Financial Services Board (South Africa)

Last updated
Financial Services Board
Fsb-sa-logo.jpg
Agency overview
Formed1990
Preceding agency
  • None
Dissolved2018
Superseding agency
JurisdictionSouth Africa
Headquarters Flag of South Africa.svg Pretoria, South Africa
Employees411 (2009) [1]
Agency executive
Website www.fsb.co.za [ dead link ]

The Financial Services Board (FSB) was the government of South Africa's financial regulatory agency responsible for the non-banking financial services industry in South Africa from 1990 to 2018. On 1 April 2018 its responsibilities were split into two new agencies the Financial Sector Conduct Authority (FSCA) for conduct regulation and the Prudential Authority (PA) for prudential regulation. [2] [3]

Contents

Prior to its dissolution it was an independent body which had a mandate to supervise and regulate the non-bank financial services industry in the public interest. This included the regulation of the biggest stock exchange in Africa the Johannesburg Stock Exchange.

History

The FSB was established in 1991 based on recommendations by the Van der Horst Committee [4] to create an independent body to supervise and regulate the non-banking financial services industry. A number of additional acts later expanded and increased the role of the FSB. These included;

In September 2004, the Financial Advisory and Intermediary Services Act (FAIS) expanded the mandate of the FSB to include aspects of market conduct in the banking industry.

Financial Intelligence Centre Act (2001) and subsequent amendments have added responsibilities to the FSB to combat money laundering.

Reorganization into Prudential Authority and Financial Sector Conduct Authority

On 21 August 2017 the Financial Sector Regulation Act (FSR Act) was signed into law. 

Among other changes. the FSR Act created a prudential regulator, the Prudential Authority (PA) and a market conduct regulator, the Financial Sector Conduct Authority (FSCA.

On April 1, 2018, the PA assumed the FSB's responsibilities for non bank financial institution prudential supervision and the FSB's responsibilities for market conduct were assumed by FSCA [6]

Responsibilities and functions

The FSB's stated vision was "to promote and maintain a sound financial investment environment in South Africa" [7]

It was responsible for all non-bank financial intermediaries, which included;

It was given responsibility for ensuring that the regulated entities complied with the relevant legislation as well as capital adequacy requirements to promote financial soundness of these entities, whereby the investing community would be protected.

It was given enforcement powers to deal with breaches through the enforcement committee. The Committee could impose unlimited penalties, compensation orders and cost orders. Such orders were enforceable on the same basis as a judgment of the Supreme Court of South Africa.

It also ran a customer complaints service and a separate appeals board could be approached by anybody aggrieved by a decision of the FSB or its executive officers. The appeals board was an independent tribunal, whose members were neither employees of the FSB nor active participants in the financial services industry. Its chairman and the members were appointed by the Minister of Finance.

International

FSB was a member of International Organization of Securities Commissions (IOSCO) and is a signatory of the IOSCO multilateral MoUs.

The FSB participated in the activities of African regulatory bodies, particularly those in the Southern African Development Community (SADC) region. It had long standing close relations with Committee Of Insurance, Securities And Non-Banking Financial Authorities (CISNA), part of the SADC directorate.

Structure

The FSB's board oversaw its operations through various committees. The board also appointed the FSB executive officer who presided over the day-to-day running of the FSB. Besides those committees, the FSB also provided funding for the ‘Office of the FAIS Ombud’ and the ‘Office of the PFA’ on the basis of approved budgets. The Offices were part of the same regulatory framework within which the FSB operated, but functioned independently of the FSB, as their sole mandate was to dispose of complaints lodged by consumers of financial services in terms of their respective Acts.

The Executive Officer was also the Registrar of Non-banking Financial Institutions. There were four Deputy Executive Officers responsible for supervision of the various industries, namely Financial Advisory and Intermediary Services, Retirement Funds and Friendly Societies, and Insurance and Investment Institutions.

Failures and mismanagement

The FSB was unable to prevent a number of significant scandals and disasters in South Africa's pension funds industry. It was also accused of favouritism and overcharging for legal and administrative services. [3] Some of its interactions with financial service providers have been described as harsh and bizarre, which led to criticism from the press as well as the financial services industry. In a report released in March 2019, the Public Protector, Busisiwe Mkhwebane, castigated the FSB's officials for a variety of failures spanning more than a decade. The FSCA, successor to the FSB, countered however that the report was "riddled with inaccuracies". [3]

See also

Related Research Articles

<span class="mw-page-title-main">Banking regulation and supervision</span> Policy framework for credit institutions

Banking regulation and supervision refers to a form of financial regulation which subjects banks to certain requirements, restrictions and guidelines, enforced by a financial regulatory authority generally referred to as banking supervisor, with semantic variations across jurisdictions. By and large, banking regulation and supervision aims at ensuring that banks are safe and sound and at fostering market transparency between banks and the individuals and corporations with whom they conduct business.

<span class="mw-page-title-main">Reserve Bank of Fiji</span> Central Bank of Fiji

The Reserve Bank of Fiji is the central bank of the Pacific island country of Fiji. Its responsibilities include the issue of currency, control of the money supply, currency exchange, monetary stability, promotion of sound finances, and fostering economic development.

<span class="mw-page-title-main">International Organization of Securities Commissions</span> International financial regulatory body

The International Organization of Securities Commissions (IOSCO) is an association of organizations that regulate the world's securities and futures markets. Members are typically primary securities and/or futures regulators in a national jurisdiction or the main financial regulator from each country. Its mandate is to:

Australia's insurance market can be divided into roughly three components: life insurance, general insurance and health insurance. These markets are fairly distinct, with most larger insurers focusing on only one type, although in recent times several of these companies have broadened their scope into more general financial services, and have faced competition from banks and subsidiaries of foreign financial conglomerates. With services such as disability insurance, income protection and even funeral insurance, these insurance giants are stepping in to fill the gap where people may have otherwise been in need of a personal or signature loan from their financial institution.

The Netherlands Authority for the Financial Markets is the financial services regulatory authority for the Netherlands. Its role is comparable to the role of the SEC in the United States.

<span class="mw-page-title-main">European Insurance and Occupational Pensions Authority</span>

The European Insurance and Occupational Pensions Authority (EIOPA) is a European Union financial regulatory agency. It was established in 2011 under EU Regulation 1094/2010.

A securities commission, securities regulator or capital market authority is a government department or agency responsible for financial regulation of securities products within a particular country. Its powers and responsibilities vary greatly from country to country, but generally cover the setting of rules as well as enforcing them for financial intermediaries and stock exchanges.

<span class="mw-page-title-main">National Securities Market Commission</span> Body responsible for supervision of Spanish securities markets

The National Securities Market Commission (CNMV) is the Spanish government agency responsible for the financial regulation of the securities markets in Spain. It is an independent agency that falls under the Ministry of Economy.

<span class="mw-page-title-main">Belgian Banking Commission</span> Belgian financial supervisory authority

The Belgian Banking Commission was a Belgian financial supervisory authority created in 1935 in the aftermath of the financial turmoil of the early 1930s. It was later renamed CBF in 1990, then CBFA in 2004.

<span class="mw-page-title-main">Financial Conduct Authority</span> British financial regulator

The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom. It operates independently of the UK Government and is financed by charging fees to members of the financial services industry. The FCA regulates financial firms providing services to consumers and maintains the integrity of the financial markets in the United Kingdom.

The Prudential Regulation Authority (PRA) is a United Kingdom financial services regulatory body, formed as one of the successors to the Financial Services Authority (FSA). The authority is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms. It sets standards and supervises financial institutions at the level of the individual firm. Although it was initially structured as a limited company wholly owned by the Bank of England, the PRA's functions have now been taken over by the Bank and are exercised through the Prudential Regulation Committee. The company has since been liquidated.

Financial Stability and Development Council (FSDC) is an apex-level body constituted by the government of India. The idea to create such a super regulatory body was first mooted by the Raghuram Rajan Committee in 2008. Finally in 2010, the then Finance Minister of India, Pranab Mukherjee, decided to set up such an autonomous body dealing with macro prudential and financial regularities in the entire financial sector of India. An apex-level FSDC is not a statutory body. The recent global economic meltdown has put pressure on governments and institutions across the globe to regulate their economic assets. This council is seen as India's initiative to be better conditioned to prevent such incidents in future. The new body envisages to strengthen and institutionalise the mechanism of maintaining financial stability, financial sector development, inter-regulatory coordination along with monitoring macro-prudential regulation' of economy. No funds are separately allocated to the council for undertaking its activities. Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman chaired the 26th meeting of the Financial Stability and Development Council (FSDC) on September 15, 2022.

<span class="mw-page-title-main">European Banking Authority</span> Agency of the European Union

The European Banking Authority (EBA) is a regulatory agency of the European Union headquartered in La Défense, Île-de-France. Its activities include conducting stress tests on European banks to increase transparency in the European financial system and identifying weaknesses in banks' capital structures.

Financial regulation in Australia is extensive and detailed.

A systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution whose failure might trigger a financial crisis. They are colloquially referred to as "too big to fail".

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous and statutory body under the jurisdiction of Ministry of Finance, Government of India. It is tasked with regulating and licensing the insurance and re-insurance industries in India. It was constituted by the Insurance Regulatory and Development Authority Act, 1999, an Act of Parliament passed by the Government of India. The agency's headquarters are in Hyderabad, Telangana, where it moved from Delhi in 2001.

A financial regulatory authority or financial supervisory authority is a public authority whose role is to ensure the proper implementation of financial regulation within its scope of responsibility.

Banking in South Africa is centred on the South African Reserve Bank (SARB), which is the monetary authority and controls gold and foreign exchange reserves.

<span class="mw-page-title-main">Financial Market Authority (Austria)</span> Austrian financial regulator

The Austrian Financial Market Authority is Austria's integrated financial regulatory authority and has been its national competent authority within European Banking Supervision since 2014. It is responsible for the supervision of credit institutions, payment institutions, insurance companies, pension funds, Fund managers, licensed securities service providers, and stock exchanges.

Financial regulation in India is governed by a number of regulatory bodies. Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled by either a government or non-government organization. Financial regulation has also influenced the structure of banking sectors by increasing the variety of financial products available. Financial regulation forms one of three legal categories which constitutes the content of financial law, the other two being market practices and case law.

References

  1. ↑ Annual Report 2009 [ permanent dead link ]
  2. ↑ "FSB has changed to the FSCA". fanews.co.za. FANews. 2018-04-05. Retrieved 6 April 2019.
  3. 1 2 3 Cohen, Tim (5 April 2019). "Public Protector tears into Financial Services Board and former boss Dube Tshidi, vindicating EFF's Julius Malema". msn.com. Daily Maverick. Retrieved 6 April 2019.
  4. ↑ Strategic Plan 08 [ permanent dead link ]
  5. ↑ "FSCA About Us Page".
  6. ↑ "FSB to FSCA".
  7. ↑ Welcome to the FSB
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.