ASISA: Regulatory Overlap Compliance Costs Rise in South Africa

• ASISA has urged the South African government to adopt a unified regulatory approach to transformation, warning that overlapping frameworks increase compliance costs without improving outcomes.
• The 2026 ASISA Industry Transformation Report highlights that seven regulatory authorities have introduced ten distinct transformation frameworks in the past five years, creating policy friction alongside the Financial Sector Code.
• Specific concerns were raised regarding the dtic’s proposed Transformation Fund, currently in draft policy form, National Treasury’s Draft General Public Procurement Regulations, and reforms from the Departments of Employment and Labour, and Higher Education and Training.
• While the financial sector has exceeded equity ownership targets since 2017, transformation at board, executive, and senior management levels remains a primary operational hurdle due to a limited talent pool.
• ASISA emphasizes that transformation is a strategic imperative and calls for government partnership, data-driven policy, and practical, aligned regulations to achieve inclusive and sustainable economic growth.

ASISA members do not perceive transformation as an obligation, but rather as a strategic imperative that strengthens their operations, benefits clients, and ultimately stimulates economic growth.

The Association for Savings and Investment South Africa (ASISA) has urged South African government authorities to adopt a unified and collaborative strategy for regulatory policy, cautioning that a fragmented landscape marked by overlapping frameworks risks escalating compliance costs without genuinely advancing transformation objectives. This significant appeal coincided with the release of the Association for Savings and Investment South Africa's 2026 Industry Transformation Report, aptly titled "Transformation that Works: Evidence, Impact and the Road Ahead." This annual publication meticulously tracks eight years of progress achieved under the amended Financial Sector Code (FSC), encompassing the performance of member firms that collectively manage 98% of life office assets under management (AuM) and 83% of asset management AuM in South Africa. The report underscores a critical concern for financial institutions: the growing burden of ASISA regulatory overlap compliance costs South Africa faces.

The report highlights a concerning trend over the past five years, where seven distinct regulatory authorities have introduced ten separate frameworks designed to promote transformation. This proliferation of regulations has generated considerable policy friction, operating in parallel with the already established amended Financial Sector Code. ASISA specifically raised alarms regarding the potential unintended consequences stemming from four key state interventions. These include the dtic’s proposed Transformation Fund, currently in draft policy form, National Treasury’s Draft General Public Procurement Regulations, the Department of Employment and Labour’s employment equity reforms, and the Department of Higher Education and Training’s Skills Development Reform Programme. Kaizer Moyane, CEO of ASISA, articulated the industry's position on South Africa financial regulation alignment, emphasizing that ASISA members do not perceive transformation as an obligation, but rather as a strategic imperative that strengthens their operations, benefits clients, and ultimately stimulates economic growth. He called upon the government to engage with the industry as partners in the transformation journey, leveraging the insights of those responsible for implementation to craft rules that are practical, coherent, achievable, and thoroughly researched.

Despite the challenges posed by regulatory complexity, the 2026 report presents encouraging data regarding structural advancements in equity ownership within the financial sector. Since the amended Financial Sector Code was introduced in 2017, ownership levels have consistently surpassed statutory targets. However, the report also identifies a significant operational hurdle: transformation at the board, executive, and senior management levels. Lister Saungweme, ASISA’s senior policy advisor for Transformation, Skills Development and Education, clarified that these persistent difficulties are not indicative of a lack of commitment to transformation. Instead, they arise from a limited availability of suitably qualified candidates for specialized roles and the extensive timelines required to cultivate a robust pipeline of skilled Black professionals. This structural talent challenge underscores the need for a more aligned approach to transformation initiatives, mitigating the impact of disparate frameworks like the dtic’s proposed Transformation Fund, currently in draft policy form.

In his concluding remarks, Kaizer Moyane stressed the indispensable role of credible, independently verified data in shaping national policy and safeguarding the progress made. He acknowledged that the overall pace of transformation remains a national challenge for South Africa. Moyane presented the report as a comprehensive record of the financial industry's achievements within this context, alongside an honest assessment of the work that still lies ahead for ASISA members. Fundamentally, the report serves as a constructive contribution to the ongoing national dialogue on how South Africa can most effectively accelerate transformation and achieve more inclusive and sustainable outcomes. The industry's call for South Africa financial regulation alignment is central to navigating the complexities and ensuring that compliance costs do not impede genuine progress.

Lawyers and compliance officers in South Africa's financial sector should monitor government efforts to harmonize transformation policies, as ASISA warns that current regulatory overlap risks increasing compliance costs and creating policy friction. This impacts strategic compliance planning and risk assessment for financial institutions navigating multiple B-BBEE and transformation frameworks.

Source: Original reporting via the provided source material.