FSCA aims to be more proactive as it outlines its plans

The Financial Sector Conduct Authority (FSCA) intends to be more proactive in executing its mandate as well as being more intrusive in its supervisory activities. Preparations are under way for the launch of the FSCA, which will replace the Financial Services Board (FSB). FSB’s deputy executive officer for Collective Investment Schemes and Chair of the Regulatory Strategy Committee, Jurgen Boyd has outlined some of the FSCA plans for the sector. He says the Financial Sector Regulation Act (FSR Act) enables the transition of the FSB to the newly created Financial Sector Conduct Authority with the Conduct Authority being given a wider mandate than that of the FSB. The Conduct Authority will focus on market conduct of all financial institutions, including banks as well as the efficiency and integrity of financial markets, ensuring the fair treatment of financial customers and providing existing and potential financial customers with financial education programs.

Boyd explains that the conduct of banks is not currently regulated to the same extent as the conduct of other financial institutions.

Though some conduct regulation of banks takes place under the Financial Advisory an d Intermediary Services Act, No. 37 of 2002 (FAIS), where they render services on other financial products, transactional banking is not currently supervised from a conduct perspective To ensure the fair treatment of customers, the FSCA will put standards in place and supervise the provision of financial products and services by all financial institutions, including banks. This will ensure a level playing field across the financial services industry; regulatory requirements will not follow a one size fits all approach but rather be dependent on the nature, scale and complexity of the financial institution and services concerned.

“The FSCA will implement changes progressively and will be driven by its Regulatory Strategy, which will identify the strategic regulatory objectives and focus areas for the FSCA,” says Boyd.

He adds that some strategic objectives may require changes to the legislative environment which will be included in the development of the Conduct of Financial Institutions Bill (CoFI) and some may require specific research in order to develop the most appropriate regulatory response.