The South African financial sector is modern, complex, and made up of multiple role-players,
services and products. The consumer credit section is in itself a complex part of the overall sector.
The monetary value of the South African credit sector is in the estimated billions, there are multiple
forms of credit extension, and the sector serves diverse consumer communities – ranging from
poverty-stricken participants who use credit to purchase food, to participants who use credit to
create better futures through education, starting businesses and accessing products such as cars and
Regulators – created to ensure the proper functioning of the financial sector – are designed to be
expert, independent institutions with considerable responsibilities. Internationally, independence
has featured prominently as a desired character for market conduct regulators of the consumer
financial sector. The empowerment of regulators in line with their mandates has culminated in a
corresponding requirement for proper accountability measures.
In South Africa, the policies underlying the creation of the market conduct regulator for the broad
financial sector created in the style of the Financial Sector Conduct Authority were inclusive of
enhanced independence and accountability. The National Treasury cited international best practices
as foundations for the attention to independence and accountability. Likewise, the National Credit
Regulator, created to regulate the consumer credit industry as a specialist regulator, is statutorily
endowed with independence and the underlying policy clearly envisioned it as an entity that must
The research question for this thesis is whether the market conduct regulators for the consumer
credit market in South Africa are indeed independent and accountable as initially envisaged.
Although the policy drafters and legislators marked the National Credit Regulator and the Financial
Sector Conduct Authority as independent and accountable, the research indicates that these are two
complex concepts underscored by multi-disciplinary theoretical considerations.
This thesis firstly studies the features of a financial system that affect independence and
accountability of market conduct regulators. South African literature on the prevalence of
independence and accountability of regulators is scarce and even more so where financial regulators
are the objects of scrutiny. The South African position could not be analysed in a meaningful way
without first extrapolating the factors that affect the independence and accountability of financial
market conduct regulators from existing literature. Secondly, the thesis assesses the presences, and
absences, in the South African system against the identified mechanisms that enhance independence
and accountability in foreign jurisdictions, or in the opinions of international commentators. The
ultimate purpose of the thesis is to ascertain the manners in which the South African regime can be enhanced to align with international best practices and potentially viable options sourced from
foreign jurisdictions and international scholarship.
Two specific aspects are taken into account. Firstly, absolute independence and absolute
accountability are, according to the research conducted, not the intended outcomes. Secondly, the
various features affect each other and the system as a whole, meaning that the combined as opposed
to isolated impact is important. I determine whether the combination of features results in a
sufficient degree of independence and accountability, considering the effect that features of
independence has on features of accountability and vice versa. The ultimate purpose is to
recommend remedial steps that can be taken to ameliorate the current framework in order to
enhance the independence and accountability of South African market conduct regulators.
The core research theme is the independence and accountability of National Credit Regulator and
the Financial Sector Conduct Authority as the market conduct regulators for the consumer credit
industry in South Africa. A proper analysis of the independence and accountability measures
currently in place for the two regulatory bodies referred to above, indicates that statements to effect
independence and accountability are mere lip service and insufficient without the deliberate
incorporation of multiple features to support a structured arrangement for independence and
accountability. The South African position, as it currently stands, is found wanting when compared
to international benchmarks for independence and accountability. The contribution of the thesis lies
not only in its extrapolation of factors that are relevant for the South African financial sector
regulators and its evaluation of the South African position against these factors, but also in its
remedial recommendations to enhance the prevailing regime.