Some seriously bad outcomes for consumers of financial products resulted from products being designed in a way to circumvent regulatory supervision or action.
Co-operation and collaboration between various bodies will form a cornerstone of financial services regulation under Twin Peaks when performing their functions in terms of financial sector laws. These bodies include the Financial Services Conduct Authority (FSCA), Prudential Authority (PA), National Credit Regulator NCR), Financial Intelligence Centre (FIC) and SA Reserve Bank (SARB).
These bodies must, at least annually, as part of their annual reports or on request, report to the Minister, the Cabinet member administering the NCA and the National Assembly on measures taken to co-operate and collaborate with each other.
A Financial System Council of Regulators (FSCR) is to be established to facilitate co-operation and collaboration, and, where appropriate, consistency of action, by providing a forum for senior representatives to discuss, and inform themselves about, matters of common interest.
Institutions represented on the FSCR include, apart from the above, National Treasury, the Departments of Trade and Industry and Health, the Council for Medical Schemes and the National Consumer Council, as well as any other body determined by Minister.
In addition, a Financial Sector Inter-Ministerial Council (FSIMC) is to be established to facilitate co-operation and collaboration between Cabinet members administering legislation relevant to the regulation and supervision of the financial sector by providing a forum for discussion and consideration of matters of common interest. Ministers represented include Finance, Health, Economic Development, and “Cabinet members responsible for consumer protection and consumer credit matters.”
A Financial Stability Oversight Committee (FSOC) is also to be established to support the SARB in performing its functions in relation to financial stability, and facilitate co-operation and co-ordination of action among the FSCA, PA, NCR, FIC & SARB in this regard.
The Governor of the FSOC must establish a Financial Sector Contingency Forum (FSCF) to assist the FSOC with identification of potential risk that systemic events will occur and the co-ordination of appropriate plans to mitigate those risks.
Whilst the value of such co-ordination and collaboration is clear, one wonders about the costs it will incur, and the impact on the fiscus, as well as consumers, should the industry be required to fund it via levies.