/ Treating Customers Fairly

TCF Penalties: Looking At The Harsh Reality

Understanding the Penalties

The rules of the game have changed. Financial customers are not adequately protected in South Africa which is why government is taking steps to transform the financial sector through a dedicated market conduct regulator and The Financial Sector Regulation Bill.

This means that the fair treatment of customers has to be considered, measured and tracked as well as driven through ongoing enhancements. A sure step forward in giving the customer a voice that will be heard.

On the other hand, the financial services business that are slow to transform will be liable for harsh penalties, fines and even withdrawal or suspension of trading licenses for transgressors. The Regulator is also set on the naming and shaming of errant firms, the reputational damage thereof dwarfing monetary penalties. Click here to read the full article, Penalties or Profits

Penalties or Profits?

At the verge of this looming change, South African businesses are in the fortunate position to be able to take into account the international learnings related to market conduct reform. These learnings are typically from an overarching reforms such as in the UK, Australia, Peru, Indonesia and the US.

The Financial Times described the UK reform as “British banks have faced an onslaught of penalties in recent years for offences.” Furthermore, they reported “While companies expected an increase in litigation and higher fines for the banking sector, the sheer scale of the penalties wasn’t expected.”

The Financial Times went on to further explain that the world’s biggest banks are facing increasing pressure to control compliance and regulatory costs from investors, analysts and some executives, as regulators are more focused than ever on compliance.

Raichel Hopkinson, the head of the practical law dispute resolution service at Thomson Reuters was quoted saying, “The cost of litigation was once seen as just a cost of doing business” however “This is now the era of the billion-dollar fine”.

Penalties or Profits. What’s your move?

Click here to read the full article, Penalties or Profits


Fortado, L. Financial Times, British banks pay £12bn in penalties - Lenders under pressure from shareholders to control regulatory costs. Available online at: https://www.ft.com/content/3389707c-0790-11e5-a58f-00144feabdc0