Is the FSB a toothless watchdog?
Numerous disasters — such as Steinhoff, and the collapse of VBS Mutual Bank, which has imperilled funds for orphans — have placed the Financial Services Board under an unforgiving spotlight. It can hardly afford this, at a time when regulators are sucking out more and more in fees
The Financial Services Board (FSB) has not had a great start to the year, leading to some tricky questions about its effectiveness in carrying out its mandate: to regulate all financial services companies other than banks. On the face of it, the organisation’s mandate is to "ensure consumers of financial services are treated fairly" and that SA enjoys a "safe investment environment". But the mounting scandals at pension funds and companies like Steinhoff and VBS Mutual Bank have raised awkward questions about whether the FSB is failing as the first line of defence for consumers and investors. It’s a question that has been thrown into stark relief as the FSB is now being relaunched as the Financial Sector Conduct Authority (FSCA), tasked with policing market conduct. The FSCA, together with the Prudential Authority, which came into being on April 1, will form the two prongs of the new Twin Peaks model, under which the entire finance sector (including banks) will be regulated. It’s a ...
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