In June 2023, the Financial Sector Conduct Authority (FSCA) published a draft Position Paper on Open Finance (Draft Position Paper) which builds on the FSCA's initial assessment of the Open Finance landscape published in its 2020 Consultation and Research Paper on Regulating Open Finance.
The Draft Position Paper outlined the FSCA’s proposed policy position for an Open Finance regime in South Africa to provide appropriate recommendations for mitigating the risks posed by Open Finance. The proposed policy position seeks to ensure that valuable customer data is made available to regulated participants for the creation of innovative and personalised financial services and products.
Stakeholders were invited to provide written comments on the policy proposals contained in section 8 of the Draft Position Paper by 15 August 2023. As a concurrent process, the FSCA is now embarking on an information-gathering exercise to consider the uptake, usage and practices by financial institutions and third-party providers (often FinTechs) that participate in Open Finance within the South African landscape. Findings from the study will assist in shaping the Final Position Paper on Open Finance and the Conduct Standards to be developed in the future.
All financial institutions and third-party providers that participate in Open Finance in South Africa must complete the online information request form available by no later than 10 November 2023. Financial institutions or other supervised entities that participate in Open Finance-related activities but fail to provide the specified information by the deadline will be committing an offence under section 267 of the Financial Sector Regulation Act. A person who is guilty of an offence under section 267 will, upon conviction, be liable to a fine not exceeding ZAR 1000 for each day during which the offence continues.
Webber Wentzel clients who participate in Open Finance are urged to respond to the information request expeditiously. Read the FSCA draft position paper on Open Finance.
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