Abstract
Since the dawn of the new constitutional supremacy, untold pieces of legislation have been promulgated. This led to an increase in legal and regulatory measures which increased the compliance burden, compliance risk and cost of businesses in South Africa, particularly in the financial sector. The objective of this note is to provide a snapshot of the increasing compliance burden on the financial sector between 1996 and 2011. It further highlights the incidence of misalignment among different pieces of legislationwith possible negative effects, using the Consumer Protection Act (68 of 2008) and the insurance industry as a case study. The author examines the generally accepted goals of good regulation and argues for an appropriate regulatory-assessment model that may alleviate the problem of misalignment and so prevent regulatory arbitrage.
Highlights
IntroductionSince the dawn of the new constitutional supremacy, untold pieces of legislation have been promulgated
Since the dawn of the new constitutional supremacy, untold pieces of legislation have been promulgated. This led to an increase in legal and regulatory measures which increased the compliance burden, compliance risk and cost of businesses in South Africa, in the financial sector
It further highlights the incidence of misalignment among different pieces of legislation with possible negative effects, using the Consumer Protection Act (68 of 2008) and the insurance industry as a case study
Summary
Since the dawn of the new constitutional supremacy, untold pieces of legislation have been promulgated. This led to an increase in legal and regulatory measures which increased the compliance burden, compliance risk and cost of businesses in South Africa, in the financial sector. The objective of this note is to provide a snapshot of the increasing compliance burden on the financial sector between 1996 and 2011. It further highlights the incidence of misalignment among different pieces of legislation with possible negative effects, using the Consumer Protection Act (68 of 2008) and the insurance industry as a case study. The author examines the generally accepted goals of good regulation and argues for an appropriate regulatory-assessment model that may alleviate the problem of misalignment and so prevent regulatory arbitrage
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