Twin Peaks: South Africa's Financial Sector Regulatory Framework
South African Law Journal, Vol. 134, No. 3, p. 665-702, 2017
42 Pages Posted: 6 Dec 2017 Last revised: 11 Mar 2018
Date Written: November 30, 2017
The National Assembly of South Africa has passed a Bill adopting the ‘twin-peaks’ model of financial regulation, which sees regulation split into two broad functions: market conduct regulation and prudential regulation. This article compares the structure of the twin-peaks model in South Africa with the structure in other jurisdictions. In doing so, it identifies the strengths and possible weaknesses of the model in South Africa, and the extent to which it reflects international experience. The evolution of the legislation reveals that South Africa has drawn increasingly on the international experience, particularly the experience in the UK. However, it also reveals characteristics that might be regarded as unique to South Africa. Two areas are particularly noteworthy in this regard. First, the regulatory framework attempts to achieve a balance between the need to ensure operational independence on the part of the regulators, and the need to recognise the role and involvement of the executive government. Second, by comparison with the international experience (even that in the UK) the design of the regulatory co-ordination framework appears to involve a high level of potential overlap between the co-ordinating bodies, and also a highly prescriptive approach to achieving effective co-ordination.
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