Conduct of Financial Institutions Bill
A short summary of the proposed changes
During December 2018, the National Treasury published the long-anticipated COFI Bill for comment. The COFI Bill follows the Financial Sector Regulation Act (FSR) which came into effect during 2018 and established the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA).
According to the media statement of the National Treasury, the COFI Bill’s aim is to be a consolidated regulatory framework for the conduct of financial institutions that will give legislative effect to the market conduct policy approach which includes the implementation of the Treating Customer Fairly principles. The COFI Bill will thus replace the current financial sector laws.
The COFI Bill differs from current financial sector laws in the following aspects:
It is principle based rather than rule-based;
Supervision will be focused on various outcomes;
It is an activity-based regulation. (Thus the same regulation will apply to the same activity rather than different regulation per type of institution);
Risk-based and proportionate (allowing the regulators to focus on greater risk areas and apply proportionality with supervision, conduct standards, and enforcement action).
To read the Media statement, Policy statement and the draft Bill please click here.