The Bill That Wants South Africa’s Financial Sector to Clean Up Its Act
No fluff. Just the facts. COFI in plain English.
07 January 2026
If “COFI” has started popping up in board meetings, compliance discussions, and industry webinars, you’re not imagining it. The Conduct of Financial Institutions Bill (the COFI Bill) is intended to fundamentally reshape how financial institutions treat customers across South Africa’s financial services landscape.
Rather than continuing with a fragmented, sector-by-sector approach, COFI aims to introduce a single, consolidated conduct framework governing how financial institutions behave toward customers.
Before diving in, one important reality check: COFI is still a Bill. It is not yet law. It will only become enforceable once it has passed through Parliament, been signed into law, and supported by the necessary regulations and conduct standards.
That said, its direction of travel is clear, and the implications are significant.
Why COFI Exists: What Is It Trying to Fix?
COFI is a cornerstone of South Africa’s Twin Peaks regulatory reform model. In simple terms, Twin Peaks separates financial regulation into two key questions:
- Is the institution financially sound? (Prudential regulation)
- Is the institution behaving fairly toward customers and the market? (Market conduct regulation)
COFI sits squarely within the second question. Its focus is market conduct, how financial products are designed, marketed, sold, administered, and serviced, and whether customers are treated fairly in practice, not just on paper.
The “Umbrella” Shift: One Conduct Framework
One of COFI’s most significant changes is consolidation. The Bill is designed to bring multiple conduct-related requirements under a single framework, replacing or absorbing a range of existing, industry-specific conduct laws.
This does not necessarily mean less regulation. Instead, it points to regulation that is:
- More unified
- More outcomes-focused
- Easier to apply consistently across products and channels
For institutions, this means preparing for a remapped rulebook that speaks with one voice.
Who Will Be Affected? (Short Answer: Almost Everyone)
COFI applies broadly to “financial institutions” as defined under the Financial Sector Regulation Act framework.
This includes:
- Financial product providers
- Financial services providers
- Any person or entity licensed (or required to be licensed) under financial sector laws
The scope is intentionally wide. It spans:
- Investments, insurance, retirement products, deposits
- Advice, distribution, administration, custody, payment services
- Debt collection, investment management, and corporate advisory services
If your business model touches customers’ money, risk, savings, retirement, payments, or financial advice, COFI is aimed at you.
“COFI Is Coming”… But Where Is It Actually Now?
Headlines have sometimes moved faster than reality.
- First draft published: December 2018
- Second draft published: September 2020
- Since then: ongoing work by National Treasury and regulators to finalise the Bill and supporting framework
The real strategic question for decision-makers is this:
Will your organisation treat COFI as a future compliance exercise, or as a present-day strategic programme?
That choice will largely determine how disruptive, or manageable, the transition becomes once implementation timelines are confirmed.
The Real Shift: From Rules to Outcomes
Two changes under COFI are particularly important for operational readiness.
1. Treating Customers Fairly Becomes Enforceable
COFI is intended to hard-wire fair customer outcomes into enforceable legal obligations. This moves “fair treatment” from policy language into a supervisory standard.
Regulators will increasingly ask for evidence, not intention.
2. Licensing Becomes More Activity-Based
COFI reflects a stronger activity-based regulatory approach. Institutions should be able to clearly map:
- What activities they perform
- Who performs them
- For whom
- Through which channels
This mapping will directly inform licensing, governance, and compliance expectations.
A Practical COFI Readiness Checklist (No Drama Required)
Even before enactment, there are sensible steps organisations can take now:
- Monitor and participate in formal consultation processes
- Map business activities against an activity-based licensing model
- Review governance structures, key persons, and oversight frameworks
- Pressure-test customer outcomes:
- Disclosures
- Complaints handling
- Post-sale barriers
- Switching and termination processes
- Communication clarity
- Review remuneration structures and conflicts of interest
- Assess systems and reporting for outcomes-based supervision
- Strengthen transformation planning with measurable implementation steps
These steps add value regardless of timing.
The Takeaway
COFI is not just another compliance project.
It represents a structural shift toward:
- Consistent conduct standards
- Measurable customer outcomes
- A clearer, activity-based view of financial services regulation
The institutions that will succeed under COFI are those that can tell a simple, provable story:
“We sell the right products to the right customers, for the right reasons — and we can prove it.”
Contact Us
If you would like assistance assessing your organisation’s COFI readiness, reviewing governance frameworks, or preparing for upcoming regulatory changes, please contact Mc Kelvey Inc. for professional legal guidance.
Disclaimer
The information published in this article is provided for general informational purposes only and does not constitute legal advice. While every effort is made to ensure accuracy, laws and regulatory guidance may change, and the content may not reflect the most recent developments.
You should not act, or refrain from acting, on the basis of this information without obtaining legal advice tailored to your specific circumstances. Mc Kelvey Inc. accepts no liability for any loss or damage arising from reliance on this content.