The Financial Services Board’s (FSB) chairperson, Ms Gill Marcus, says a major challenge facing South Africa’s financial markets is maintaining and improving its competitiveness.

In her review of the FSB’s Annual Report, Marcus says only improvements in competitiveness and efficiency will retain and increase trading activity in SA’s markets.

“South Africa’s strong financial infrastructure and relatively low costs present numerous opportunities to develop our markets into an attractive and viable regional financial centre.

“Substantial progress has been made in developing new legislation to address critical issues regarding consumer education, enforcement and modernization.”

Marcus says the environment in which the corporate sector operates, demands constant attention and strengthening.

“The recent spate of alleged incidents of insider trading dent the credibility of our corporate culture and harm the country’s reputation in the marketplace. Some corporate incentive schemes and share options have raised eyebrows, and rightly so.

“The quality of financial information provided on publicly listed companies does not meet the expectations of the investing public. We must embrace best practice, particularly regarding disclosure requirements, corporate governance practices, accounting and legal standards.”

In line with transparency, the FSB has disclosed its executive officer’s remuneration. It was felt that if the FSB wants the industry to disclose, it must lead by example. The Annual Report shows that for the period 1 July 2000 until 31 March 2001, executive officer Jeff van Rooyen’s gross remuneration was R848 755.

Marcus adds that the rising number of unregulated and illegal operators in the insurance sector robbed the less sophisticated and mostly poor of their money and increased the insurance industry’s exposure to reputational risk.

“The FSB remains extremely concerned about abuse in the mushrooming funeral insurance business, while the number of lapsed and surrendered policies requires attention.

“Consumer education is a focus area for the FSB. While one cannot stop investors from making wrong decisions, no effort should be spared towards helping consumers make informed decisions. The new Policyholder Protection Rules, new legislation relating to greater disclosure and a comprehensive consumer education campaign will form part of the FSB’s programme to create greater awareness among the wider public.”