Twin Peaks: policing the market
The new Twin Peaks regulatory regime will cost companies — and by extension, consumers and investors — R6bn/year. Given the FSB’s poor record, is this money well spent?
A new regulatory regime is in place to govern all SA’s finance companies, including banks – but it will come with a hefty price tag of R6bn/year. The Twin Peaks system is now law, which means all financial companies will be governed either by the Reserve Bank’s Prudential Authority, which began operating this week, or the Financial Sector Conduct Authority (FSCA), which replaced the Financial Services Board (FSB) on April 1. The problem is, the exorbitant costs these companies must now pay for compliance and regulation will inevitably get passed on to the investor and consumer, leading to soaring costs across the board. As it stands, the four big banks — Absa, Standard Bank, FirstRand and Nedbank — can expect to pay R416m, using 2017’s figures. This includes R311m to the Prudential Authority and R105m to the FSCA. Each life insurance company will pay collective maximum fees of R40m to both regulators. Dube Tshidi, the executive officer of the FSB, says the regulator expects levies o...
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