The Financial Sector Regulation Bill, published on 11 December 2013, indicates a new name for the Financial Services Board.
The twin peaks regulatory framework will provide a comprehensive framework for regulating the financial sector. The implementation of Twin Peaks reform is a multi-year project, with a two-phase process envisaged (see below). This Bill covers the first phase, which is to establish the following two regulatory authorities:
- A new Prudential Authority within the Reserve Bank. This Authority will be responsible for the oversight of the safety and soundness of banks, insurers and financial conglomerates.
- A new Market Conduct Authority to protect customers of financial services firms, and to improve the way financial service providers conduct their business. This Authority will also be responsible for ensuring the integrity and efficiency of financial markets, and promoting effective financial consumer education. Phase 2 of the process will streamline the framework for market conduct legislation.
The last sentence appears to indicate that it will be business as usual for the next few months until the market conduct legislation is aligned with existing legislation. There are, of course, major changes taking place under the Financial Services Laws General Amendment Bill.
One should make hay while the sun shines. Change is inevitable, but until such time as the new requirements are communicated, most advisors should be comfortable with the current situation, and able to focus more on business realities than keeping up with legislative changes. Please see our main article below for more detail.