Prof Corlia van Heerden from the Faculty of Law of the University of Pretoria comments on the The Financial Sector Regulation Act 9 of 2017 which has been put  into incremental operation since 1 April 2018. 

This Act is significant as it introduces a Twin Peaks model of financial regulation for South Africa which seeks to promote and maintain financial stability as core objective. 

The Financial Sector Regulation Act 9 of 2017 has been put into incremental operation on 1 April 2018.

This Act is significant as it introduces a Twin Peaks model of financial regulation for South Africa which seeks to promote and maintain financial stability as core objective. The essence of the South African Twin Peaks model is that it establishes a new prudential regulator, the Prudential Authority, tasked with overseeing the system wide safety and soundness of financial institutions, as well as a new market conduct regulator, the Financial Sector Conduct Authority, tasked with overseeing system wide efficiency and integrity of financial markets and affording greater financial consumer protection. Within this model of “regulation by objective” the South African Reserve Bank as central bank is given an express and expanded financial stability mandate.

The success of the model will depend largely on effective and efficient cooperation and collaboration between the various financial regulators and organs of state that engage in the financial sector. For purposes of facilitating such cooperation various committees are established and memoranda of understanding will be entered into. The Financial Sector Regulation Act thus puts in place an appropriate legislative and institutional framework to foster better financial sector regulation in South Africa.