FSCA moves forward with COFI Bill as concerns mount over bank account terminations

THE Financial Sector Conduct Authority (FSCA) has confirmed that it is moving forward with the Conduct of Financial Institutions (COFI) Bill, which aims to provide a fair process for bank account closures.

- SIPHELELE DLUDLA

Following a series of delays that initially pushed the tabling of the Bill in Parliament to January, the FSCA announced on Monday that it is now set to submit the Bill to Cabinet for approval soon.

In response to a list of questions from Business Report, the FSCA said the Bill adopts a principle-based approach, in other words, it contains high-level principles that financial institutions must adhere to, to ensure the desired outcomes in the financial sector.

"However, it reinforces and extends the principles of fairness for termination of financial products and services already contained in the Conduct Standard for Banks (2020). The Conduct Standard deals explicitly with bank account terminations, i.e. financial customers must have access to a fair process when products and services are terminated (this includes account closures)," said the FSCA.

"It falls short of explicitly prescribing a fair hearing, for various reasons, including that this would not be appropriate where there is suspicion of money laundering, terror financing and other criminal activity, and may actually conflict with other legislation that requires no notice."