SA’s financial services sector is set for the biggest regulatory shake-up since the 1980s. The Financial Sector Regulation Act, signed into law by President Jacob Zuma last week, heralds the advent of the Twin Peaks model that will see two main regulators emerge to preside over the financial system: the Prudential Regulator, which will form part of the Reserve Bank, and the Financial Sector Conduct Authority, into which the Financial Services Board (FSB) will evolve. The changes will cause big differences in the way insurance companies, asset managers, pension funds, stock brokers, banks and many other financial institutions are regulated. The signing into law of the regulators is the culmination of a long process that began before the financial crisis. But the battle is not over yet.The next front is on the funding of the new institutions, and that still has to be won. It is going to cost. There are two main issues in funding it: the cost of setting it up and a change in the way pa...

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