A new era for South Africa's financial services: conduct of financial institutions bill set to transform the sector

ONCE enacted, the much-anticipated Conduct of Financial Institutions Bill (COFI) will introduce a significant shift in the legislative and regulatory landscape of South Africa’s financial services sector, according to Webber Wentzel Financial Regulatory Practice Group.

- DIEKETSENG MALEKE

The group says the Bill forms a key component of the country’s Twin Peaks regulatory reform and will primarily focus on strengthening market conduct regulation across the entire financial services sector.

COFI will, amongst others, consolidate and replace various industry-specific conduct laws, such as the Financial Advisory and Intermediary Services Act, 2002; the Collective Investment Schemes Control Act, 2002; the Short-term Insurance Act, 1998; the Long-term Insurance Act, 1998; the Credit Rating Services Act, 2012; the Financial Institutions (Protection of Funds) Act, 2001; and the Friendly Societies Act, 1956, the group says.

“It will also effect extensive amendments to the Pension Funds Act, 1956; the Financial Sector Regulation Act, 2017; the Banks Act, 1990; the Labour Relations Act, 1995; the Insurance Act, 2017; the Income Tax Act, 1962; the Financial Markets Act, 2012; the Medical Schemes Act, 1998; the Transnet Pension Funds Act, 1990; the Cooperative Act, 2005; and the Government Employees Pension Funds Law, Proclamation, 1996. It further scopes within its ambit certain activities under the National Payments Systems Act, 1998, and the National Credit Act, 2005,” it says.

The group says COFI readiness is essential “Following two rounds of public commentary, COFI is expected to be introduced in Cabinet towards the end of 2025 and tabled in Parliament either later this year or in the first quarter of 2026. Its promulgation is anticipated in 2026, with a transitional period of approximately three years to follow,’ it says.