The Financial Services landscape is changing
The Twin Peaks model for financial regulation came into force on April 1 with the aim of creating a safer financial sector which protects consumers and reduces threats to the financial system.
As a result the Financial Services Board (FSB) has been replaced by the Financial Services Conduct Authority (FSCA) and a new Prudential Authority has been established.
Finance Minister Nhlanhla Nene launched these authorities in line with the Financial Sector Regulation Act for 2017.
At the launch, Nene said that Twin Peaks is a “dynamic, innovative and smart system”. “It aims to streamline our approach to financial regulation, to clearly define roles and responsibilities, and to create flexibility.
“It creates a dedicated Prudential Authority to look after safety and soundness, and a dedicated conduct authority to look after the way financial institutions treat their customers.”
What does the FSCA do?
The objectives of the FSCA are to protect financial customers by promoting fair treatment by financial institutions, providing financial education programs, and promoting financial literacy.
The FSCA will also support the efficiency and integrity of financial markets. It will assist in maintaining financial stability and support financial inclusion and transformation of the financial sector.
“It will be responsible for significantly improving customer protection in the financial sector, and driving better customer outcomes, ensuring that the sector serves South Africans best,” .
Gradually changes will be introduced over the year. Immediate changes however include the establishment of a Financial Sector Tribunal, for those aggrieved by an FSCA decisions. This tribunal will replace the former FSB Appeal Board.
Who is heading the FSCA?
A commissioner and deputy commissioners will be appointed to serve as the executive committee. The process of appointing the commissioners is set out in regulations by the finance minister.
A Transitional Management Committee will manage the FSCA until the commissioner is appointed. This committee will include members from the former FSB executive committee, the chairperson of the former FSB board Abel Sithole and National Treasury’s Katherine Gibson. Sithole will act as commissioner until the new commissioner is appointed, the FSCA stated.
The committee has already started working and they will continue to serve in an advisory capacity for three months after the commissioner is appointed.”
The new Fit and Proper requirements introduced with Board Notice 194 of 2017 refers to the replacement of the 26 product specific second level REs with class of business training and product specific training, known jointly as product training. Accredited providers, which are accredited by the relevant Skills Education Training Authorities (SETA) according to Quality Council for Trades and Occupations (QCTO) criteria, must provide class of business training.
Fit and Proper requirements per the new board notice 194 of 2017 include:
- Personal character qualities of Honesty and Integrity
- Good Standing
- Competence (including experience, qualification, Regulatory exams and Product training)
- Continuous Professional Development
- Operational Ability
- Financial soundness
Get a qualification recognised by the FSCA
The requirement for representatives to have a qualification has not changed. Guarantee Trust Institute of Business (GTIB) is accredited by the relevant Seta’s to deliver National Certificate: Banking ; National Certificate: Wealth Management and National Certificate: Generic Management. These three qualifications are recognised as being acceptable qualifications for representatives working for Category I FSP’s and are registered by SAQA on NQF level 5.
When you register for any of these qualifications you will qualify to receive the free training to prepare you for the Regulatory Exams for Representatives.