The delay was confirmed at the FSB’s 10th annual financial advisory and intermediary services (FAIS) conference in Johannesburg on Friday.
The Twin Peaks model will see the creation of a Prudential Authority, housed in the South African Reserve Bank (SARB), with the FSB rebranded as the Financial Sector Conduct Authority and transformed into a dedicated market conduct regulator.
Caroline Da Silva, deputy executive officer for FAIS, said: “The Financial Sector Regulation Bill (which provides a framework for the implementation of the Twin Peaks model) is currently going through the parliamentary phases and will go through another round of consultation by the National Council of Provinces (NCOP) on 29 March 2017.”
The Financial Sector Regulation Bill had been expected to pass through parliament in late 2016 or early 2017, and be implemented soon thereafter.
“This effectively means that the envisaged date for the implementation of Twin Peaks has been postponed and will be guided by the parliamentary process,” Da Silva said.
Twin peaks model
The new regulatory model has two fundamental objectives:
- To strengthen South Africa’s approach to consumer protection and market conduct in financial services; and
- To create a more resilient and stable financial system.
The Prudential Authority’s objective will be to promote and enhance the safety and soundness of regulated financial institutions; while the Financial Sector Conduct Authority will be tasked with protecting financial customers through supervising market conduct.
Leanne Jackson, market conduct advisor at the FSB, told the FAIS conference that further consultation on the various instruments comprising phase one of the RDR proposals has begun and will continue over the first quarter of 2017.
In August 2016, Jackson told International Adviser that the first phase of RDR would be introduced on 1 January 2017, six months after the original deadline.
Jackson told delegates that the FSB has set up an RDR consumer education work stream with industry participation to help customers understand the value of the new regulations.
Describing the retail distribution review as an “intrusive piece of legislation”, the FSB said the intention behind it is to ensure that financial products are distributed in ways that support the delivery of treating customers fairly.