On 17 April 2026, the National Treasury published a notice in the Government Gazette announcing the introduction of the Conduct of Financial Institutions Bill, 2026 (COFI) in the National Assembly (NA) in terms of rule 276(1)(b) and (c) of the Rules of the NA.
In terms of rule 276(1)(b) and (c), a bill may be introduced in the NA only if (i) prior notice of its introduction has been given in the Government Gazette; and (ii) an explanatory summary of the Bill, or the draft Bill as it is to be introduced, has been published in the Government Gazette.
Overview of the explanatory summary of COFI
The explanatory summary states the following in relation to the Bill:
- Regulatory framework and compliance: COFI aims to establish a unified regulatory framework for the conduct of financial institutions, supervised entities, and representatives, including requirements relating to compliance arrangements.
- Representatives and governance: COFI intends to regulate the appointment and debarment of representatives, set out business conduct principles, and prescribe governance obligations for governing bodies.
- Transformation: COFI requires financial institutions to develop and implement plans promoting the transformation of the financial sector in line with the B-BBEE Act.
- Fitness and consumer protection: COFI seeks to impose fitness and propriety requirements on key persons and to set specific obligations for institutions serving retail and small enterprise customers.
- Advertising, disclosure, and financial soundness: COFI establishes principles for advertising, information disclosure, the handling of trust property and funds, and financial soundness and operational requirements.
- Reporting, insurance conduct, and authority powers: COFI seeks to address reporting, accounting, and audit matters; prescribe insurance conduct requirements; and empower the Financial Sector Conduct Authority (FSCA) to set conduct standards, create offences, and provide for regular reviews of the Act.
- Licensing, recovery, and exit: COFI introduces consolidated frameworks for licensing, recovery and exit of financial institutions, the recognition of equivalent foreign jurisdictions, and requirements for credit rating agencies, collective investment scheme managers, friendly societies, and statutory ombuds.
- Repeals and savings: Repeal and amend certain financial sector laws, including the Financial Sector Regulation Act, 2017, to enhance the FSCA's functions. It will also repeal certain financial sector laws and provide for savings provisions and amendments to such legislation.
Overview of the process for a Bill to become a law
Broadly speaking, the following process is followed in relation to the passage of a Bill:
Step 1 - Prior to introduction, the relevant government department must obtain Cabinet approval for the draft Bill. The State Law Advisers must then certify the draft Bill, following which the relevant Minister submits a copy to the Speaker of the NA and the Chairperson of the National Council of Provinces (NCOP).
Step 2 - Upon introduction, the Bill is referred to the Joint Tagging Mechanism (JTM) for classification into one of four constitutional categories (section 74, 75, 76 or 77 Bills).
Step 3 - The Bill is then referred to the relevant Portfolio Committee for consideration, which may include public hearings and amendments. The Portfolio Committee submits the Bill, together with a report, to the NA for debate and a vote.
Additionally, Parliament almost always receives written submissions before the Bill is considered by the Portfolio Committee. The Portfolio Committee then often also allows for oral submissions.
Step 4 - If the NA passes the Bill, it is referred to the NCOP, which may pass, amend, or reject the Bill. Where the NCOP proposes amendments or rejects the Bill, prescribed procedures apply.
Step 5 - Once passed by both Houses, the Bill is referred to the President for assent. The President may refer the Bill back to the NA if there are reservations regarding its constitutionality.
Once assented to and signed, the Bill becomes an Act of Parliament and must be published in the Government Gazette.
At which stage is COFI and where is it going?
COFI is currently at the stage where the Bill has just been introduced into the NA, being the first step in the formal parliamentary process.
The next step is that, after the first formal "reading" of the Bill (which serves the purpose of placing the Bill on the NA's agenda), the Bill will be allocated to the relevant portfolio committee. In this case, it is likely to be the Finance Portfolio Committee.
Some Bills are published for comment at the introductory stage (ie as part of step 1), but a Bill is usually published for public comment once it is referred to the Portfolio Committee as part of step 3.
The Portfolio Committee will consider whether publication for public comment is necessary. However, if a Bill has a material impact on the public or an industry, as may be the case with COFI, a call for public comment would be required in accordance with the NA's constitutional obligation to facilitate public involvement in the legislative process. Therefore, it is likely that COFI may soon be published for comment.
What must financial institutions do in the meantime?
Although COFI is still in the early stages of the parliamentary process, there are several practical steps that financial institutions can start taking now to support early readiness. These include:
Monitor and participate in formal consultation processes once COFI is introduced to Parliament.
Map existing activities to prepare for the activity‑based licensing model.
Develop compliance frameworks aligned with COFI’s principles.
Consider Retail Distribution Review principles as part of early readiness planning
For practical guidance and detailed recommendations on preparing for COFI, download our comprehensive COFI Readiness Guide here.
