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The FSCA’s cooperative and collaborative measures will play a significant role in ensuring that the strategic priorities are met

The enactment of the FSR Act has allowed South Africa to shift towards a Twin Peaks model of financials sector regulation where there will be a definite distinction between regulatory functions between a regulator that performs prudential supervision – the Prudential Authority (PA) and a regulator that performs market conduct supervision - The Financial Sector Conduct Authority (FSCA). For the Twin Peak model to function effectively there needs to be effective communication between the FSCA and the PA, together with the other relevant authorities to avoid duplication of work. Hence the existence of the Financial System Council of Regulators, a council that is high level forum created by the FSR Act to facilitate cooperation and collaboration among a range of institutions with an interest in the financial sector. The council which the FSCA Commissioner is a part of, is chaired by the Director-General of the National Treasury, and also comprises of the Chief Executive Officers of the PA and the NCR together with senior representatives of the Department of Trade and Industry, the Department of Health, CMS, Financial Intelligence Centre, National Consumer Commission, the Competition Commission, the SARB, the Deputy Governor responsible for financial stability matters, and any organ of state or other organisation that the Minister of Finance may determine. The FSCA is responsible for performing secretariat and administrative functions in relation to the Council.

Collaboration and cooperation become important as the FSCA’s extended mandate gives it oversight over financial institutions that are already regulated by other local authorities. This has created a platform for the Authority to enter into Memoranda of Understanding on how common functions and responsibilities will be managed.

The FSCA and the PA for example, share the role of strengthening the integrity and efficiency of financial markets with the PA’s power to ensure financial soundness of retirement funds delegated to the FSCA for three years, as directed under the FSR Act. Also, as per the Act requirement, the FSCA and the PA have concluded a comprehensive (MoU) to ensure that they work together effectively and efficiently by consistently through consistent collaboration. Areas of shared responsibilities include:

  • Having consistent, shared policy positions and formulating joint regulatory strategies

  • Making joint standards and other regulatory instruments

  • Licencing financial institutions

  • Designating financial conglomerates

  • Supervisory on-site inspections and investigations

  • Enforcement and administrative action

Additional collaborative and cooperative measures, the FSCA will undertake with other relevant entities incude:

  • A MoU between the South African Reserve Bank (SARB) and the FSCA to govern cooperation in supporting financial stability, and working with the SARB’s National Payment System Department (NPSD) on oversight of payment service providers, as well as with the SARB Financial Surveillance Department (FinSurv) on services related to the buying and selling of foreign exchange.

  • An MoU with the National Credit Regulator (NCR) will govern responsibilities for oversight of the credit industry.

  • An MoU between the FSCA and the Financial Intelligence Centre (FIC) is already set out in the FSR Act. Further MoUs envision cooperation with the Prudential Authority (PA) and with the SARB to ensure holistic oversight of money-laundering and terror-financing risks, while recognising that supervision of compliance with the FIC Act has both market and prudential implications.

  • Discussions with the Council for Medical Schemes (CMS) to determine how and in which cases the FSCA agreement is required with CMS decisions. The FSCA is also exploring broader opportunities for collaborating with the CMS on consumer protection objectives in the medical schemes sector.

  • The FSCA will have regard for international standards to which South Africa subscribes, in ensuring that financial markets comply with these standards where appropriate; without losing sight of unique South African circumstances that may impact such compliance. To this end, the Authority actively participates in relevant international and regional bodies and forums, in order to keep abreast of international developments.

  • Participating in the periodic reviews of the Financial Sector Assessment Programme (FSAP), which is a voluntary assessment by the International Monetary Fund (IMF) which probes the stability of a country’s financial system and helps to identify key sources of systematic risk in the financial sector. The objective of this is to work towards implementing policies that enhance South Africa’s resilience to shocks and contagion.


The FSCA recognises the importance of open, honest and constructive collaboration and cooperation with all relevant authorities which will go a long way in making itself more accessible to an ever-wider range of financial customers and businesses and carrying out its newly extended mandate and implementing its strategic objectives for the next three years.