Cabinet has approved the Conduct of Financial Institutions (COFI) Bill for submission to Parliament, marking a further step in South Africa’s long-running financial sector regulatory reform process.
The development was confirmed in a Cabinet statement issued following its meetings of 25 March and 1 April 2026.
According to the statement, the purpose of the Bill is to establish a single, comprehensive framework for regulating the market conduct of financial institutions. This forms part of government’s broader shift to the Twin Peaks model of financial regulation, which separates prudential supervision from market conduct oversight.
Cabinet indicated that the COFI Bill is intended to support fair customer treatment, enhance transformation in the financial sector, and promote stability. It also aims to support market development and competition, including by enabling a more differentiated approach to licensing that could facilitate the entry of new players such as financial technology firms.
In addition, the Bill will require financial institutions to have policies in place to comply with the Financial Sector Code.
The Cabinet statement did not indicate to what extent – if any – the Bill to be tabled differs from earlier drafts released for public comment.
Cabinet also approved the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill for introduction to Parliament.
National Treasury published the draft Bill for public comment on 14 January 2026.
The Bill proposes amendments to four pieces of legislation: the Financial Intelligence Centre Act, the Nonprofit Organisations Act, the Trust Property Control Act, the Companies Act, and the Financial Sector Regulation Act (FSRA).
The amendments are designed to address remaining deficiencies in South Africa’s anti-money laundering and counter-terrorism financing (AML/CFT) framework ahead of the next Financial Action Task Force Mutual Evaluation, which is scheduled to begin in mid-2026 and conclude in October 2027.
Among the most consequential changes is the expansion of what constitutes a financial product or financial service to include arrangements that are similar in nature or produce similar outcomes to traditional financial products, regardless of the technology used.
The Bill also broadens regulators’ powers to require licensing under the FSRA, even where an institution is already licensed under other legislation. It strengthens the regulators’ ability to obtain information directly from significant and beneficial owners and to initiate investigations where there is a reasonable suspicion of non-compliance.
The Bill introduces a range of technical but far-reaching changes across the AML/CFT framework. These include stricter record-keeping and reporting obligations, expanded information-sharing between regulators and public bodies, enhanced protections for whistleblowers and reporting entities, increased administrative penalties and enforcement powers, and tighter oversight of non-profit organisations and corporate ownership registers.
