15 January 2018 Finance and Banking

Twin peaks (Financial Sector Regulation Act) moves forward: Transitional arrangements

Just before the holidays, on 18 December 2017, National Treasury published the draft regulations to the Financial Sector Regulation Act, 2017 (FSR Act) for public comment. This followed National Treasury’s statement of 24 August 2017, that the financial sector should expect draft regulations for public consultation setting out the proposed transitional arrangements for the transformation of the existing financial services regulators into the two new regulators (namely, the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA)).

In summary, and as promised by National Treasury, the draft regulations cater for the smooth implementation of the establishment of the two new regulators (FSCA & PA) by clarifying and delineating the various functions which each of them must perform in terms of the FSR Act during the transitional period leading up to their establishment.

Further, the draft regulations also cater for transitional arrangements which will apply until such time as the new Financial Services Tribunal is operational.

The draft regulations setting out these transitional arrangements can be accessed via http://www.treasury.gov.za/twinpeaks/Draft%20Regulations%20in%20terms%20of%20section%20304%20of%20the%20FSR%20Act.pdf.

Commencement of the FSR Act unknown

In respect of the commencement of the FSR Act, National Treasury has not yet published the commencement notice which is to set out the details of the commencement of different sections of the FSR Act, as well as the details of other laws which will be repealed or amended by the FSR Act (as recorded in their statement of 24 August 2017). Accordingly, as it stands, the provisions of the FSR Act are not yet in force.

Deadline for comments

Comments in respect of the draft regulations must be submitted to commentdraftlegislation@treasury.gov.za by close of business on 31 January 2018.

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