The savings and investment regulatory landscape in South Africa shows increasing fragmentation, according to the the Association for Savings and Investment South Africa (ASISA).
Multiple frameworks, administered by different authorities, applying different measurement mechanisms and targeting the same or similar activities, said the association in the “ASISA Industry Transformation Report for 2026”.
Over the past five years, seven authorities released 10 different frameworks with the aim of progressing transformation, ASISA CEO Mr Kaizer Moyane said separately.
Risks of regulatory fragmentation
The report added that regulatory fragmentation creates three practical risks.
First, institutions face greater compliance complexity as they deal with overlapping and sometimes divergent requirements. This adds costs without any guarantee of better outcomes. Second, targets under different frameworks may not align with one another, or with the skills and market conditions required to meet them. This can make the targets unattainable and weaken the credibility of the framework. Third, new rules may cut across systems that are already working, creating the risk of displacing effective arrangements before a better alternative is in place.
“The fragmentation creates regulatory risk. When well-intentioned policies are developed separately and without coordination, they can work against one another. This raises the cost of transformation without improving impact and, in the worst case, may undermine the very outcomes these policies were designed to achieve,” said the report.
It added, “At the same time, the Financial Sector Code needs to keep evolving with the times. There is a pending Financial Sector Code review aimed at updating the Code’s targets and elements. However, due to delays, it is not expected to be finalised as quickly as industry stakeholders had hoped. This delay matters because, if the review of the sector Code remains open, other government departments may continue setting their own targets, on their own timelines, without reference to the Code that is meant to serve as the sector’s anchor.”
Challenge
The report said, “The challenge increasingly lies in ensuring that the policies and instruments designed to advance transformation are aligned and reinforce one another, rather than creating contradictions.”
The response to the challenge “is not less regulation, but better coordinated and properly consulted rules developed with stakeholders,” the report added.
The answer is also how additional institutional mechanisms can complement and enhance those already delivering measurable results.
ASISA members comprise life insurers, asset managers, collective investment scheme management companies, linked investment service providers and multi-managers.