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years; the intended key outcomes of the strategy;
guiding principles and matters that the FSCA should
have regard to when performing its functions; its
approach to administrative actions, as well as how
it will give effect to requirements of openness to
consultation, accountability, and consistency with
relevant international standards.
3. RETAIL DISTRIBUTION REVIEW
(RDR)
The FSB initially released a discussion paper outlining
the Retail Distribution Review (RDR) in 2014.
The newly formed FSCA published a further update
on the status of the original RDR proposals during
June 2018. The FSCA again reiterated that the RDR
proposals will be implemented using an appropriate
combination of instruments under existing financial
sector laws and standards under the Financial Sector
Regulation Act (2017), as well as the planned future
Conduct of Financial Institutions (COFI) Act.
During July 2018 the FSCA also published the
‘Retail Distribution review: Discussion Document
on Investment Related Matters’. The purpose of
the discussion document was to elicit stakeholder
input on possible regulatory measures to define the
activity of investment management and consider
the extent to which investment management needs
to be demarcated from other forms of discretionary
investment mandate; clarify the nature of the legal
and business relationships between different types of
discretionary investment mandate holders, collective
investment scheme management companies and
investment advisors; and to provide for fee and
remuneration arrangements to conform to the
RDR approach of aligning remuneration with actual
activities performed and avoiding unnecessary
duplication of costs for the end investor.
4. MARKET CONDUCT TREATING
CUSTOMERS FAIRLY (TCF)
The FSCA’s predecessor, the FSB, first launched
its outcomes-based customer protection initiative,
Treating Customers Fairly (TCF), with the publication
of its TCF Roadmap during March 2011. TCF is a
regulatory and supervisory approach that seeks
to ensure that financial institutions deliver specific,
clearly articulated fairness outcomes for financial
services customers throughout the financial product
lifecycle.
The Financial Sector Regulation (FSR) Act (2017)
formally entrenched the TCF approach in the
legislative framework by giving the FSCA an explicit
objective to promote fair treatment of financial
customers by financial institutions and empowering
it to make conduct standards aimed at ensuring that
this is achieved.
The FSCA confirmed in its Regulatory Strategy
document, published during October 2018, that it will
continue to work closely with National Treasury, the
PA and other stakeholders to shape the next phase of
the legislative framework. The main instrument which
will facilitate TCF implementation is the expected
Conduct of Financial Institutions (COFI) Act which will
comprise a number of chapters specifically focused on
ensuring financial institutions deliver TCF outcomes
for their customers and will empower the FSCA to
make conduct standards to reinforce this objective.
It will, however, still be some time before the COFI
Act comes into operation and current indications are
that it will only be tabled in Parliament during 2019.
Given this, the FSCA has confirmed that its medium-
term strategy to deliver on its mandate to promote
fair customer treatment is to adopt an incremental
approach to working towards an overarching conduct
of business framework that promotes TCF outcomes.
This incremental approach entails, among others,
the following:
• Embedding TCF in existing regulatory frameworks
or through conduct standards under the FSR Act.
• Continuing to prioritise a number of key TCF-
aligned regulatory projects.
• Embedding TCF in the FSCA’s supervisory and
enforcement frameworks.
PPS always strives to treat all its clients fairly. Because
PPS operates on the ethos of mutuality, with no
outside stakeholders or shareholders, it has an added
advantage of not having to consider outside parties’
interests in its dealings with clients. PPS always
ensures that it does not only act in the interest of a
single client, but that it also considers the interests of
its broader client base, and where appropriate take
steps to redress client interests.