What South Africa's biggest regulatory shake-up in two decades means for your practice, and your clients.
For eight years, COFI has been on the horizon, close enough to take seriously, far enough to defer. That calculation has changed. The Bill has now cleared Cabinet and is formally before Parliament, moving the conversation from "what might happen" to "what you need to do." Here's where things stand, and what it means for your practice right now.
The Conduct of Financial Institutions (COFI) Bill isn't just another compliance exercise. It is the most significant reimagining of how financial services are regulated in South Africa since the FAIS Act. Whether you run a large multi-adviser practice or a boutique advisory business, if you hold an FSP licence, COFI will reshape how you operate, how you are paid, how you are licensed, and ultimately, what your clients expect of you.
The Conduct of Financial Institutions Bill, known as COFI, has been in development for over a decade, first published for public comment in December 2018. It was born out of South Africa's Twin Peaks regulatory reform, itself a direct response to the 2008 global financial crisis, which exposed significant gaps in market conduct oversight.
In simple terms, COFI will consolidate and replace a sprawling web of industry-specific legislation, including the FAIS Act, the Long-term Insurance Act, the Short-term Insurance Act, the Collective Investment Schemes Control Act, and several others, into one unified conduct framework. The Financial Sector Conduct Authority (FSCA) will be empowered to issue binding conduct standards across all sectors under a single legislative umbrella.
After years of delays, the COFI Bill cleared a decisive milestone: Cabinet approved the Bill for submission to Parliament at its meetings of 25 March and 1 April 2026. Finance Minister Enoch Godongwana then gave formal notice in the Government Gazette of the Bill's introduction to the National Assembly.
The Bill is currently being scrutinised by the Office of the Chief State Law Adviser before formal introduction. Once tabled, it will go through committee scrutiny, public hearings, and debate before being sent to the President for assent. Full implementation, including the processing of new activity-based licences, is expected to take until 2029 or 2030.
FSCA Commissioner Unathi Kamlana has been unambiguous: "COFI Bill is the reality of how the financial sector in South Africa will be regulated, certainly from a conduct perspective, so it’s not going away."
Here’s where it gets real. COFI is not a back-office compliance issue. It touches every dimension of how you advise, how you structure your practice, and how you position yourself with clients.
1. From tick-box to principles-based compliance
Under FAIS, advisers have largely operated in a rules-based environment, follow the checklist, meet the requirements, done. COFI fundamentally shifts this. Instead of prescriptive rules, COFI sets broad principles, and you will be expected to demonstrate that your processes and business culture deliver the outcomes those principles require. The FSCA will test you on delivery, not documentation alone.
This is both liberating and demanding. Practices that have genuinely embedded the Treating Customers Fairly (TCF) principles over the past two decades will adapt with relative ease. Those who have treated compliance as a box-ticking exercise will find themselves exposed.
What’s in it for you, the adviser? If your advice process already puts the client first, not just on paper, but in practice, COFI rewards that. It becomes a competitive differentiator, not just a regulatory obligation.
2. Re-licensing: everyone starts fresh
All FSPs will need to apply for new licences under COFI's activity-based licensing model. Rather than being licensed as a 'financial services provider' broadly, licences will be granted per specific activity, financial advice, investment management, distribution, administration, and so on. The FSCA has acknowledged this will be a 'mammoth task', with the migration of existing licences projected to keep the regulator busy for years.
The practical implication? You need to start mapping your activities now. Know exactly which COFI-defined activities your practice performs, and ensure your governance structures, key person arrangements, and fit-and-proper requirements are already aligned.
3. Capital requirements: are you adequately resourced?
COFI introduces a more onerous capital adequacy standard. Practices will need to demonstrate they are sufficiently capitalised to cover 'the risks to which they are exposed or likely to be exposed in the future.' This is a material shift from current requirements and is likely to accelerate consolidation among smaller or under-capitalised practices.
Advisers who partner with well-capitalised, institutionally-backed platforms are better positioned to meet this requirement without carrying the full capital burden themselves.
4. Transformation: no longer optional
COFI gives the FSCA meaningful powers to drive transformation in the financial services sector. Practices with an annual turnover exceeding R10 million will be required to have a transformation plan that targets at least a Level 4 B-BBEE contributor status.
Failure to demonstrate progress could result in substantial fines, and product providers will themselves be scored on their procurement spend from transformed businesses, creating indirect commercial pressure throughout the value chain.
5. Distribution and remuneration: greater transparency ahead
The FSCA has signalled that elements of the Retail Distribution Review (RDR) will be embedded through COFI conduct standards. While the fine print is still being debated, advisers can expect closer scrutiny around who they represent, how they are remunerated, and how that remuneration aligns with client outcomes. Being transparent about your fee model today is not just good practice, it’s COFI-readiness in action.
For South African investors and financial services consumers, COFI represents a significant step forward in protection and accountability. Here is what they can expect:
Put simply: your clients are going to know more, expect more, and be protected more. That raises the bar for every conversation you have.
It would be easy to read COFI as purely a compliance burden. The more honest reading is that it is a market-shaping event, and like all such events, it will reward the prepared and disadvantage the complacent.
Historical precedent supports this. When FAIS was introduced, the adviser market contracted as those unwilling or unable to meet the new standards exited the industry. Those who remained not only survived but gained market share. COFI is likely to produce a similar consolidation effect, and with it, a significant opportunity for advisers who move early.
The advisers who thrive post-COFI will be those who today are building the systems, partnerships, and governance structures that tomorrow's regulation demands. This is your window to separate yourself from the crowd.
This is also precisely where your choice of platform partner matters. A future-fit investment platform, one that’s Purpose-built and Adviser-inspired, doesn’t just help you manage portfolios. It provides the operational infrastructure, compliance frameworks, and technology backbone that COFI-aligned advice delivery requires. Platforms that are digital-first, built around how advisers actually work, and backed by institutional compliance expertise become a genuine competitive advantage in a COFI world.
COFI is now formally before Parliament. The direction is set and the clock is ticking. Here is where to focus your energy:
COFI is not an obstacle to great financial advice. It’s a framework designed to ensure that great financial advice is consistently delivered, rigorously documented, and meaningfully regulated. For advisers who are already doing the right thing by their clients, building long-term relationships, delivering objective recommendations, operating transparent businesses, COFI simply formalises what you have always stood for.
The question is not whether COFI will affect you. It will. The question is whether you are positioned to meet it as a competitive advantage or as a compliance crisis.
At INN8, we believe that regulatory clarity, when met with the right platform infrastructure, becomes a springboard for better advice, not a barrier to it. Our platform is Purpose-built for exactly this environment: an Adviser-inspired, digital-first investment platform that simplifies complexity, strengthens compliance, and keeps the focus where it belongs, on your clients' outcomes.
It's a perspective shared by INN8's own Mike Mulder, who unpacked the real-world implications of COFI for advisers in the recent Digital Lowdown webinar, a session that brought together the convergence of AI, regulation, and the future of financial advice.