Conduct of Financial Institutions Bill (COFI)
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Individual Reform: Conduct of Financial Institutions Bill (COFI) 2026 - 2027

Enact COFI Bill to harmonise market regulation

No data available for the deliverable: Enact COFI Bill to harmonise market regulation

No data available for the deliverable: Enact COFI Bill to harmonise market regulation

No data available for the deliverable: Enact COFI Bill to harmonise market regulation

No data available for the deliverable: Enact COFI Bill to harmonise market regulation

No data available for the deliverable: Enact COFI Bill to harmonise market regulation

Summary

The COFI Bill replaces a patchwork of legacy laws with a single, comprehensive framework for market conduct, aligning South Africa with global “Twin Peaks” standards and enhancing regulatory clarity.

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Is it working?

The reform is nearing completion, with broad industry support and strong government commitment. The main remaining step is parliamentary approval, after which the FSCA will oversee phased implementation. The COFI Bill is expected to be enacted in late 2025, after which it will fundamentally reshape the market conduct landscape.

Actions

Public consultations have concluded and the FSCA is running industry readiness programmes. The phased implementation plan is designed to ensure a smooth transition once the bill is passed. The SCA is conducting mock audits, with draft regulations having been published in November 2024. The final stage is for National Treasury to receive state law adviser certification.

Are there plans?

The Cofi Bill’s final draft is before Parliament, with the FSCA developing new licensing, supervision and enforcement frameworks in anticipation of its enactment.

Is it on the agenda?

The bill is a top priority for the FSCA and Natioal Treasury, highlighted in the 2025–2028 regulatory strategy and repeatedly referenced in SONA and Budget speeches.

Goals

To modernise and harmonise market conduct regulation across all financial institutions, protecting consumers and promoting fair competition.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury Parliament

Summary

The COFI Bill replaces a patchwork of legacy laws with a single, comprehensive framework for market conduct, aligning South Africa with global “Twin Peaks” standards and enhancing regulatory clarity. The FSCA and NT are driving passage of the Conduct of Financial Institutions Bill to consolidate outcomes and institute principles-based supervision. The COFI Bill has been published with a sector-wide review and a market consultation phase-in in progress.
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Canvas not supported.

Is it working?

The reform is nearing completion, with broad industry support and strong government commitment. The main remaining step is parliamentary approval, after which the FSCA will oversee phased implementation. The COFI Bill is expected to be enacted in late 2025, after which it will fundamentally reshape the market conduct landscape.

Actions

Public consultations have concluded and the FSCA is running industry readiness programmes. The phased implementation plan is designed to ensure a smooth transition once the bill is passed. Mock audits are being conducted, with draft regulations having been published in November 2024. The final stage is for National Treasury to receive state law adviser certification. COFI Bill implementation moving well with significant completed targets for sector harmonisation.

Are there plans?

The Cofi Bill’s final draft is before Parliament, with the FSCA developing new licensing, supervision and enforcement frameworks in anticipation of its enactment. There is a transition plan together with finalisation and sector adaptation as well as periodic reviews.
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Is it on the agenda?

The bill is a top priority for the FSCA and Natioal Treasury, highlighted in the 2025–2028 regulatory strategy and repeatedly referenced in SONA and Budget speeches. This is a Parliament/Cabinet strategic regulatory agenda with FSCA industry consultations ongoing.

Goals

To modernise and harmonise market conduct regulation across all financial institutions, protecting consumers and promoting fair competition. The main objective is to harmonise market regulation and outcomes-driven conduct rules.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury Parliament

Summary

Once enacted, the Conduct of Financial Institutions Act will enable: (i) a unified licence and activity‑classification system; (ii) FSCA with powers to issue conduct standards that apply across sectors; (iii) transitional arrangements to convert existing licences and migrate conduct requirements out of legacy laws (FAIS, parts of insurance, CIS, pension and other legislation); and (iv) explicit mechanisms for proportionality, innovation sandboxes and financial‑inclusion exemptions. Legal and regulatory commentary anticipates enactment in 2026 followed by a transitional period of about three years for full migration and licence conversion.

Canvas not supported.

Is it working?

COFI is not yet in force, but the direction and architecture are well defined: there is broad consensus that a single, activity‑based conduct act should reduce fragmentation, improve customer outcomes supervision and give the FSCA clearer levers over culture, product design and distribution across the sector. Execution risks are mainly around legislative timing, the scale and sequencing of conduct standard rollout and the operational burden of licence conversion and systems change, particularly for smaller firms. FSCA has indicated that proportionality, phasing and extensive consultation will be used to manage these risks.

Actions

Actions to date include: (i) publishing successive drafts of the COFI Bill and the accompanying policy paper, “A stronger market conduct policy framework for South Africa”, setting out the activity‑based and cross‑sector design; (ii) extensive consultations with industry and consumer bodies since the first draft in 2018; (iii) FSCA issuing its Regulatory Strategy 2025-2028 and harmonisation communications, signalling that many new conduct standards will be made under COFI once enacted; and (iv) confirmation in legal and regulatory updates that the bill has moved through State Law Advisor processes and is being prepared for Cabinet and Parliamentary consideration, with transitional arrangements and licence conversion already being scoped.

Are there plans?

Key forward plans include: (i) securing Cabinet approval of the revised bill and tabling it in Parliament, with passage targeted for 2026; (ii) designing a phased transition during which existing FSP and other licences are converted, new conduct standards are consulted on and issued, and overlapping provisions in legacy acts are repealed or aligned; and (iii) embedding proportionality and innovation mechanisms (such as exemptions to support developmental, financial‑inclusion and fintech objectives) within the FSCA’s policy and supervisory approach. FSCA and National Treasury communications emphasise that institutions should already be aligning governance, culture, product‑lifecycle and customer‑outcomes frameworks with COFI principles in anticipation of enactment.
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Is it on the agenda?

The 2026 Budget Review positions COFI as a central pillar of the ongoing financial sector reform agenda, noting that government will finalise the conduct framework to complement prudential reforms and to support transformation, inclusion and competition. FSCA’s Regulatory Strategy 2025–2028 identifies preparing for COFI implementation as a major focus, including harmonisation projects, license‑conversion design and new cross‑cutting conduct standards, while external updates report that Cabinet approval and tabling in Parliament are expected in early 2026, with enactment later in the year.

Goals

To establish a single, activity‑based market‑conduct statute for all financial institutions and products, replacing the current patchwork of sectoral laws, and thereby strengthening customer protection, fair‑treatment outcomes, market integrity and proportionality under the Twin Peaks model.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury Parliament

Summary

Once enacted, the Conduct of Financial Institutions Act will enable: (i) a unified licence and activity‑classification system; (ii) FSCA with powers to issue conduct standards that apply across sectors; (iii) transitional arrangements to convert existing licences and migrate conduct requirements out of legacy laws (FAIS, parts of insurance, CIS, pension and other legislation); and (iv) explicit mechanisms for proportionality, innovation sandboxes and financial‑inclusion exemptions. Legal and regulatory commentary anticipates enactment in 2026 followed by a transitional period of about three years for full migration and licence conversion.

Canvas not supported.

Is it working?

COFI is not yet in force, but the direction and architecture are well defined: there is broad consensus that a single, activity‑based conduct act should reduce fragmentation, improve customer outcomes supervision and give the FSCA clearer levers over culture, product design and distribution across the sector. Execution risks are mainly around legislative timing, the scale and sequencing of conduct standard rollout and the operational burden of licence conversion and systems change, particularly for smaller firms. FSCA has indicated that proportionality, phasing and extensive consultation will be used to manage these risks.

Actions

Actions to date include: (i) publishing successive drafts of the COFI Bill and the accompanying policy paper, “A stronger market conduct policy framework for South Africa”, setting out the activity‑based and cross‑sector design; (ii) extensive consultations with industry and consumer bodies since the first draft in 2018; (iii) FSCA issuing its Regulatory Strategy 2025-2028 and harmonisation communications, signalling that many new conduct standards will be made under COFI once enacted; and (iv) confirmation in legal and regulatory updates that the bill has moved through State Law Advisor processes and is being prepared for Cabinet and Parliamentary consideration, with transitional arrangements and licence conversion already being scoped.

Are there plans?

Key forward plans include: (i) securing Cabinet approval of the revised bill and tabling it in Parliament, with passage targeted for 2026; (ii) designing a phased transition during which existing FSP and other licences are converted, new conduct standards are consulted on and issued, and overlapping provisions in legacy acts are repealed or aligned; and (iii) embedding proportionality and innovation mechanisms (such as exemptions to support developmental, financial‑inclusion and fintech objectives) within the FSCA’s policy and supervisory approach. FSCA and National Treasury communications emphasise that institutions should already be aligning governance, culture, product‑lifecycle and customer‑outcomes frameworks with COFI principles in anticipation of enactment.
rn

Is it on the agenda?

The 2026 Budget Review positions COFI as a central pillar of the ongoing financial sector reform agenda, noting that government will finalise the conduct framework to complement prudential reforms and to support transformation, inclusion and competition. FSCA’s Regulatory Strategy 2025–2028 identifies preparing for COFI implementation as a major focus, including harmonisation projects, license‑conversion design and new cross‑cutting conduct standards, while external updates report that Cabinet approval and tabling in Parliament are expected in early 2026, with enactment later in the year.

Goals

To establish a single, activity‑based market‑conduct statute for all financial institutions and products, replacing the current patchwork of sectoral laws, and thereby strengthening customer protection, fair‑treatment outcomes, market integrity and proportionality under the Twin Peaks model.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury Parliament

Analyst: Tinashe Kambadza
Status: in-progress
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