The FSB also told International Adviser that once the Financial Sector Regulation (FSR) Bill comes into force, the regulator will restructure itself as the Financial Sector Conduct Authority (FSCA), a move that closely mirrors the UK Financial Services Authority’s (FSA) transformation into the Financial Conduct Authority (FCA) in 2012.
The rebrand followed the introduction of the Financial Service Act.
Like the FCA, the FSB also plans to shift all of its prudential work on to the Prudential Authority at the country’s Reserve Bank.
The Pretoria-based watchdog said the RDR delay was because the latest draft of the FSR Bill, published in October 2015, was still awaiting parliamentary approval as is the Insurance Bill.
Aimed at overhauling South Africa’s financial services sector, the FSR legislation proposes replacing the current commission system with a fee-based model similar to the UK.
The final draft of the FSR included 14 proposals as part of the first phase of RDR, which was initially scheduled for July 2016, but the regulator has now confirmed that the proposals will not take effect until sometime next year – although no date has been specified.
‘Unsustainable financial advice’
The delays were revealed during the FSB’s deputy executive officer, Caroline da Silva’s comments this week, where she said financial advice in South Africa’s is unsustainable in its current form and urgently requires the introduction of RDR.
Meanwhile, Craig Featherby, the group managing director of South African advisory firm Carrick Wealth, told IA Wednesday morning: “Legislation, whilst mostly well intended in South Africa has the tendency to be delayed and sometimes poorly implemented.”