South Africa’s Government has released the Financial Markets Bill for public comment, with comments due by 5 September. The new law would replace the Securities Services Act (No 36 of 2004) which took effect on 1 February 2005.
South Africa is committed to a global regulatory reform agenda after the global financial crisis, according to a Government press release. This means a stronger regulatory framework, more effective supervision, improved crisis resolution, and enhanced accountability through international assessments and peer reviews for the financial sector, including financial markets.
The Financial Markets Bill includes:
• Strengthening the self-regulatory organisation model of supervision (which has proven efficient and effective in delivering on the objectives of securities regulation)
• Aligning financial markets regulation with international best practice
• Giving effect to recommendations made by the 2008 World Bank and International Monetary Fund Financial Sector Assessment Programme
• Implementing South Africa’s commitment to the UNIDROIT Convention to improve investor protection in cross-border transactions
• Ensuring alignment between legislation that governs financial markets and the wider legislative framework, including the new Companies Act and the Consumer Protection Act
The 2004 Act governs the regulation of securities services including securities exchanges, central securities depositories, clearing houses, and their respective members. It consolidated the South African regulatory framework for capital markets and aligned the regulation and supervision of South African financial markets with the prevailing international developments and regulatory standards.
After consultation the Bill will be tabled in Parliament and is expected to be implemented in 2012. The Bill and accompanying documents are available on the National Treasury and Financial Services Board websites. Draft subordinate regulation to be issued in terms of the Bill will also shortly be released for public comment. An FSB policy document is available here.