From CompliNEWS | Financial Service Intelligence Watch
FSCA eyes contingency as COFI Bill progress slows
The Financial Sector Conduct Authority (FSCA) is preparing contingency measures as delays in the enactment of the long-anticipated Conduct of Financial Institutions (COFI) Bill persist. Although National Treasury has indicated the Bill will reach Cabinet ‘soon’, the FSCA is not waiting idly. Commissioner Unathi Kamlana reiterated at the 2025 FSCA Industry Conference that COFI represents the future of conduct regulation in South Africa and urged financial institutions to align their governance models, compliance strategies, and business practices accordingly. The Bill, currently under review by the Chief State Law Adviser, is designed to consolidate and harmonise South Africa’s fragmented conduct laws under one principles-based, outcomes-focused framework. If passed, COFI will repeal and replace several cornerstone Acts, including FAIS, and extend the FSCA’s oversight to public sector retirement funds.
Despite its potential, the FSCA recognises that delays could persist, prompting the regulator to initiate a phased, theme-based framework using existing legal instruments like the Financial Sector Regulation Act (FSRA). Eugene du Toit, head of regulatory frameworks at the FSCA, explained that if COFI remains stalled, formal consultations will proceed under the FSRA. These interim standards will focus on key themes like governance, advertising, risk management, and disclosure — aiming to ensure consistency and avoid regulatory arbitrage across sectors. The FSCA has already started informal stakeholder engagements on ‘fit and proper’ standards and will consult on further frameworks in 2025. While acknowledging some fragmentation may occur, Du Toit emphasised that the core objective — achieving harmonised conduct regulation — will remain intact.
Meanwhile, the FSCA’s licensing department is preparing for what it calls a ‘mammoth task’. With over 12 500 FSPs to migrate to the COFI regime, the transition will be far more complex than previous licensing changes. Licensing head Diketso Mashigo noted that mapping existing licence categories to COFI’s activity-based framework is already underway, alongside a full review of forms and internal structures. Deputy Commissioner Katherine Gibson confirmed that the FSCA will adopt a phased migration plan, to be developed in consultation with industry. Du Toit closed the session by urging stakeholders to participate actively in shaping the COFI framework. He acknowledged the burden of legislative change but stressed that long-term regulatory maturity and stability will depend on collaborative, industry-led engagement.