Skip Ribbon Commands
Skip to main content
Prudential Authority
 
 
     
 

Frequently asked questions 

  • What is the Financial Sector Regulation Act?

    ​The Twin Peaks model for financial sector regulation was proposed as a means to reform the regulatory and supervisory system in so far as it related to financial institutions. In June 2011, Cabinet approved the move towards the model which resulted in the drafting of the Financial Sector Regulation Act (FSRA). The overall objective of the model is to create a complete and comprehensive system that ensures protection and a better outcome for financial customers, a streamlined system of licensing, regulation, supervision, enforcement and customer focus, delegated authorities with clear specialities i.e. prudential regulation and conduct regulation and greater co-operation and co-ordination between the regulators in the financial sector. The FSRA lays the foundation and architecture of the model and was signed into law on 21 August 2017.
  • How does it change the work of the SARB?

    The PA is responsible for assisting the South African Reserve Bank (SARB) in maintaining financial stability, co-operating and collaborating with other regulators and the SARB, making regulatory instruments (prudential standards and joint standards), conducting information gathering, supervisory onsite inspections and investigations, taking enforcement action (directives, leniency agreements, enforceable undertakings etc), issue administrative penalties, regulating significant owners of financial institutions and regulating and supervising financial conglomerates. With effect from 1 April 2018 when the PA is established, the existing Bank Supervision Department of the SARB will cease to exist. The resultant PA will consist of the following four departments: •the Financial Conglomerate Supervision Department; •the Banking, Insurance and Financial Market Infrastructures Supervision Department; •the Risk Support Department; and •the Policy, Statistics and Industry Support Department.
  • What is the relationship between the PA and the SARB?

    The PA will be a juristic person operating within the administration of the SARB. It will not be a public entity in terms of the Public Finance Management Act 1 of 1999. The PA will be headed by a Chief Executive Officer (CEO) who must be a Deputy Governor of the SARB but not the Deputy Governor responsible for financial stability. The CEO’s term of office will be five years and will be eligible for reappointment for one further term. The PA will be governed by the Prudential Committee, which will consist of the Governor of the SARB, the CEO of the PA, and the Deputy Governors of the SARB. The Prudential Committee will be mandated to oversee the management and administration of the PA to ensure that it is efficient and effective.
  • Who will the PA regulate from the 1st of April?

    ​The PA will be responsible for the prudential supervision of banks, insurers, financial conglomerates and certain market infrastructures and for ensuring that these institutions are managed safely and soundly.
  • How will the implementation of the FSRA change the lives of South African citizens?

    ​While, in general, South Africa has a modern and prudent financial sector that has the interests of all customers and citizens at heart, there are too many cases of abuse and exploitation in the sector and the risks that the sector poses to the economy is still immense. Effective regulation will help make the financial sector more responsive to the needs of all South Africans.
 
 
 
     
 
 
Sign In
Prudential Authority Help (new window)