By: Lizl Budhram, Head of Advice at Old Mutual Personal Finance

The Conduct of Financial Institutions (COFI) Bill is well on its way to ushering in a new era for South Africa’s financial services industry, one rooted in transparency, fairness, and stronger consumer protection.

Old Mutual Personal Finance (OMPF), a leading provider of financial advice and investment solutions and a wholly owned subsidiary of the Old Mutual Group, has declared its full support for the Bill, describing it as a progressive and much-needed step toward a more ethical, inclusive, and accountable financial sector.

“Supporting the COFI Bill is ultimately about advocating for our advisers and customers, improving sector governance, and building toward a more sustainable financial ecosystem that encourages consistency and clarity in how financial products and services are delivered and regulated,” explains Lizl Budhram, Head of Advice at Old Mutual Personal Finance.

As South Africa continues to strengthen its financial regulatory landscape through the Twin Peaks reform process, the COFI Bill stands out as a transformative tool that simplifies and consolidates existing conduct legislation into a single, principle-based, outcomes-driven framework.

Introduced in 2018, the Twin Peaks model reshaped South Africa’s financial regulatory system by establishing two dedicated regulators: the Prudential Authority (PA), which oversees the financial soundness of institutions, and the Financial Sector Conduct Authority (FSCA), which supervises how financial institutions treat their customers. This dual approach separates prudential oversight from market conduct supervision.

Budhram believes that COFI will benefit both consumers and financial institutions by creating an environment that promotes transparency, accountability, and innovation.

She further explains that the Bill is designed to modernise the regulatory environment by shifting away from rigid, fragmented rules toward a unified and coherent system that applies equally across all institutions providing financial services, regardless of their form or sector.

Once enacted, the COFI Bill will replace the conduct provisions in various existing laws and eliminate duplication and conflicting regulatory provisions. This will effectively empower the FSCA to oversee market conduct across the board while reinforcing the core principle of treating customers fairly.

The Bill is underpinned by four key pillars:

• Activity-based regulation: Similar financial activities will be regulated in the same way, regardless of who provides them.
• Principles-based framework: Regulators will set intentions and outcomes rather than prescribing exact steps, offering institutions greater flexibility.
• Outcomes-focused supervision: The emphasis is on delivering fair customer outcomes, not just ticking compliance boxes.
• Risk-based and proportionate regulation: Institutions will be supervised based on the risk they pose to customers and the sector, ensuring fairness and practicality.

Budhram explains that the COFI Bill reflects a deep understanding of both consumer protection and market realities. "The FSCA has been deliberate in recognising the strain that constant regulatory changes place on institutions. With COFI, we get a single, flexible framework that aligns with international best practice and responds to modern risks, from cybercrime to AI-enabled services," she says.

Old Mutual Personal Finance views the Bill as a catalyst for:

• Enhanced consumer trust through transparent practices and clearer accountability.
• Innovation enablement, particularly in areas like open finance, fintech, and artificial intelligence.
• Improved adviser outcomes, as the framework allows advisers to focus on what matters most, client needs and aspirations, rather than compliance complexity.
• Streamlined regulatory transition, allowing institutions to evolve without operational disruption.

“Fittingly, this Bill enables financial services providers to build lasting relationships with customers based on outcomes, not just products,” Budhram adds. “It shifts the mindset from sales to service, and from regulation to responsibility”.

As part of its support for the Bill, Old Mutual urges all financial industry stakeholders, particularly advisers, to take an active role in preparing for COFI’s rollout by staying informed on the latest draft regulations, understanding the intent behind the legislation to ensure meaningful implementation, and engaging early to enable smooth operational adjustments once it becomes law.

“The COFI Bill marks a regulatory turning point, one that promises a more ethical, competitive, and customer-focused financial services sector. It lays the groundwork for long-term trust between providers and customers, while positioning the industry to embrace technology and innovation responsibly,” says Budhram.

In conclusion, she states, “South Africa’s regulatory framework has reached a point of maturity. It’s time to consolidate, simplify, and lead with purpose. COFI gives us the clarity, cohesion, and confidence to do just that”.

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