well as the establishment of the Financial Stability Oversight Committee which is primarily responsible for supporting the Resbank in the its performance of functions relating to financial stability
2. Powers of each responsible authority to grant, vary, suspend and revoke licences
3. Powers of the PA and the FSCA to issue directives to financial institutions and to a key person of the financial institution
4. Establishment of the Financial Services Tribunal and the Financial System Council of Regulators
5. Schedule 2 which designates responsible authorities for each financial sector law
6. Commencement of consequential amendments to various financial sector laws including to the Short Term Insurance Act
Effective dates of other provisions of the FSRA
The Notice also provides for the commencement date of other provisions of the FSRA, where the date is not 1 April 2018:
1. Provisions relating to the Ombud Council will take effect on 1 October 2018
2. The designation of members of a group of companies as a financial conglomerate will take effect on 1 March 2019
3. Provisions relating to significant owners will take effect on 1 January 2019
4. Provisions relating to fees and levies will take effect on 1 April 2019
Provisions that are not included in the Notice will come into effect on dates yet to be determined.
The SAIA is excited about the new dispensation and supports that PA and the FSCA in their new journeys.
For more information contact:
Mashudu Mabogo, SAIA Legal Manager