Guiding consumers since 2009

Publication update on Twin Peaks

By Danielle van Wyk

Last week National Treasury released two new documents on government’s financial sector regulation (FSR) programme.

The FSR bill, otherwise known as Twin Peaks, is set to be tabled before Parliament on 16 August when the legislature resumes. National Treasury has also weighed in, as they released their response to Parliament, subsequent to public commentary. A further draft or extension of the bill has also been published to allow for comments to be submitted.

In addition to the Twin Peaks bill extensions, Treasury published amendments to the Financial Markets Act (FMA).

This was owed to the need to advance South Africa’s commitment to the G20 obligations to make “financial markets safer and better regulate over the counter derivatives markets.”

The bill, which was first subject to comment in December 2013 and then a revised version in December 2014, has sparked major controversy.

What is Twin Peaks?

The new regulation “aims to establish a new prudential regulator under the helm of the Reserve Bank that will be responsible for regulating all financial institutions – banks, insurance houses and the asset management sector. Currently the Financial Services Board is overseeing the conduct of insurance houses and asset managers, but in future the body will be tasked with regulating market conduct and protecting consumers,” reported Fin24.

This is said to be Treasury’s way of stabilising the economy and increasing consumer protection while regulating market behaviours.

But some remain convinced that Twin Peaks will provide no more protection than what exists under current legislation.

“All the necessary laws and regulatory facilities already exist within the purview and under the aegis of a single regulator, the FSB. The FSRB however, spectacularly increases bureaucrats’ powers to make laws without the oversight or rigour of Parliament. Moreover, it introduces a sense of schizophrenia into our legislation by demanding that one industry should now serve two masters, with each one being kept in sync by yet a third new bureaucratic body. In addition, it is so designed as to massively increase costs for all South African consumers,” added Free Market Foundation’s
Chris Hattingh.

The peaks which are said to be based on the ideas of ‘prudential regulation’ and ‘conduct regulation’ raises concern, explained Hattingh. “Here government officials intend grabbing untrammelled powers to set “standards” by which banks and insurers will be instructed as to what products they should provide, how to design them, how much to charge for them, how to advertise and sell them, who may sell them, what to pay for such distribution, who may buy them and what benefits and provisions should and should not be included.”

The Bill also fails to detail the focus or ‘objective criteria’ for ‘conduct regulation’ and therefore could be viewed as the bulldozing of Parliament into authorising the unknown.

A Wits professor estimated the initial cost to be around R4.8 billion per year. This would be as a result of permissible interference in private banks and insurers to maintain a desired level of market activity.

“With Twin Peaks South Africa will be importing rapidly failing regulation that is still experimental in the UK and now under ‘Brexit’ review,” stated Hattingh.

Furthermore, Hattingh, like others, has expressed the opinion that the Bill should be returned to Treasury for consideration.

“This intricate and complex piece of legislation is riddled with flaws and obvious unintended consequences. It should be returned to Treasury immediately with an instruction to resubmit it according to stated Cabinet policy with a properly conducted, independent Social and Economic Impact Assessment (SEIA). Without that Parliament is in no position to consider this Bill,” Hattingh said.

Treasury remains confident that this is a positive step in the right direction for the financial wellbeing of the country.

The public is encouraged to email their comments on the proposed FSR regulation to Ms Petula Sihlali at with the subject title ‘FMA: Ministerial Regulations (Round 3)’. The deadline for submission is 31 August 2016.

Recent Articles

Featured Get personal with your finances – and tie the knot

As time passes, your financial products may not live up to your needs. Therefore, it’s important to take stock of what you’re paying for and adjust where necessary. We got in touch with financial advisers to find out how you can get your finances in order, and what you should do to ensure you’re financially stable.

Personal loan or business loan? The best way to finance your business

When starting your own business, you may have to rely on external funding. Perhaps you qualify for a personal loan, but would it be better to take out a business loan instead? We got in touch with a specialist to find out whether it’s best to take out a business loan or a personal loan to assist you with your ongoing business or start-up.

What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?

Best travel cards offered by top South African banks

Planning a trip abroad involves a lot of administration. You need to consider travelling arrangements, reasonable accommodation, and a daily itinerary. But have you considered how you’re going to pay your bills once you arrive? Besides considering bank costs, you also need to consider exchange rates.


Takealot January Big Sale

Price: Available on request
When: Until 31 January 2020
Where: Online

Annique Restore Package Special

Price: From R600
When: Until 31 January 2020
Where: Centurion

Ster-Kinekor Senior Citizens Discount

Price: Available on request
When: Daily
Where: Nationwide