Rosemary Lightbody, Senior Policy Advisor at the Association for Savings and Investment South Africa (ASISA), recently provided insight into ASISA’s views on a number of important aspects concerning Twin Peaks.
In an article in the latest FSB Bulletin she comments, amongst others, on the following:
Exclusion of the NCR from Market Conduct Regulation
We value the consultative process that has been followed in the developments of the FSR Act, which is the enabling piece of legislation for the implementation of the Twin Peaks model. Our members are largely comfortable with the final version of the Act and the amendments to it that are proposed by the National Council of Provinces.
However, we are disappointed that the NCR has not been brought within the ambit of the Twin Peaks structure, under the Market Conduct Regulator. ASISA’s life office members, to the extent that they provide life policies to cover the debt in the event of the death of the debtor, are regulated by the NCR. The inclusion of the NCR would have enhanced coherent regulation and consistency of application. We note that the Financial Stability Board, in its Peer Review of South Africa Report dated 5 February 2013, expressed a similar view.
Effective coordination between the Prudential Regulator and the Market Conduct Regulator will be vital – both proactive coordination, before regulatory changes are finalised or implemented, as well as reactive. We look forward to more detail on how synchronisation between the regulators with dual responsibilities for the same organisations and in some cases the same functions will be achieved.
Frameworks and process rules will need to be clearly defined and available to regulated entities to ensure that overlapping responsibilities and accountability do not lead to serious inefficiencies and, potentially, unnecessary delays. This will provide institutions with the certainty that they need, in respect of their day-to-day operational interactions with the two regulators, as well as when particular issues need to be discussed by a financial institution with the regulator.
The Financial System Council of Regulators is established under the FSR Act, with the aim of facilitating cooperation, collaboration and consistency between the Twin Peaks regulators and the Department of Trade and Industry, the Department of Health, the NCR, the Council for Medical Schemes, the FIC, the National Consumer Commission, the Competition Commission, and the Deputy Governor of the Reserve Bank responsible for financial stability matters. Effective synchronisation between all of these regulatory agencies will also be very important.
Never mind that man – Give me a Bells – editor.
Please click here to read the full article Twin Peaks – strengthening the financial sector through more efficient regulation