If your business provides financial services or advice, you may need to be authorised as an FSP. It’s a difficult job to be an FSP in South Africa. You must obey multiple laws. The Financial Sector Conduct Authority (FSCA) is the conduct regulator that supervises how financial services firms treat customers. People refer to it as the FSCA. The FSCA’s role is to promote fair customer outcomes and act when firms breach conduct requirements. They make sure that those who sell financial products know what they are doing.
The way the FSCA monitors and supervises firms is evolving. Recent strategy signals suggest more focus on outcomes and evidence. They are also more focused on what you actually do, as opposed to what you say you will do.
Let’s discuss new plans and a major proposed reform called COFI. We will also examine aspects of your business that could be problematic if you aren’t cautious.
Disclaimer: This is only an overview. It is not legal advice. Every business is different. You must speak with your compliance officer or compliance adviser and make sure you’re doing the right thing.
What The FSCA Is Signalling Into 2026
For the years to come, the FSCA has published a regulatory strategy for 2025 to 2028. It sets out priorities for supervision and enforcement.
Previously, the FSCA would largely examine your paperwork. Today, the emphasis is more on evidence of how you operate day to day. If the FSCA asks questions, they may ask for evidence such as advice records, disclosure confirmations, training logs, supervision notes, and a properly maintained complaints register.
The FSCA team is active. They are looking for information frequently. They want to know that you are managing your team. They want to see that you are fixing any mistakes quickly. If you demonstrate that you have a clean and well-organized business, there is much less risk. The smartest preparation is to keep records every single day.
COFI Bill In Plain Language (Status And Why It Matters)
There’s an important proposed reform you should be aware of, called the COFI Bill. COFI is the Conduct of Financial Institutions Bill. This is still a draft Bill right now, which means it is not yet in force as law. This is part of ongoing conduct reform work in South Africa. Even before it is in force, many of its themes align with what the FSCA already emphasises in conduct supervision.
The purpose of the COFI Bill is to simplify rules. Now, there are multiple laws that apply to insurance, investments, and banking. It can get very confusing. COFI is one big book of rules on how to treat customers. This will make it easier for people to understand what is permitted.
It also means the FSCA will focus on “outcomes.” If you sell a product to someone and they lose money because they were lied to, that’s a bad outcome. COFI is trying to prevent those bad outcomes before they occur.
There has been discussion in the market about more activity-based approaches over time. Without guessing final details, the practical step now is to confirm your day-to-day activities and public claims match your current licence scope and approvals.
The Areas Where FSPs Most Often Get Hurt
Sometimes, despite your best efforts, things can go wrong. There are some common areas that FSPs slip up on. These errors can result in fines or the loss of your license. You could refer to these as “danger zones.” You must watch these areas to protect your business.
Fit And Proper
You need to be ‘Fit and Proper’ to work in financial services. This is one of the fit and proper requirements. It implies having the appropriate skill set and knowledge. Proper means that you are an honest person who follows the law. If you want to remain FAIS compliant, you’ve got to keep learning. You don’t just take one test and walk away.
Depending on your role, you and your team may have CPD requirements. That’s Continuous Professional Development. It is akin to returning to school for a few hours every year while new rules are explained. You need to keep track of this.
If the FSCA asks for proof and you can’t provide it, it can create avoidable compliance risk. You must make sure that everyone on your team is properly qualified to sell particular products. It’s a bit different to sell an investment product versus car insurance. You need the appropriate training for each one of them.
Key Individual Accountability
Each FSP shall have no less than one key individual. This is the compliance boss. They will be the ones the FSCA contacts if there is an issue. The KI has a huge responsibility. They have to track everything in the business. You can’t just sit in their office and hope for the best.
A proper KI should have a schedule. They should test a couple of client files a month to ensure they are accurate. They should speak to the representatives and ask product-related questions. If something messes up, the KI is the one who has to tell why it happened. A worker is not to be condemned. FSCA is going to ask the KI why they didn’t keep a closer eye on that worker. A KI is a full-time job of keeping things organized.
Representative Oversight
Your rep is the person who’s talking to your client. Since they are essentially a reflection of your company, you will be held responsible for what they say or do. This is a high-risk area. You are required to keep your representative records current, and you can verify representative status on the FSCA representative register This is everyone who works for you. When someone leaves your company, you need to update your records promptly. If you keep them on a list and they do something bad, it’s your fault.
You should also do an FSCA debarment check when you hire a new employee. This is a way to find out whether that person was ever banned from the business. If they were debarred for lack of honesty, you cannot hire them to advise. You should also have a plan for supervision. If someone is a newbie, someone else has to look over their work. Record every time you check their work. This is the “evidence” the FSCA wants.
Complaints Handling
Nobody wants an angry customer, but the FSCA views complaints as an opportunity to learn. They want you to have a system in place for managing unhappy customers. You need a complaints register (FSCA complaints). This functions as a register where every complaint is documented. You should also note how the issue was resolved.
The FSCA must know that you’re looking for trends. If multiple clients complain about the same issue, it indicates a systemic problem in your business. It means something in your company is broken. A decent FSP would review complaints and change its practices to prevent the same mistake from happening again. This is known as root-cause analysis, or simply fixing the actual problem.
Marketing And Misrepresentation
It’s 2026; everyone is using the internet to attract new clients. Maybe you use Facebook, LinkedIn, or WhatsApp, but you have to be incredibly careful about what you post. You can’t promise things that sound too good to be true. You can’t say a product is guaranteed to make people money if it’s not. The FSCA has strict marketing conduct standards.
Before sharing anything, ask yourself if it is 100% true. Does it inform the client of the risks? Is your FSP number on it? You should have a rule that the boss checks everything before it goes live. This protects your reputation and prevents mistakes. If the FSCA spots a misleading ad, they can act very quickly.
Debarment Basics
Debarment is the act of banning a person from working in the financial services industry because of dishonesty or impropriety. Its purpose is to protect users and maintain public confidence in the financial system. Fairness is especially important in debarment decisions because taking away someone’s ability to work affects their livelihood. Accordingly, the FSCA anticipates that decisions will be reasonable, rational, and rationalized.
Documentation should be accurate, clear, and comprehensive enough to demonstrate precisely what occurred and how the decision was made. If records are poor or nonexistent, a debarment can be challenged and removed. Solid documentation protects the business and process but also proves that the matter was dealt with according to FSCA requirements.
Licence And Register Checks
One of the simplest tasks is also one of the most important. You must keep an eye on your FSP license status. Sometimes, an FSP forgets to pay a fee or update an address. This can result in license suspension. FSCA license checks are possible on the FSCA website in a few minutes.
You also need to review the official FSCA register for your company. Make sure your contact details are correct. Outdated contact details can create delays and unnecessary risk. Checking this once a month and keeping proof shows you are responsible.
What Recent Enforcement And Warnings Teach Us
The FSCA often publishes enforcement actions and public warnings about companies that broke the rules. These are warnings to consumers, but also lessons for FSPs. Recent cases show that impersonation and poor governance are major risks in 2026. If someone is misusing your company name, you must act fast.
Key Definitions
FSCA (Financial Sector Conduct Authority): The regulator for financial businesses in South Africa.
FAIS Act: The law that governs how FSPs must act and advise.
FSP (Financial Service Provider): A licensed business providing financial advice or services.
Key Individual (KI): The person responsible for compliance within the FSP.
Representative: A person who advises clients on financial products.
TCF (Treating Customers Fairly): Six outcomes ensuring clients are treated fairly.
Debarment: A ban from working in financial services due to misconduct.
Standards of Conduct: FSCA rules governing specific business activities.
COFI Bill: A proposed law combining financial conduct rules into one system.
2026 Readiness Checklist
- Review the licence footprint vs real activities and marketing.
- Verify FSP registrations and keep proof.
- Refresh disclosures and make sure staff use the latest versions.
- Set a KI oversight routine (file sampling and training refresh).
- Improve the complaint register and root-cause tracking.
- Add a marketing approval step and review partner content.
- Tighten record-keeping so you can answer FSCA questions fast.
- Assign one person to track FSCA and Treasury updates monthly.
How CompliShield Can Help
Reading the rules is one thing. Running a clean compliance system every week is another.
If you want support that is practical and structured (not vague advice), CompliShield can help you:
- get your licensing and onboarding right, so your activities and claims match your licence scope
- set up simple processes for representative oversight and regular register checks
- tighten complaints handling and disclosures so you have clear “proof” if the FSCA asks
To get started, you can visit these links:
Conclusion
The year 2026 is a time of anticipation for FSPs who want to do things right. You don’t need to fear the FSCA. If you are honest, organized, and keep good records, you are already on the right path. The COFI Bill is focused on ensuring good outcomes for customers.
The best way to stay safe: don’t stop checking your work. Follow the checklist, communicate with your team, and remember that FAIS compliance is not a one-time task. It is a daily practice. If you prioritize fairness and keep your FSCA records current, your business will be in a stronger position.