The Financial Sector Regulation Act

Vessio, Monica

Abstract

The financial sector in South Africa comprises over 6 trillion in assets, contributing 10,5% of the gross domestic product of the economy annually, employing 3.9% of the employed and contributing at least 15% of corporate income tax. Since 2000, the sector has grown at an annual rate of 9.1% and has become one of the fastest-growing employers in South Africa. The financial services sector enables economic growth, job creation, building of vital infrastructure and sustainable development. It is therefore crucial that the sector is well regulated and stable.
National Treasury launched a formal review of the financial regulatory system in 2007. The scope of this review was expanded in 2008 after the financial crisis. The work culminated in a National Treasury Policy Document dated in February 2011 entitled “A safer financial sector to serve South Africa better” often referred to as the “Red Book”. The Red Book set out governments proposals emphasising financial stability, consumer protection and financial inclusion. The main proposal: to separate prudential and market conduct regulation. It was against this background that the 2011 Policy Document set out a new framework for South Africa, structured into four policy objectives: 1. Financial stability; 2. Consumer protection and market conduct; 3. Expanding access through financial inclusion; and 4. Combating financial crime. It was decided that these objects would be reached through a new regulatory Bill, the Financial Sector Regulation Bill, which after many reviews came into force in 2018. The Financial Sector Regulation Act was assented to on 21 August 2017 and the bulk of the Act came into operation on 1 April 2018, and the remaining provisions came into effect on various dates during the period February 2018 to April 2019. The chapter examines the Act and regulations.

• Publication Date: Oct 1, 2019
• Deposit Date: Oct 28, 2020
• Book Title: Banking Law and Practice
• Chapter Number: 39
• Keywords: financial regulation, South Africa, Twin Peaks, banking
• Public URL: https://uwe-repository.worktribe.com/output/6819443