Linda Ensor
15 May 2008
Cape Town — The Financial Services Board (FSB) will be empowered to disclose confidential information when it is in the public interest in terms of draft legislation tabled in Parliament yesterday.
The board is prohibited from sharing confidential information it gleans about institutions under its supervision to anyone except other regulators, but the General Financial Laws Amendment Bill is set to change this.
FSB deputy executive officer for investment institutions Dube Tshidi said that had the board had this power when it conducted its inspection into collapsed Fidentia asset management company, it could have alerted potential investors to the risks associated with it .
Executive officer Rob Barrow said the prohibition on disclosure prevented the FSB from "naming and shaming" to get institutions to comply with the law. The bill contains amendments to a range of laws with the aim of closing regulatory gaps and keeping the regulation of SA's financial services sector abreast with global and domestic developments.
Key measures include the introduction of enforcement committees which could impose administrative sanctions and compensatory orders . This would exist alongside criminal prosecution and sanction.
Barrow said the enforcement committees would redress the perception in the market that the FSB was not doing anything about malpractices due to the long delay in concluding a prosecution. The committees would allow the FSB to act quickly.
He said the enforcement committee established under the Securities Services Act had had great success in reducing the number of insider trading cases as companies tightened up their internal procedures.
Treasury director of financial markets Baron Furstenburg said the FSB's inability to impose penalties or take strong action " jeopardises the goal of a culture of compliance". The FSB is therefore seen as a "toothless tiger" in certain instances.
Be the first to Write a Comment!
Copyright © 2008 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
