South African President Jacob Zuma on Monday signed in to law the Financial Sector Regulation Act, know as “Twin Peaks”, which will establish a prudential regulator and a separate, dedicated market conduct regulator.
A statement released by the Presidency said the act aims to achieve a financial system that works in the interests of consumers, and supports balanced and sustainable economic growth.
The “Twin Peaks” model will see the creation of a prudential regulator, which will oversee risks taken on by financial firms such as banks and focus on macroprudential aspects of financial stability. It will be housed in the South African Reserve Bank (SARB).
The Financial Services Board (FSB) will become a dedicated market conduct regulator, tasked with ensuring consumers are treated fairly and financial firms’ conduct complies with law.
The act was mooted mainly in response to the 2008 global financial crisis.
The Presidency said the act would also ensures co-operation between the financial sector regulators, the National Credit Regulator, the Financial Intelligence Centre and the central bank.