From CompliNEWS | Financial Services Intelligence Watch

COFI is steadily moving from the discussion phase into practical reality, and many firms are still underestimating just how significant the shift will be.

One of the most important themes emerging from the draft framework is that regulation will increasingly focus on activities and customer outcomes rather than simply the type of licence a business holds. In simple terms, regulators are becoming less interested in what a firm calls itself and more interested in what it actually does in practice.

As highlighted recently in a useful overview by Webber Wentzel, COFI aims to replace the fragmented conduct landscape with a more harmonised, principles-based framework built around fairness, transparency, governance and customer treatment.

For many institutions, particularly smaller or specialised firms, the uncertainty does not necessarily lie in the high-level principles themselves, but rather in how concepts such as proportionality, governance expectations and activity-based licensing will ultimately be applied in practice.

There is also growing recognition that COFI may expand regulatory reach into areas that historically operated with lighter conduct oversight. Businesses that previously sat comfortably outside the traditional FAIS environment may therefore need to reassess their future licensing, governance and compliance obligations.

The direction of travel is nevertheless becoming clear. Regulators are moving toward a model where firms will increasingly need to demonstrate:

• evidence of fair customer outcomes;
• active governance oversight;
• operational conduct management;
• a culture of compliance beyond policy documents alone. 

While implementation will occur over time, firms that start mapping their activities, governance structures and conduct risks now are likely to be in a far stronger position once the framework formally comes into effect.

Read the Webber Wentzel article here

FA News reports that South Africa’s financial advice industry is moving steadily toward a far more outcomes-driven regulatory environment as the Conduct of Financial Institutions (COFI) Bill approaches implementation. Speaking to FA News, Old Mutual Personal Finance Advice Manager Keith Peter noted that compliance can no longer be treated as a simple ‘tick-box’ exercise focused purely on licence preservation, but rather as a core component of sustainable advice delivery, customer protection and professional accountability. The article highlights the FSCA’s growing focus on risk management maturity, customer outcomes, suitability of advice and the quality of advice records, with regulators increasingly expected to assess firms on how effectively they deliver fair outcomes in practice rather than merely whether policies exist on paper.

Read the Full FA News report here