Most sections of the Financial Sector Regulation Act 2017 were brought into force from 1 April 2018. This step was anticipated as the first step towards the commencement of the new Insurance Act on 1 July 2018.
By a two-step process the Minister was empowered in a Gazette of 29 March 2018 to make regulations, which were passed on that day, to enable the Reserve Bank to perform the functions of the Prudential Authority and for the FSB to perform the functions of the Conduct Authority in the meantime. The regulations also put in place the processes to establish the new authorities and to transfer FSB assets and staff to the Conduct Authority in due course.
Here is the link to Notice 169 of 2018 in Government Gazette 41549 of 29 March 2018 reflecting the provisions brought into force and a link to the Regulation Gazette R405 of 29 March 2018 Government Gazette 41550.
Most of the Act is in force except:
- the sections creating an inter-ministerial council, the laws regarding significant owners and financial conglomerates which only come into force on 1 January and 1 March 2019 respectively;
- all the provisions replacing the current ombud system which will only take effect on 1 October 2018, and the fees and levies (which are probably going to cost financial institutions dearly to pay for all this).
Many of the amendments to financial institutions legislation are yet to come into force. The Conduct Authority provisions in the Long-term Insurance Act and the Short-term Insurance Act regulated by the FSB (now the Conduct Authority) remain in place for now.
The nasty provisions regarding offences, penalties and personal liability will be effective for insurers when the new Insurance Act is in force.
The immediate effect of bringing the law into force is to give official status to the publication of the draft Prudential Standards. You have till 23 April to comment on the draft Prudential Standards. The intention is to bring them into force when the new Insurance Act comes into force on 1 July 2018.