‘FSB needs more powers to stop bad behaviour’


PF IOL 17Nov FSB

PF

Illustration: Colin Daniel

Government intends to introduce “draconian” measures to stop the exploitation of consumers by badly behaved players in the financial services industry, Ismail Momoniat, National Treasury deputy director- general, says.

Momoniat gave notice of government’s intentions in the first briefing to Parliament’s finance portfolio committee this week about a wide range of changes to various laws, most of which are administered by the regulator, the Financial Services Board (FSB).

The amendments, contained in the omnibus Financial Services Laws General Amendment Bill, range from greater powers for the FSB to act against miscreants to bringing financial services legislation in line with the new Companies Act. Among other things, the legislation will give the FSB greater powers to impose regulations on the industry without reference to the Minister of Finance or Parliament and to take action against com-panies and individuals that it considers are placing consumers or the broader financial services industry at risk.

However, at the meeting this week, members of Parliament expressed concerns that too much power might be wielded by the FSB, allowing it to side-step the legislator by, in effect, making legislation by issuing regulations, then prosecuting any presumed offenders, and finally having the power to take judicial action against offenders.

But finance committee chairman Thabadiawa Mufamadi said he is committed to dealing with the legislation speedily. There are too many examples, particularly in the retirement and the insurance sectors, where the industry is not behaving properly, Mufamadi says.

Parliament needs to be seen to be doing something about abuses, in the interests of consumers, he says.

Momoniat says the legislation is urgently required and cannot wait for legislation that will establish the “twin peaks” regulatory structure, in terms of which prudential regulation and supervision of the financial services industry will fall under the Reserve Bank, and market conduct regulation and supervision of the industry under the FSB.

Some representatives of the financial services industry have already expressed opposition to aspects of the omnibus bill since its publication earlier this year, with warnings that it could have a significant impact on the industry.

Momoniat told the portfolio committee that there have been extensive discussions on the bill, and National Treasury would like interested parties to present evidence to the committee so that all views can be taken into account before the legislation is finalised.

He says much of the legislation is required in terms of international standards that have been introduced by the G20 group of developed countries to prevent a recurrence of the 2008 economic meltdown, which followed the sub-prime property lending crisis in the United States.

He says making legislation and regulators “much stronger, more intrusive and much tougher is in line with G20 commitments”.

Momoniat says the word “draconian” is used by the G20, although he did not apologise for using the word, too.

When challenged by members of parliament, the deputy director-general did, however, qualify “draconian” by saying the legislation will be “appropriately draconian”.

But, he says, the regulators require the additional powers so they can act “at the speed of light” when there are threats to the financial services industry or when “atrocious market conduct” leads to the exploitation of consumers.

Momoniat says the legislation will establish the FSB as the lead regulator over other regulators, such as the Council for Medical Schemes and the Department of Trade and Industry, and give precedence to FSB-administered legislation over other laws, such as the Consumer Protection Act.

Momoniat says the reason is that financial institutions need to be held to higher standards of consumer protection and market conduct, because the products sold by these institutions can have effects that are immediate or that can last for 70 or more years in the case of retirement savings products.

‘EXAMPLES ABOUND TO JUSTIFY TOUGHER LAWS’

There are plenty of examples to illustrate why the Financial Services Board (FSB), as the regulator of the financial services industry, needs additional powers, Ismail Momoniat, National Treasury deputy director-general, told Parliament this week.

He argued:

* Market conduct of the short-term insurance industry needs to be improved; the wording of and definitions in contractual documents for the entire financial services industry need to be standardised; and the ombuds system must be made more independent of the industry.

Momoniat says an example of what is wrong came with the way Rand Merchant Bank (RMB) and the industry had tried to intimidate the then Ombudsman for Short-term Insurance, Brian Martin, after he publicly warned consumers about an RMB Structured Products “comprehensive” motor vehicle policy that was anything but comprehensive. Your vehicle had to be “comprehensively” written off before RMB would pay. But policyholders’ understanding of the word “comprehensive” was that the insurance would cover them comprehensively, not that their vehicle had to be comprehensively destroyed.

Momoniat says Professor Robert Vivian, who has recently published articles criticising the Financial Services Laws General Amendment Bill, was part of the short-term insurance industry delegation that tried to intimidate Martin after he made his pronouncement. He says Vivian does not reveal in his articles that he has short-term insurance interests.

Momoniat also criticised RMB for not apologising for the product.

* Increased powers are needed for FSB inspection teams, to allow them to summon people and take possession of documentation, and to publish inspection reports when it is in the public interest to do so.

Momoniat also wants the FSB to be allowed to make on-site visits to unregulated entities that could be operating unlawfully.

(Recently, the FSB did not take pre-emptive action against asset manager, Herman Pretorius who ran a R1.8-billion Ponzi scheme, which has since collapsed, because the FSB said it was an unregulated product and did not have the powers to intervene. Pretorius fatally shot himself and an associate, Julian Williams, when the FSB did eventually take action.)

Momoniat says he is particularly concerned about how people such as J Arthur Brown in the Fidentia case and Simon Nash (executive chairman of appliance company Cadac) “abuse the legal system to delay their trials”, and also attempt to discredit the regulators in an effort to reduce the charges against themselves.

Momoniat says when false allegations are made against the FSB, the regulator should have the power to publish the information from inspection reports to allow it to dispel false claims and mis-information.

He did, however, concede that an initial draft of the legislation that would have prevented anyone from suing the FSB, whether it acted in good or bad faith, has been toned down. Aggrieved parties will be able to sue the FSB if they can show that it did not act with good intentions.


sign up
 
J_Tot
I'm a 30 year old woman looking to meet men between the ages of 30 and 40.
View Profile
MeltChocolate
I'm a 35 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Bonwel
I'm a 30 year old woman looking to meet men between the ages of 32 and 36.
View Profile
LolliCandy
I'm a 20 year old woman looking to meet men between the ages of 21 and 35.
View Profile
maria8022
I'm a 34 year old woman looking to meet men between the ages of 40 and 60.
View Profile
mako_001
I'm a 35 year old woman looking to meet men between the ages of 35 and 70.
View Profile
lulubaby
I'm a 33 year old woman looking to meet men between the ages of 30 and 70.
View Profile
Garnet3107
I'm a 44 year old woman looking to meet men between the ages of 35 and 45.
View Profile
curvalicious
I'm a 30 year old woman looking to meet men between the ages of 25 and 45.
View Profile
Baabbygirl
I'm a 27 year old woman looking to meet men between the ages of 27 and 36.
View Profile
tkay011
I'm a 23 year old woman looking to meet women between the ages of 25 and 45.
View Profile
Leematt
I'm a 25 year old woman looking to meet men between the ages of 25 and 29.
View Profile
FiftyshadesB
I'm a 40 year old woman looking to meet men between the ages of 32 and 45.
View Profile
DDeeZA
I'm a 45 year old woman looking to meet women between the ages of 19 and 50.
View Profile
hellena_596
I'm a 37 year old woman looking to meet men between the ages of 37 and 45.
View Profile
Noxy727
I'm a 27 year old woman looking to meet men between the ages of 30 and 36.
View Profile
mello_185
I'm a 26 year old woman looking to meet men between the ages of 25 and 60.
View Profile
xoxohayleyxoxo
I'm a 26 year old woman looking to meet men between the ages of 18 and 100.
View Profile
ChocLatte
I'm a 44 year old woman looking to meet men between the ages of 40 and 60.
View Profile
ME_JE
I'm a 43 year old woman looking to meet men between the ages of 35 and 50.
View Profile
TT200
I'm a 25 year old woman looking to meet men between the ages of 25 and 35.
View Profile
Blaq_chic
I'm a 26 year old woman looking to meet men between the ages of 25 and 45.
View Profile
Nola_505
I'm a 40 year old woman looking to meet men between the ages of 35 and 47.
View Profile
honeybee_036
I'm a 25 year old woman looking to meet men between the ages of 25 and 50.
View Profile
ProVoq
I'm a 43 year old woman looking to meet men between the ages of 50 and 70.
View Profile
PrincessEdelweiss
I'm a 43 year old woman looking to meet men between the ages of 35 and 50.
View Profile
fungi1971
I'm a 43 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Melone
I'm a 27 year old woman looking to meet men between the ages of 30 and 42.
View Profile
Dlodlolas75
I'm a 39 year old woman looking to meet men between the ages of 43 and 49.
View Profile
SexLips
I'm a 26 year old woman looking to meet men between the ages of 25 and 45.
View Profile
ranga322
I'm a 32 year old woman looking to meet men between the ages of 31 and 40.
View Profile
MASESHIA
I'm a 28 year old woman looking to meet men between the ages of 27 and 40.
View Profile
Casiopiea40
I'm a 44 year old woman looking to meet men between the ages of 35 and 50.
View Profile
Yahoo
I'm a 42 year old woman looking to meet men between the ages of 41 and 60.
View Profile
Sweetlipsss627
I'm a 21 year old woman looking to meet men between the ages of 25 and 50.
View Profile
skati43
I'm a 43 year old woman looking to meet men between the ages of 45 and 60.
View Profile
LadyJimpster
I'm a 23 year old woman looking to meet men between the ages of 22 and 28.
View Profile
ntando_784
I'm a 34 year old woman looking to meet men between the ages of 40 and 50.
View Profile
LavishT
I'm a 21 year old woman looking to meet men and women between the ages of 25 and 27.
View Profile
Calmine
I'm a 24 year old woman looking to meet men between the ages of 25 and 40.
View Profile
Roroe
I'm a 26 year old woman looking to meet men and women between the ages of 22 and 30.
View Profile
hlehle888
I'm a 41 year old woman looking to meet men between the ages of 45 and 50.
View Profile
smilyz
I'm a 43 year old woman looking to meet men between the ages of 35 and 48.
View Profile
vicky74
I'm a 40 year old woman looking to meet men between the ages of 38 and 45.
View Profile
danda100
I'm a 47 year old woman looking to meet men between the ages of 37 and 52.
View Profile
armor2014
I'm a 55 year old woman looking to meet men between the ages of 45 and 70.
View Profile
Sweatma72
I'm a 42 year old woman looking to meet men between the ages of 25 and 45.
View Profile
briluu
I'm a 24 year old woman looking to meet men between the ages of 27 and 37.
View Profile
Rosey903
I'm a 40 year old woman looking to meet men between the ages of 38 and 45.
View Profile
Bathandwa83
I'm a 31 year old woman looking to meet men between the ages of 31 and 47.
View Profile
RareT0paz
I'm a 35 year old woman looking to meet men between the ages of 38 and 60.
View Profile
TABIEE
I'm a 29 year old woman looking to meet men between the ages of 40 and 100.
View Profile
kncyLuv
I'm a 28 year old woman looking to meet men between the ages of 27 and 45.
View Profile
Curvz
I'm a 41 year old woman looking to meet men between the ages of 38 and 45.
View Profile
Voicelady
I'm a 40 year old woman looking to meet men between the ages of 35 and 50.
View Profile
Sthandwasakhesit
I'm a 29 year old woman looking to meet men between the ages of 30 and 35.
View Profile
Noks76
I'm a 38 year old woman looking to meet men between the ages of 37 and 45.
View Profile
Leratomntande
I'm a 23 year old woman looking to meet men between the ages of 25 and 30.
View Profile
kiara_111
I'm a 24 year old woman looking to meet men between the ages of 26 and 35.
View Profile
spesy59
I'm a 35 year old woman looking to meet men between the ages of 32 and 40.
View Profile
Emjae
I'm a 38 year old woman looking to meet men between the ages of 35 and 45.
View Profile
BOTSHELOMAN
I'm a 32 year old woman looking to meet men between the ages of 35 and 42.
View Profile
pumpania
I'm a 27 year old woman looking to meet men between the ages of 28 and 40.
View Profile
RealBlackPearl
I'm a 22 year old woman looking to meet men between the ages of 25 and 35.
View Profile
Foxy88
I'm a 22 year old woman looking to meet men between the ages of 25 and 33.
View Profile
CYAGal
I'm a 28 year old woman looking to meet men between the ages of 35 and 50.
View Profile
Ticom_199
I'm a 29 year old woman looking to meet men between the ages of 29 and 45.
View Profile
mitch09
I'm a 29 year old woman looking to meet men between the ages of 35 and 40.
View Profile
Dudutuli246
I'm a 34 year old woman looking to meet men between the ages of 35 and 50.
View Profile
Funfoodie3012
I'm a 49 year old woman looking to meet men between the ages of 45 and 55.
View Profile
Thel_89_zzz
I'm a 25 year old woman looking to meet men between the ages of 30 and 45.
View Profile
gloml66
I'm a 48 year old woman looking to meet men between the ages of 40 and 58.
View Profile
Royalness
I'm a 29 year old woman looking to meet men between the ages of 30 and 45.
View Profile
kafze
I'm a 29 year old woman looking to meet men between the ages of 29 and 45.
View Profile
joocypie
I'm a 28 year old woman looking to meet men between the ages of 27 and 45.
View Profile
kgotlas
I'm a 34 year old woman looking to meet men between the ages of 30 and 45.
View Profile
MissD123
I'm a 39 year old woman looking to meet men between the ages of 36 and 47.
View Profile
Smashizo
I'm a 29 year old woman looking to meet men between the ages of 32 and 37.
View Profile
FanceFace
I'm a 27 year old woman looking to meet men between the ages of 28 and 45.
View Profile
nwaolisa
I'm a 31 year old woman looking to meet men between the ages of 32 and 41.
View Profile
Mag137
I'm a 60 year old woman looking to meet men between the ages of 57 and 67.
View Profile
samke_722
I'm a 22 year old woman looking to meet men between the ages of 22 and 25.
View Profile
ally_charmy80
I'm a 34 year old woman looking to meet men between the ages of 40 and 55.
View Profile
sassyfoxylady101
I'm a 33 year old woman looking to meet men between the ages of 25 and 45.
View Profile
0cean_ntr
I'm a 38 year old woman looking to meet men between the ages of 25 and 45.
View Profile
Shazzyyyy
I'm a 29 year old woman looking to meet men between the ages of 28 and 35.
View Profile
Zama101
I'm a 29 year old woman looking to meet men between the ages of 29 and 100.
View Profile
Cyndilouper
I'm a 35 year old woman looking to meet men between the ages of 30 and 45.
View Profile
sweetnessmgm
I'm a 26 year old woman looking to meet men between the ages of 40 and 63.
View Profile
Mbaliholysexyness
I'm a 19 year old woman looking to meet men between the ages of 19 and 27.
View Profile
sbobo736
I'm a 27 year old woman looking to meet men between the ages of 25 and 45.
View Profile
Mistry_lady
I'm a 41 year old woman looking to meet men between the ages of 35 and 45.
View Profile
kauwel
I'm a 40 year old woman looking to meet men between the ages of 39 and 55.
View Profile
Rivee
I'm a 24 year old woman looking to meet men between the ages of 26 and 32.
View Profile
zama1zn
I'm a 37 year old woman looking to meet men between the ages of 38 and 47.
View Profile
leez83
I'm a 31 year old woman looking to meet men between the ages of 25 and 42.
View Profile
marryme2014
I'm a 34 year old woman looking to meet men between the ages of 37 and 45.
View Profile
simphy337
I'm a 30 year old woman looking to meet men between the ages of 35 and 45.
View Profile
mcgoyer
I'm a 26 year old woman looking to meet men between the ages of 27 and 35.
View Profile
fiksBee
I'm a 25 year old woman looking to meet men between the ages of 26 and 40.
View Profile
myth909
I'm a 34 year old man looking to meet women between the ages of 25 and 45.
View Profile
Dayo78
I'm a 36 year old man looking to meet women between the ages of 20 and 50.
View Profile
Thulani1234
I'm a 42 year old man looking to meet women between the ages of 27 and 45.
View Profile
CoolnCalm
I'm a 35 year old man looking to meet women between the ages of 25 and 45.
View Profile
STONE_228
I'm a 42 year old man looking to meet women between the ages of 18 and 35.
View Profile
bangstar
I'm a 22 year old man looking to meet women between the ages of 19 and 23.
View Profile
mfhalim
I'm a 42 year old man looking to meet women between the ages of 18 and 35.
View Profile
tonym
I'm a 44 year old man looking to meet women between the ages of 24 and 35.
View Profile
Mpeks
I'm a 22 year old man looking to meet women between the ages of 18 and 30.
View Profile
GD1
I'm a 70 year old man looking to meet women between the ages of 55 and 65.
View Profile
lmn4life
I'm a 37 year old man looking to meet women between the ages of 28 and 35.
View Profile
Minkh
I'm a 30 year old man looking to meet women between the ages of 18 and 29.
View Profile
loner729
I'm a 40 year old man looking to meet women between the ages of 25 and 45.
View Profile
Clownstotheleftofme
I'm a 45 year old man looking to meet women between the ages of 32 and 41.
View Profile
Lawrence218
I'm a 26 year old man looking to meet women between the ages of 25 and 39.
View Profile
dev_xoxox52
I'm a 53 year old man looking to meet women between the ages of 41 and 65.
View Profile
Siyabulela90
I'm a 24 year old man looking to meet men between the ages of 25 and 45.
View Profile
gario
I'm a 54 year old man looking to meet women between the ages of 18 and 50.
View Profile
catcher182
I'm a 22 year old man looking to meet men between the ages of 20 and 24.
View Profile
Ernie_Manyesa
I'm a 32 year old man looking to meet women between the ages of 20 and 45.
View Profile
Phistos_Number_1
I'm a 38 year old man looking to meet women between the ages of 30 and 40.
View Profile
Mxo87
I'm a 27 year old man looking to meet women between the ages of 18 and 30.
View Profile
Jono693
I'm a 42 year old man looking to meet women between the ages of 25 and 45.
View Profile
Shadra143
I'm a 22 year old man looking to meet women between the ages of 18 and 45.
View Profile
Terror000
I'm a 28 year old man looking to meet women between the ages of 25 and 45.
View Profile
Oupa0414
I'm a 29 year old man looking to meet women between the ages of 25 and 33.
View Profile
hawk619
I'm a 44 year old man looking to meet women between the ages of 35 and 45.
View Profile
shiva709
I'm a 56 year old man looking to meet women between the ages of 45 and 56.
View Profile
Gemini24
I'm a 45 year old man looking to meet women between the ages of 30 and 45.
View Profile
bobbylava
I'm a 35 year old man looking to meet women between the ages of 18 and 31.
View Profile
Rendzo
I'm a 47 year old man looking to meet women between the ages of 25 and 45.
View Profile
Chacal
I'm a 44 year old man looking to meet women between the ages of 30 and 40.
View Profile
tripplekkkk
I'm a 37 year old man looking to meet women between the ages of 18 and 30.
View Profile
Sabloma
I'm a 45 year old man looking to meet women between the ages of 20 and 35.
View Profile
Eriqnes
I'm a 33 year old man looking to meet women between the ages of 21 and 35.
View Profile
Smooth_Kriminal
I'm a 27 year old man looking to meet men between the ages of 25 and 45.
View Profile
Jabz_0
I'm a 29 year old man looking to meet women between the ages of 25 and 36.
View Profile
choeu
I'm a 42 year old man looking to meet women between the ages of 25 and 45.
View Profile
Kelvin7777
I'm a 50 year old man looking to meet women between the ages of 42 and 56.
View Profile
JonnyBee
I'm a 26 year old man looking to meet women between the ages of 19 and 28.
View Profile
THOKZANHLA
I'm a 44 year old man looking to meet women between the ages of 25 and 44.
View Profile
charged
I'm a 40 year old man looking to meet women between the ages of 25 and 35.
View Profile
gwbyo
I'm a 41 year old man looking to meet men between the ages of 21 and 40.
View Profile
TSKgosiemang
I'm a 52 year old man looking to meet women between the ages of 35 and 50.
View Profile
mcD
I'm a 39 year old man looking to meet women between the ages of 25 and 40.
View Profile
Dalubuhle
I'm a 27 year old man looking to meet men between the ages of 26 and 45.
View Profile
mixido2
I'm a 39 year old man looking to meet women between the ages of 18 and 35.
View Profile
dlarah
I'm a 45 year old man looking to meet women between the ages of 30 and 40.
View Profile
sbo123sss
I'm a 30 year old man looking to meet women between the ages of 25 and 45.
View Profile
PoundzMm
I'm a 23 year old man looking to meet women between the ages of 23 and 30.
View Profile
Lucky123nxt
I'm a 36 year old man looking to meet women between the ages of 18 and 40.
View Profile
lookingforfunza
I'm a 36 year old man looking to meet women between the ages of 20 and 40.
View Profile
Seriousaboutlife325
I'm a 38 year old man looking to meet women between the ages of 18 and 100.
View Profile
GWL321
I'm a 58 year old man looking to meet women between the ages of 46 and 56.
View Profile
SSBK547P
I'm a 39 year old man looking to meet women between the ages of 18 and 30.
View Profile
Ma1010n
I'm a 26 year old man looking to meet women between the ages of 25 and 45.
View Profile
gothicD
I'm a 44 year old man looking to meet women between the ages of 18 and 37.
View Profile
Deejay_homy
I'm a 46 year old man looking to meet women between the ages of 18 and 42.
View Profile
mattgeah
I'm a 31 year old man looking to meet women between the ages of 25 and 40.
View Profile
dlalo
I'm a 44 year old man looking to meet women between the ages of 18 and 100.
View Profile
shooter_949
I'm a 51 year old man looking to meet women between the ages of 20 and 50.
View Profile
Henry071
I'm a 28 year old man looking to meet women between the ages of 25 and 35.
View Profile
sweetman465
I'm a 67 year old man looking to meet women between the ages of 48 and 62.
View Profile
Vbe2014
I'm a 37 year old man looking to meet women between the ages of 25 and 30.
View Profile
bigbhele
I'm a 34 year old man looking to meet women between the ages of 18 and 55.
View Profile
Satisfactor99
I'm a 37 year old man looking to meet women between the ages of 18 and 35.
View Profile
Masterrapture
I'm a 49 year old man looking to meet women between the ages of 21 and 45.
View Profile
mesut909
I'm a 45 year old man looking to meet women between the ages of 25 and 55.
View Profile
Washe
I'm a 37 year old man looking to meet women between the ages of 25 and 33.
View Profile
GastFR
I'm a 39 year old man looking to meet women between the ages of 25 and 39.
View Profile
Mok_01
I'm a 42 year old man looking to meet women between the ages of 28 and 35.
View Profile
Wyne_
I'm a 27 year old man looking to meet women between the ages of 20 and 29.
View Profile
Deathrow5662
I'm a 39 year old man looking to meet women between the ages of 25 and 35.
View Profile
LIONKING915
I'm a 59 year old man looking to meet women between the ages of 38 and 50.
View Profile
Diva1308
I'm a 43 year old man looking to meet women between the ages of 18 and 100.
View Profile
IceTy
I'm a 42 year old man looking to meet women between the ages of 18 and 42.
View Profile
Fanzonator
I'm a 28 year old man looking to meet women between the ages of 25 and 45.
View Profile
tsvoritsvoto
I'm a 27 year old man looking to meet women between the ages of 18 and 25.
View Profile
Jb24golf
I'm a 40 year old man looking to meet women between the ages of 32 and 38.
View Profile
Thamza_77
I'm a 37 year old man looking to meet women between the ages of 18 and 35.
View Profile
bloodmoney370
I'm a 43 year old man looking to meet women between the ages of 30 and 50.
View Profile
TuEsDAy
I'm a 52 year old man looking to meet women between the ages of 35 and 55.
View Profile
Bento1
I'm a 52 year old man looking to meet women between the ages of 38 and 50.
View Profile
Siwithpie
I'm a 44 year old man looking to meet women between the ages of 23 and 45.
View Profile
Moxion
I'm a 27 year old man looking to meet women between the ages of 18 and 35.
View Profile
Qtip
I'm a 30 year old man looking to meet women between the ages of 26 and 32.
View Profile
Ophion
I'm a 21 year old man looking to meet men between the ages of 25 and 45.
View Profile