South Africa: Government acts to improve understanding of financial markets
New regulatory framework will also ensure that financial institutions treat their customers fairly, says Finance Minister.Stakeholders in the financial sector need to up their game to ensure that the average South African has a better understanding of how financial markets work, South African finance minister Nhlanhla Nene has said.
"As government, we need to ensure that a proper legislative and regulatory framework is in place (…) We need a financial market that is more 'inclusive' and products that are simple enough to ensure more people are able to use them," he told the South African Government News Agency.
The Minister said the country needs an ethical industry and that punitive measures must be instituted when ethics are not respected.
He added the National Treasury's new regulatory framework will now place as much emphasis on ensuring that financial institutions treat their customers fairly as on making sure that those institutions are solvent and liquid.
"What is more, we are shifting from a rules-based regulatory framework that has supported 'tick-box' compliance, to one which prioritises good outcomes for financial customers and the macro-economy."
Financial institutions will thus need to show that they are not only meeting the minimum rules set, but that they also have an entrenched customer-centric approach to their businesses across the product life-cycle.