Hon House Chair, the Financial Markets Bill, which aims to update the regulation and supervision of securities services, will replace the existing Securities Services Act, which came into effect in 2005. Instead of introducing a raft of complex amendments, the Treasury decided to draft an entirely new Bill in the interests of simplicity and legal certainty, and we do support that, as the chairperson of the committee indicated.
A review of existing regulations highlighted a number of critical provisions that must be given effect to in legislation, to ensure that the integrity of the regulatory framework of South African financial markets is maintained. This is an effort to provide greater transparency in respect of prices, information and other elements of over-the-counter derivatives markets. This is indeed much-needed regulation.
As a member of the G20, South Africa is also committed to the recommendations, to ensure that there are measures in place to mitigate any future financial crises that may arise. The Bill promotes the protection of regulated persons and clients; reduces systemic risks; and promotes competition in securities services and international competitiveness.
On market abuse, new defences and offences have been introduced to deal with insider trading, and that is also very important. As the hon Harris has indicated previously, in the process going forward in 2013 the twin- peaks architecture Bill will establish a new market conduct regulator, shifting prudential regulation to the Reserve Bank. We have concerns that the tabling of the Financial Markets Bill may be putting the cart before the horse, as there is a strong case to be made that the twin-peaks Bill should have been the first in the sequence.
The DA proposed several additional amendments to the Bill, including adding a commitment to the promotion of competition to the objects of the Act, which underplay the role of competition in financial regulation. We have to realise that there is an inherent balance between the promotion of competition and the preservation of stability in financial regulation. But the current Bill stopped short of highlighting the promotion of competition in the objects.
Despite these concerns, the Bill will add significant value to the financial sector. We also recognise that the issues listed above are relatively marginal and that the Bill is an improvement on our existing legislation. Thank you.