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The official Financial Regulation Journal of SAIFM

The FSCA is working on reforming legislation ahead of the anticipated COFI Bill

Jessica Blumenthal and Talia Cullinan

The Financial Sector Conduct Authority (“FSCA”) is planning several aspects of regulatory reform related to the Conduct of Financial Institutions Bill, 2020 (“COFI Bill”). The COFI Bill intends to address regulatory arbitrage and ensure that fair customer treatment by all providers of financial instruments, services and products.

On 1 July 2022, the FSCA published its regulation plan for the next three years (1 April 2022 to 31 March 2025), providing further insight into the FSCA’s intended strategy to reform certain financial sector laws.  

The regulation plan does not provide an estimate date by which the long-anticipated COFI Bill will be enacted, nor confirm whether we can expect a third draft, but it has re-affirmed that work related to the COFI Bill remains a critical and high priority to the FSCA.

According to the regulation plan, the FSCA is developing a conduct regulatory framework to be implemented under the COFI Bill, once the COFI Bill is enacted. This framework is preparatory and will ensure that the FSCA can facilitate a smooth and effective transition into the new regulatory regime once the COFI Bill is enacted.

This development is made up of three phases, all of which will be progressed concurrently:

  1. High-level design of the regulatory framework: during this phase, the FSCA will consider the overall design of the regulatory framework to be implemented under the COFI Bill. This includes the role of regulatory instruments to be published to support the framework, for example, conduct standards and how they should be grouped, numbered, and positioned.
  2. Harmonisation of the regulatory frameworks: this phase has already commenced and entails the identification of key conduct themes. With reference to these themes, the FSCA will develop cross-sector conduct standards applicable to the financial industry, regardless of the type of institution or activity rendered. Where necessary, further sector-specific conduct standards may be issued to supplement the general conduct standards. The FSCA intends to avoid fragmented supervision, regulatory arbitrage, and inconsistent customer outcomes across the financial sector.
  3. Transition to the COFI Bill framework: this phase will focus on transitioning existing subordinate legislation (which has been published under sectoral laws that may be repealed by the COFI Bill) into the COFI Bill framework. The FSCA intends to embrace the cross-sector and activity-based approach underpinned by the COFI Bill and accordingly, existing subordinate legislation will need to be harmonised to fit into the COFI Bill framework.

Work on the harmonisation of existing financial sector laws and regulatory frameworks is set to continue throughout 2022, with consultation on draft regulatory instruments anticipated during 2023. This will be followed by the transition process, which is expected to take multiple years to complete. The FSCA has indicated its intention to establish industry reference groups to facilitate consultation and discussion.

While the COFI era slowly pulls into focus and the FSCA gears up in preparation for the COFI Bill’s enactment, all financial sector participants will need to prepare to face the upcoming legislative change necessary to effect regulatory reform, including those who will enter the regulated space for the first time as the COFI Bill establishes the new regulatory perimeter.

The Regulatory Framework illustrates how the FSCA will focus on conduct regulation, while this is not set in stone, it is a helpful tool. For a summary of the critical conduct regulations subject to reform, please click here and for the full proposal please consult the regulatory framework available here.

This article was first published by ENSafrica ( on 5 July 2022.

No information provided herein may in any way be construed as legal advice from ENSafrica and/or any of its personnel. Professional advice must be sought from ENSafrica before any action is taken based on the information provided herein, and consent must be obtained from ENSafrica before the information provided herein is reproduced in any way. ENSafrica disclaims any responsibility for positions taken without due consultation and/or information reproduced without due consent, and no person shall have any claim of any nature whatsoever arising out of, or in connection with, the information provided herein against ENSafrica and/or any of its personnel. Any values, such as currency (and their indicators), and/or dates provided herein are indicative and for information purposes only, and ENSafrica does not warrant the correctness, completeness or accuracy of the information provided herein in any way.

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