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Treating Customers Fairly: Roadmap

The Financial Services Board (FSB) has on 31 March 2011 published a Roadmap for its Treating Customers Fairly (TCF) initiative.  TCF is a programme for regulating the market conduct of financial services firms.  It seeks to ensure that fair treatment of customers is embedded within the culture of regulated firms.  TCF will use a combination of market conduct principles and explicit rules to drive the delivery of clear and measurable fairness outcomes.  It will also enforce the delivery of these outcomes through imposing visible and credible deterrents to unfair treatment.

Why TCF?

The asymmetry of information between retail financial services consumers and financial institutions, and the inadequate financial literacy levels of many South Africans, means that financial services consumers are particularly vulnerable to unfair treatment.  Existing financial sector regulation includes various measures aimed at protecting consumers, but a holistic and co-ordinated consumer protection regulatory framework – that applies consistently across the financial services sector and is tailored to address the market conduct risks peculiar to the sector – has been lacking.  Against this background, in April 2010, the Financial Services Board (FSB) published a discussion document entitled Treating Customers Fairly. After a review of feedback received, the TCF Roadmap confirms the commitment of the FSB to the TCF programme by setting out its approach to implementation. The TCF programme is also positioned as a key component of the FSB’s broader consumer protection and market conduct mandate, as endorsed in National Treasury’s recently published policy statement on strengthening financial sector regulation: A Safer Financial Sector to Serve South Africa Better.

The desired outcomes of TCF

TCF is a regulatory approach that seeks to ensure that specific, clearly articulated fairness outcomes for financial services customers are demonstrably delivered by regulated financial institutions.  These outcomes are:

· Outcome 1: Customers are confident that they are dealing with firms where the fair treatment of customers is central to the firm culture.

· Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified customer groups and are targeted accordingly.

· Outcome 3: Customers are given clear information and are kept appropriately informed before, during and after the time of contracting.

· Outcome 4: Where customers receive advice, the advice is suitable and takes account of their circumstances.

· Outcome 5: Customers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and what they have been led to expect.

· Outcome 6: Customers do not face unreasonable post-sale barriers to change product, switch provider, submit a claim or make a complaint.

TCF will require regulated firms to consider their treatment of customers at all stages of their relationship with the customer, from product design and marketing, through to the advice, point-of-sale and after-sale stages. Firms will be required to demonstrate – through management behaviours, measures and monitoring – that they are consistently treating customers fairly throughout these stages.  Ultimately, successful delivery of these outcomes will ensure that customers’ financial services needs are appropriately met through a sustainable industry.

The TCF Roadmap

The Roadmap explains the principles and processes the FSB will follow in implementing TCF and sets out a timeline – spanning approximately three years – for delivery of key TCF milestones.  The process will entail the development of appropriate regulatory and supervisory frameworks to deliver TCF, including extensive engagement with other relevant regulators, the financial services industry and other stakeholders.  The Roadmap also provides the FSB’s responses to feedback received on the earlier TCF discussion document.  Treating Customers Fairly: The Roadmap is available on the Financial Services Board’s website,

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