New "Twin Peaks" financial regulation could be implemented in South Africa

Feb 05, 2013

The South African financial authorities are looking at implementing new reforms in a bid to strengthen the country's financial regulation, protect consumers of financial services and promote confidence in the country's financial system.

The South African financial authorities are looking at implementing new reforms in a bid to strengthen the country's financial regulation, protect consumers of financial services and promote confidence in the country's financial system.

The Financial Regulatory Reform Steering Committee (FRRSC) - which includes the National Treasury, South African Reserve Bank and Financial Services Board - has published on Friday (February 1st) a summary of the proposals for implementing the "Twin Peaks" model.

"The Twin Peaks approach entails creating a prudential regulator housed in the South African Reserve Bank (SARB), and transforming the Financial Services Board into a dedicated market conduct regulator", according to a press release by the National Treasury.

"The objective of the prudential regulator will be to maintain and enhance the safety and soundness of regulated financial institutions."

As part of these reforms, the Reserve Bank's powers will be enhanced, so that it becomes the systemic regulator.

The institution will be responsible for the prudential safety and soundness of banks and insurance companies and the maintenance of the financial stability of the system.ADNFCR-2976-ID-801534610-ADNFCR