Board (FSB)
15 March 2006
The Deputy Minister of Finance, Mr Jabu Moleketi, today expressed serious
concern about the threat by participation bond scheme Fedbond to sue the
Financial Services Board (FSB) unless the regulator abandons its Supreme Court
appeal of application to place Fedbond under curatorship.
Such a threat goes against the basic principles of financial regulation. All
financial service providers, including a collective investment scheme such as
Fedbond, operate under a licence that is conditional on the provider meeting
certain requirements as set out in legislation. This is critical to ensuring
that investors can place their ongoing trust in the integrity of the South
African financial sector.
Any financial service provider that is deemed not to have met these
standards of trustworthiness cannot be allowed to manage the publicâs money. If
in the regulatorâs view the prescribed norms have not been adhered to, then it
is the regulatorâs statutory responsibility to protect the interests of
investors. Any notion that a financial services provider can sue the regulator
under these circumstances is fundamentally flawed.
The Deputy Minister has no reason to believe that the FSB has not acted at
all times solely in the interests of investors in this matter and regards the
threat by Fedbond as irresponsible and undermining of the regulatory function
of the FSB.
For queries contact:
Thoraya Pandy
Cell: 082 416 8416
Issued by: Ministry of Finance
15 March 2006
