Draft Conduct of Financial Institutions Bill Gazetted

National Treasury

During December, national treasury published the Draft Conduct of Financial Institutions Bill in Government Gazette 42114 for comment.

The proposed legislation is designed to provide for the setting up of a consolidated, comprehensive and consistent regulatory framework for the conduct of financial institutions.

Treasury had earlier in a statement described the draft bill as the “next phase of the legislative reforms aimed at strengthening the regulation of how the financial services industry treats its customers”.

The Draft Conduct of Financial Institutions Bill aims to:

•    provide for the establishment of a consolidated, comprehensive and consistent regulatory framework for the conduct of financial institutions that will—
-protect financial customers, promote the fair treatment and protection of financial customers by financial institutions;
-support fair, transparent and efficient financial markets;
-promote innovation and the development of and investment in innovative technologies, processes and practices;
-promote trust and confidence in the financial sector;
-promote sustainable competition in the provision of financial products and financial services;
-promote financial inclusion;
-promote transformation of the financial sector; and
-assist the South African Reserve Bank in maintaining financial stability;
•    provide for the application and supervision of requirements for the conduct of financial institutions;
•    provide for the licensing of financial institutions and the authorisation of representatives;
•    provide for requirements regarding culture and governance, and empower standards to be made regarding culture and governance;
•    provide for requirements regarding financial products, and empower conduct standards to be made regarding financial products;
•    provide for requirements regarding financial services, and empower conduct standards to be made regarding financial services;
•    provide for requirements regarding promotion, marketing and disclosure, and empower conduct standards to be made regarding promotion, marketing and disclosure;
•    provide for requirements regarding distribution, advice and discretionary investment management, and empower conduct standards to be made regarding distribution, advice and discretionary investment management;
•    provide for requirements regarding post-sale barriers and obligations, and empower conduct standards to be made regarding post-sale barriers and obligations;
•    provide for requirements regarding safeguarding assets and operational requirements, and empower conduct standards to be made regarding safeguarding assets and operational requirements;
•    provide for requirements regarding reporting, and to empower conduct standards to be made regarding reporting;
•    provide for remedial actions for financial customers; and
•    provide for matters connected therewith.

Comment on the draft bill is invited until 1 April 2019.

Meanwhile, the South African Reserve Bank, in Gazette 42100, published the amendment of the directive for conduct within the National Payment System in respect of the collection of payment instructions for authenticated collections.

According to the notice, the directive provides for the conduct of participants involved in the collection of payment instructions in the early debit order environment.

The directive came into force on the date of publication.

In a separate matter, the Accounting Standards Board, in Gazette 42100, published an invitation to comment on an Exposure Draft focused on Transitional Provisions for the Adoption of Standards of GRAP by Community Education and Training Colleges.

Comment is due by 8 February 2019.

The South African Revenue Service (SARS), in Notice 1371, published the list of new and re-appointments to the Tax Board for the hearing of income tax appeals.

In Notice 1372, SARS has declared that failure by a company to submit an income tax return within 21 days following the issuing of a final demand is an incidence of non-compliance subject to a fixed amount penalty.

Sabinet Cape Town Office

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