FSR Act
Financial Sector Regulation Act
Establishes the Twin Peaks model of financial sector regulation, separating prudential supervision (Prudential Authority) from market conduct supervision (FSCA), and creates the Financial Sector Conduct Authority, Prudential Authority, and Financial Sector Tribunal.
Sections
3
Duties
3
Questions
4
Assessment from
R 90 000
What it covers
The Financial Sector Regulation Act 9 of 2017 (FSR Act) restructured South Africa's financial regulatory architecture into the 'Twin Peaks' model. It established the Prudential Authority (operating within the South African Reserve Bank, responsible for the safety and soundness of financial institutions) and converted the former Financial Services Board into the Financial Sector Conduct Authority (FSCA, responsible for market conduct — how financial institutions treat their customers). The Act also created the Financial Sector Tribunal to hear reconsideration applications against decisions of the regulators, the Financial System Council of Regulators for coordination across regulators, and an Ombud Council overseeing the various financial sector ombud schemes. The FSR Act gives both the Prudential Authority and FSCA the power to issue binding 'conduct standards' and 'prudential standards' that apply across financial institutions, supplementing sector-specific legislation. It requires every financial institution licensed under any 'specific financial sector law' (Banks Act, Insurance Act, FAIS Act, Pension Funds Act, CISCA, etc.) to comply with applicable conduct standards, pay supervisory levies to fund the regulators' operations, and submit to the regulators' information-gathering, inspection, and enforcement powers including significant financial penalties for systemic conduct or prudential failures. The Act introduced the Financial Sector Levies Act framework for calculating and collecting these levies based on the institution's size and risk profile.
Does this apply to you?
It applies if
- Your organisation holds a licence or registration under any specific financial sector law (Banks Act, Insurance Act, FAIS Act, Pension Funds Act, CISCA, FMA, NPSA, FICA-designated accountable institution status)
- Your organisation is therefore automatically subject to applicable Prudential Authority and/or FSCA conduct and prudential standards issued under the FSR Act, in addition to its sector-specific legislation
- Your organisation is liable for annual supervisory levies calculated under the Financial Sector Levies framework based on size, licence type, and risk profile
Thresholds that change what's required
- Levy amounts scale with the institution's size and the specific levy formula applicable to its licence category, set out in the annual Financial Sector Levies determination
Exemptions
- Entities not licensed or registered under any specific financial sector law generally fall outside FSR Act direct application, though this should be confirmed given the broad definition of 'financial institution' under the Act
What non-compliance costs
Maximum fine
R 50 000 000
Imprisonment
FSR Act enforcement is principally administrative; underlying sector-specific legislation (Banks Act, Insurance Act, FAIS Act) carries separate criminal penalties including imprisonment for specific offences
Civil exposure
The Prudential Authority and FSCA may impose administrative penalties, debarment of individuals, and directives requiring specific remedial action; affected clients retain civil claim rights under sector-specific legislation and the Ombud framework
Reputational
FSR Act enforcement actions by either regulator are published; the Twin Peaks structure means a conduct failure can trigger FSCA action while a related prudential weakness simultaneously draws Prudential Authority scrutiny, compounding regulatory and reputational exposure
What the assessment covers
The assessment works through 4 questions across 3 duties, scored out of 41. Each answer generates the specific actions needed to close or prove that duty — and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on FSR Act
Run the assessment, get your score, and get the exact list of what to fix — with the evidence trail an auditor will ask for.