COFI Bill Update Chantal Manson - PowerPoint Presentation

Slide1

COFI Bill Update

Chantal Manson

Liberty Group

July 2019

AGENDA

UPDATE FOR RETIREMENT FUND INDUSTRY

1

Approach to licensing Independent/Professional Trustees

2

Sponsors and Employers

3

Who is ultimately accountable to the members of the fund under COFI?

4

Transformation

5

6

Regulatory uncertainty

Next steps

FINANCIAL SECTOR REGULATIONS ACT (01/04/18)

PRUDENTIAL

MARKET & BUSINESS CONDUCT

Regulatory

instruments

Standards

Guidance Notes

Interpretation Notes

Supervisory tools

Supervisory tools

Inspection

Investigations

Administrative

Action

Directives

Enforceable undertakings

Debarment

PA

Financial Institution Facing

FSCA

Governance

Issue product

Sales & distribution

Advice

Disclosures

Post sales

Outsourcing

Claims & complaints

Regulatory Architecture

Regulator Facing

What is COFI all about

New legal framework

Streamlines the legal landscape

for conduct regulation in the financial sector and gives legislative effect to the market conduct policy approach.

Will

strengthen customer protection by putting in place a

single comprehensive market conduct law in the financial sector, resulting in the consistent application of consumer protection principles across the sector.

Gives more flexibility and better tools to the regulator to support emerging new financial institutions.

Gives legal effect to transformation and inclusion requirements

in support of targets agreed through the Financial Sector Transformation Council and specified in the Financial Sector Code.Support

competition and innovation

Approach to licensing Independent/Professional Trustee

No support for this proposal

Unclear what exactly is the intention with this proposal

Sponsors & Employers

Who is accountable to the members of the fund?

Accountability of

different financial institutions

in value chain – retirement fund, insurer, CIS?

Chapter4 Advice and distribution by another FI eg: PFA Default Regulations which allows a member the option to opt out, and the Fund doesn't even know if member is obtaining advice.

Complaints – s13B administrator, insurer or retirement fund?Product Desig

n – occupational funds - benefits provided for in the fund rules is dictated by what is contained in the employment contract (eg

: % of contributions, multiple of approved risk cover).

COFI needs to be clear as to what applies to whom and who has the primary obligation - especially for members and who the member must approach for what

The board is ultimately responsible to the members of their funds.

However, legal certainty required under COFI

Principles are created in Bill and the different layer in putting into practice will be dealt with through the standardsDepends on the particular

circumstanceThe context and reasonability needs to be considered in each situation.

Transformation

Regulatory uncertainty

Which sections of the PFA are best placed under COFI and will be required to migrate to a conduct standard?

Next Steps

Working through submissions (over 800 pages) - anticipated Bill will be subject to revisions based on public consultation process

More urgent pressing changes will happen in the interim through conduct standards

NT still hoping for the Bill to be presented to Cabinet this year

There will be further consultation on COFI and retirement funds

COFI Bill is part of the broader strengthening of market conduct in SA (other initiatives include i) Reform of

ombuds

system ii) consumer financial education iii) retail banking)

THANK YOU