28 June 2016

Reminders – 09 July 2019

Posted on 9 Jul 2019

Continuous Professional Development (CPD) CPD Exemption FSPs, KIs and Reps that are making use of the CPD exemption which the FSCA afforded for the 2018 CPD cycle are reminded that the deadline to comply with the required number of CPD hours is 31 July 2019. Planning for the 2019/2020 CPD cycle The current CPD cycle … Continued

New FSCA appointment – Divisional Executive: Conduct of Business Supervision

Posted on 9 Jul 2019

The Financial Sector Conduct Authority (FSCA) recently announced the appointment of Ms. Kedibone Dikokwe as the Divisional Executive: Conduct of Business Supervision which took effect from 1 July 2019. The Conduct of Business Supervision is the division that supervises the way financial institutions interact with their customers. In this role Ms. Dikokwe will oversee the … Continued

Determination of form and manner of section 19(3) Auditor Report

Posted on 9 Jul 2019

FSPs that hold money or assets on behalf of clients are required, in terms of section 19(3) of the FAIS Act, to maintain full and proper monthly accounting records in respect of such money or assets. They are also required to submit a separate auditor report to the FSCA together with the annual financial statements. … Continued

Reminders – 25 June 2019

Posted on 25 Jun 2019

Annual Financial Statements A final reminder to all FSPs whose financial year end was 28 February 2019 to ensure that their annual financial statements are submitted to the FSCA by 30 June 2019. FSPs which are required to submit Annexure A (FAIS Notice 82 of 2015) together with their Annual Financial Statements, are reminded to … Continued

Guidance Notice on Debarment Process

Posted on 25 Jun 2019

The FSCA recently published Guidance Notice 1 of 2019: Debarment Process which provides general guidance on the application of section 14, the debarment process, of the Financial Advisory and Intermediary Services (FAIS) Act, 2002. The notice provides guidance on the rationale to be applied and process to be followed by Financial Services Providers (FSPs) when … Continued

The importance of the Due Diligence process

Posted on 25 Jun 2019

According to the principles of Treating Customers Fairly (Outcome 2), products and services in the retail market, which are sold and marketed, must be designed according to the needs of the customers identified and targeted accordingly. When designing or creating a product, the outcome for the end user must always be considered. While this is … Continued

FSCA publications on Continuous Professional Development

Posted on 11 Jun 2019

The Financial Sector Conduct Authority (FSCA) recently published two notices on Continuous Professional Development (CPD). These are: FSCA Communication 2 of 2019 (FAIS) – Continuous Professional Development (CPD) FSCA FAIS Notice 40 of 2019: Exemption from Continuous Professional Development Requirements, 2019 – No. 2 of 2019 General CPD Guidance The FSCA Communication 2 of 2019 … Continued

Draft Conduct Standard: Minimum Skills and Training Requirements for Board Members of Pension Funds

Posted on 11 Jun 2019

The Financial Sector Conduct Authority (FSCA) recently published a Draft Conduct Standard which prescribes the minimum skills and training requirements for board members of pension funds. The proposed Conduct Standard is set to take effect on 1 January 2020. Submissions on the draft Conduct Standard must be sent to the FSCA at MinimumSkillsandTraining@fsca.co.za by 4 … Continued

Continuous Professional Development – Planning ahead for the new FSCA CPD Cycle

Posted on 11 Jun 2019

Besides being a regulatory requirement, Continuous Professional Development (CPD) ensures that you continue to be competent in your profession. Training and learning increases confidence, overall capability, complements career aspirations and the ability to adapt positively to changes in industry requirements. The annual deadline date for FSPs, Key Individuals (KIs) and Representatives (Reps) to comply with … Continued

Annual Financial Statements and Extensions

Posted on 28 May 2019

All FSPs whose financial year end was 28 February 2019 must ensure that their annual financial statements are submitted to the FSCA by 30 June 2019. FSPs which are required to submit Annexure A (FAIS Notice 82 of 2015) together with their Annual Financial Statements, are reminded to do so. Where an FSP is not … Continued

Exemption from CPD Requirements

Posted on 28 May 2019

On 17 May 2019, the Financial Sector Conduct Authority (FSCA) published FAIS Notice 35 of 2019: Exemption from Continuous Professional Development Requirements which sets out an Exemption from Continuous Professional Development (CPD) requirements. The FSCA also published an Explanatory Note: Exemption from Continuous Professional Development Requirements together with the Exemption Notice which explains the background … Continued

Commencement of FSRA Ombud provisions deferred

Posted on 28 May 2019

Government Notice 657 of 10 May 2019 published in a recent Government Gazette (No. 42454) amended dates in previous Government Notices published (General Notice 142 of 18 March 2019 and Government Notice 1019 of 28 September 2018). Government Notice 657 has the following effects: The commencement date of Chapter 14 (sections 175 to 217) of … Continued

Ensure Annual Financial Statements submitted to the FSCA timeously

Posted on 14 May 2019

All FSPs whose financial year end was 28 February 2019 must ensure that their annual financial statements are submitted to the FSCA by 30 June 2019. Please ensure that your accounting records are sent to your accountants/auditors as soon as possible and that they are on track to meet the deadline. It remains the responsibility of the FSP … Continued

FAIStime: Quarter 4 of 2019

Posted on 14 May 2019

The Office of the Ombud for Financial Services Providers recently published their newsletter: FAIStime Newsletter Quarter 4 of 2019 which focuses on consumer rights and responsibilities towards their respective financial services providers. Some of the topics discussed are: Risk profiling The responsibilities of the insurer, the broker, and consumer in terms of the Long-term and … Continued

Proposed Amendments to Regulations 31 and 32 of the Medical Schemes Act

Posted on 14 May 2019

The Council for Medical Schemes (CMS) recently published CMS Circular 36 of 2019: Amendment to Regulations 31 and 32 of the Medical Schemes Act. Regulation 31 deals with Fees Payable and Regulation 32 deals with Penalties. We have set out all the proposed changes in Table 1. FSPs and their representatives that are approved or … Continued

Joint Guidance Notice 1 of 2019 -Guidance on the application of section 5 of the Insurance Act

Posted on 30 Apr 2019

The Insurance Act prohibits a person from conducting insurance business in South Africa unless that person has been licensed[1]. Although authorised financial services providers (FSPs) are licensed in terms of the Financial Advisory and Intermediary Services Act (FAIS) there may be regulatory consequences if they render financial services in respect of the products of an … Continued

FSCA Position Paper on future Insurance Premiums Collection Framework

Posted on 30 Apr 2019

In December 2018 the FSCA published FSCA Communication 2 of 2018: Update on the future of the premium collection regulatory framework under the Short- and Long-term Insurance Acts. This communication highlighted the various regulatory interventions being considered to address specific risks inherent in third party premium collection business models. The communication also confirmed that further … Continued

Have you implemented your Competence Register?

Posted on 30 Apr 2019

The ‘new’ Fit and Proper requirements introduced a set of competence requirements that apply to all Financial Services Providers (FSPs), Key Individuals (KIs) and Representatives (Reps).  As the authorised entity, there are several responsibilities imposed on FSPs to ensure that the necessary requirements are met. One of the responsibilities of an FSP, which came into … Continued

The 2018/2019 CPD cycle is ending soon

Posted on 17 Apr 2019

FSPs, KIs and Reps are reminded that the deadline to comply with the required number of CPD hours is 31 May 2019. Masthead offers various CPD accredited seminars and online learning activities on the Masthead Learning Centre.

FIC Directive 5/2019

Posted on 17 Apr 2019

The usage of an Automated Transaction Monitoring System for the detection and submission of regulatory reports to the Financial Intelligence Centre in terms of Section 29 of the Financial Intelligence Centre Act, 2001 (Act no. 38 of 2001) The Financial Intelligence Centre recently published Directive 5 of 2019. This Directive is applicable to all Accountable … Continued

Financial Services Tribunal Rules

Posted on 17 Apr 2019

The Financial Services Tribunal, previously the FSB Appeal Board, published a new set of rules on 29 March 2019. The Financial Services Tribunal Rules (Rules) sets out the rules and procedures to be followed in an application for reconsideration of a “decision” by the “decision-maker” which has been defined in section 218 of the Financial … Continued

Why FSPs should comply with the FSCA’s CPD requirements

Posted on 17 Apr 2019

The new Fit & Proper requirements came into effect on 1 April 2018. FSPs, Key Individuals and Representatives must take note of these new requirements, especially Continuous Professional Development (CPD) as the first annual regulatory CPD cycle comes to an end on 31 May 2019. CPD is applicable to almost all[1] Representatives of FSPs, and … Continued

FICA RMCP deadline – 2 April 2019

Posted on 2 Apr 2019

The deadline to implement a FICA Risk Management and Compliance Programme is here! Accountable institutions are reminded that they must have fully adopted and implemented an RMCP to replace their FICA Internal Rules. Masthead hosts A Practical Guide to developing your own FICA Risk Management & Compliance Programme Seminar where you can learn how to … Continued

Liquidity Calculation Declaration

Posted on 2 Apr 2019

FSPs (CAT II, IIA, and III) required to maintain liquid assets and whose financial year end was 28 February 2019, are required to submit Form A: Liquidity Calculation (Annexure six of BN 194 of 2017) to the FSCA by 15 April 2019 (i.e. 45 days after financial year-end). A juristic rep of either a CAT … Continued

FIC Guidance Notes

Posted on 2 Apr 2019

Following the consultation process for the proposed changes to the Financial Intelligence Centre (FIC) draft guidance notes published during January 2019, the FIC has now considered all commentary received and updated the following FIC guidance notes as published on 26 and 27 March 2019: 1) Guidance Note 4B: on Suspicious and Unusual Transaction Reporting (section … Continued

Key individuals’ monitoring responsibility

Posted on 2 Apr 2019

Most Key Individuals and sole proprietors (Key Individuals) are unaware of the huge responsibility resting on their shoulders, especially in terms of their duty of management and oversight. These responsibilities are increasing with the new principle-based approach to regulation. While the FSP is responsible for establishing and maintaining procedures to be followed to comply with … Continued

FICA RMCP to be implemented by 2 April 2019

Posted on 19 Mar 2019

The requirement to implement a Risk Management and Compliance Programme (section 42 of the FIC Act) came into effect on 2 October 2017, however accountable institutions have been granted some time to implement this. Accountable institutions are reminded that they must have fully adopted and implemented an RMCP by 2 April 2019 to replace their … Continued

Notice for Extension for OTC Derivative Providers

Posted on 19 Mar 2019

The FSCA recently published a notice of extension for the submission period for Over-The-Counter Derivative Providers applications. The extension is until 14 June 2019. Click here to read the Notice for Extension

Avoid risk with a proper review process

Posted on 19 Mar 2019

Your business can avoid multiple risks by having a proper review process in place. By doing so, not only would your FSP be compliant with FAIS legislation, but you could avoid client complaints to the Ombud and reputational damage to your business. Following the correct process, you can also reinforce client relationships and treat customers … Continued

Ensure Accounting Records are submitted to Accountant

Posted on 5 Mar 2019

All FSPs whose financial year end was 28 February 2019 must ensure that their annual financial statements are submitted to the FSCA by 30 June 2019. Please ensure that your accounting records are sent to your accountants/auditors as soon as possible and that they are on track to meet the deadline. It remains the responsibility of the FSP … Continued

FSCA publishes general exemption from regulation 39(3)(a) of the Pension Funds Act

Posted on 5 Mar 2019

The final retirement funds default regulations, made in terms of section 36 of the Pension Funds Act, came into effect on 1 September 2017. The changes introduced by the new default regulations included adjustments to investment portfolios, preservation, portability and annuity strategies for funds. The default regulations came into full effect on 1 March 2019 … Continued

FICA Risk Management and Compliance Programme to be implemented by 2 April 2019

Posted on 19 Feb 2019

Although the requirement to implement a Risk Management and Compliance Programme (section 42 of the FIC Act) came into effect on 2 October 2017, accountable institutions have been granted some time to implement this. Accountable institutions are reminded that they must have fully adopted and implemented an RMCP by 2 April 2019 to replace their … Continued

Compliance Report for Category I FSPs without a Compliance Officer

Posted on 19 Feb 2019

Category I FSPs that do not have a Compliance Officer must submit their Annual Compliance Reports to the FSCA on or before 28 February 2019 in terms of FSCA FAIS Notice 69 of 2018. Should you have any enquiries relating to the submission of the report, please contact the FSCA for assistance on 012 428 … Continued

FSCA Executive Appointments

Posted on 19 Feb 2019

The Financial Sector Conduct Authority (FSCA) recently announced their new executive appointments which took effect from 1 February 2019. These are: Read more in FSCA Press Release: The Financial Sector Conduct Authority appoints new executives

Corporate governance in line with Fit and Proper requirements

Posted on 19 Feb 2019

A governance framework that has a practical overview of your business and treats customers fairly became mandatory for financial service providers (FSPs) when the new fit and proper requirements came into effect on 1 April 2018. As the core of corporate governance, a governance framework comprises the rules and procedures that set out what a … Continued

Category II and IIA Compliance Reports and Assets under Management

Posted on 5 Feb 2019

CAT II and IIA FSPs are required to submit their Bi-Annual Compliance Reports to the FSCA two (2) months after the reporting date. The reporting dates for Category II and IIA FSPs are 30 June and 31 December of each year. The Compliance Reports must, therefore, be submitted to the FSCA by 28 February 2019. … Continued

Consultation documents

Posted on 5 Feb 2019

The Financial Intelligence Centre (FIC) published three Consultation documents during January 2019: 1. Draft Guidance Note 4B This document deals with Reporting of suspicious and unusual transactions and activities in terms of Section 29 of the Financial Intelligence Centre Act (FICA). The FIC proposes to update the existing guidance by including: Section 29(1)(b)(iv) relating to … Continued

FSCA Bulletin – Quarter 2: 2018/19

Posted on 5 Feb 2019

The FSCA Bulletin released for Quarter 2 2018/19 focuses on various regulatory topics, warnings, events, and consumer education within the financial industry. Some of these include a focus on FinTech (Financial Technology). The South African Reserve Bank (SARB) recently decided to establish a broader Fintech program aimed at reviewing the emergence of FinTech and assessing … Continued

Compliance Report for Category I FSPs without a Compliance Officer due by 28 February 2019

Posted on 22 Jan 2019

Category I FSPs that do not have a Compliance Officer must submit their Annual Compliance Reports to the FSCA on or before 28 February 2019 in terms of FSCA FAIS Notice 69 of 2018. Should you have any enquiries relating to the submission of the report, please contact the FSCA for assistance on 012 428 … Continued

Protection of Personal Information (POPI) Regulations published

Posted on 22 Jan 2019

The Information Regulator published the final Protection of Personal Information (POPI) Regulations on 14 December 2018. The Regulations will come into effect on a date yet to be determined by the Regulator by proclamation in the Government Gazette. The Regulations, inter alia, set out the responsibilities of Information Officers (in addition to those referred to … Continued

Category II and IIA Bi-Annual Compliance Reports

Posted on 22 Jan 2019

All FSPs are required to report to the Financial Sector Conduct Authority (Authority) in the manner and regarding the matters [1] which are determined by the Authority. Category II and IIA financial services providers (FSPs) are required to submit Bi-Annual Compliance Reports to the Authority two (2) months after the reporting dates which are 30 June … Continued

2019 Key Compliance Dates

Posted on 22 Jan 2019

2018 brought significant changes for the financial services industry. The Financial Sector Regulation Act made the twin peaks approach to regulation a reality and the ‘previously’ FSB, took up its mandate as the Financial Sector Conduct Authority promising a more pre-emptive and intrusive approach to supervision. One of the most notable changes for authorised financial … Continued

Category I FSPs without a Compliance Officer – Submitting your Compliance Report to FSCA

Posted on 4 Dec 2018

Category I FSPs that do not have a Compliance Officer must submit their Annual Compliance Reports to the FSCA on or before 28 February 2019 in terms of FSCA FAIS Notice 69 of 2018. Should you have any enquiries relating to the submission of the report, please contact the FSCA for assistance on 012 428 … Continued

FAIS Ombud – Change in physical address details

Posted on 4 Dec 2018

The office of the FAIS Ombud relocated on 1 November 2018. All contact details of the FAIS Ombud remain the same except for their new physical address being: Kasteel Park Office Park, Orange Building, 2nd Floor, Cnr of Nossob and Jochemus Street, Erasmuskloof, Pretoria. Other contact details of the FAIS Ombud: Phone: 012 762 5000 … Continued

Know your client and understand your products

Posted on 4 Dec 2018

Treating customers fairly (TCF) should be engrained in your business. This includes being able to recommend suitable products for your target market and ensure your clients understand the financial products they are purchasing. TCF Outcome 2 requires that financial services and products are designed to meet the needs of clients. To ensure the services and … Continued

Class of Business training requirements

Posted on 20 Nov 2018

Representatives who have a date of first appointment on or after 1 August 2018 and Representatives of a CAT I FSP appointed for the first time as a Representative in respect of a Tier 1 product for advice on or after 1 August 2018 are reminded that they have until 31 January 2019 to comply … Continued

Outcomes of the October 2018 meeting of the FATF

Posted on 20 Nov 2018

The outcomes of the Financial Action Task Force (FATF) meeting held in October 2018 was recently published by the FIC. The FATF is an intergovernmental organisation which develops policies to combat money laundering. South Africa participated in the first meeting of the FATF session under the USA Presidency in Paris, France from 14 to 19 … Continued

FIC and SARB committed to working together

Posted on 20 Nov 2018

The South African Reserve Bank (SARB) and the Financial Intelligence Centre (FIC) are committed to increased collaboration and co-operation in the fulfillment of their respective legislative obligations. Both organisations have undergone landmark legislative changes with the amendments to the Financial Intelligence Centre Act effective since October 2017, and the Financial Sector Regulation Act bringing about … Continued

Establishing a complaints management framework

Posted on 20 Nov 2018

FSPs will need to establish a complaints management framework in their business following the FSCA’s (previously FSB) proposed changes to the FAIS General Code of Conduct (GCoC) in November 2017. The framework should include a complaints resolution process. This systematic method is used by businesses to receive, record and respond to customer complaints. It ensures that responses to … Continued

CMS Circular 50 of 2018: Demarcation Exemption Appeal Outcome

Posted on 6 Nov 2018

The Council for Medical Schemes recently published the Demarcation Exemption Appeal Outcome. In March 2017 the Council in consultation with other stakeholders approved the Exemption Framework, which permits the exemption of Providers of indemnity products that are conducting the business of a medical scheme from certain provisions of the Medical Schemes Act for a period … Continued

Comply with General Code of Conduct when providing advice

Posted on 6 Nov 2018

An Ombud determination highlights the importance of adhering to the General Code of Conduct when rendering financial services and making adequate product disclosures when advising the client. In the case of Dr R.A.Georges De Meulenaere v S. E Coetzer t/a Downstream Trading, the financial service provider (FSP) advised his client in 2011 to invest in … Continued

Reminder: FICA Risk Management and Compliance Programme to be implemented by 2 April 2019

Posted on 23 Oct 2018

Although the requirement to implement a Risk Management and Compliance Programme (section 42 of the FIC Act) came into effect on 2 October 2017, accountable institutions have been granted some time to implement this. Accountable institutions are reminded that they must have fully adopted and implemented an RMCP by 2 April 2019.

FIC releases its Annual Report for 2017-2018

Posted on 23 Oct 2018

In the 15 years since the FIC was established, appreciation and awareness of the value of financial intelligence has grown and evolved. The Financial Intelligence Centre serves an integral part in strengthening the financial integrity of South Africa and their reports are valuable to criminal investigations. The FIC has published their Annual Report indicating the … Continued

Earning fees as a short-term advisor

Posted on 23 Oct 2018

Short-term advisors who charge clients an agreed fee in addition to commission will need to ensure the fee complies with Rule 12.4.1 of the Policyholder Protection Rules (PPR) before an insurer can collect the fee on behalf of the advisor. The Rule, which comes into effect on 1 January 2019, following the repeal of Section … Continued

FSR and FAIS Act Amendments and commencement dates

Posted on 23 Oct 2018

Government Gazette No. 41947 published on 28 September 2018 contains two Notices from National Treasury. The Notices relate to commencement dates of the Financial Sector Regulation Act (FSRA) and the commencement date of the repeal of various sections of the Long-term and Short-term Insurance Acts. Key points of the Notices Chapter 14 of the FSRA … Continued

Levies due and payable for end October

Posted on 9 Oct 2018

FSPs are reminded that the FAIS Levy Invoices should have been received with payment due before 31 October 2018. If an FSP has not received their invoice, we suggest that they contact the FSCA requesting that the invoice be resent to them. Failure to pay levies timeously can result in licence suspension.

Response to informal consultation feedback on the replacement advice record for individual risk policies

Posted on 9 Oct 2018

Rule 19 of the Policyholder Protection Rules (PPRs) made under the Long-term Insurance Act requires long-term insurers to meet certain requirements before entering into an individual risk policy that is a replacement policy.  The FSCA (previously the FSB) had provided an initial draft format of the replacement advice record to industry associations for comment in … Continued

Understanding the impact of the consultation paper on the Exemption of Services under Supervision in your practice

Posted on 9 Oct 2018

The FSCA published a consultation paper on Exemption on Services under Supervision at the end of July 2018 to align the requirements for representatives acting under supervision with the new Fit and Proper Requirements[1] and to address some of the Conduct Authority’s concerns. The proposals also reflect the shift to principle and outcomes-based regulation, leaving … Continued

Insurance (LT) Notice 2 of 2018 – Draft Determination: Format for Replacement Advice Record (Individual risk Policies)

Posted on 26 Sep 2018

The FSCA has recently published a consultation document titled Draft Determination: Format for Replacement Advice Record (Individual Risk Policies). The Draft Determination is in terms of the Policyholder Protection Rules made under the Long-term Insurance Act and sets out the proposed format for the Replacement Advice Record with five clearly marked sections: General Information, Policy … Continued

Consultation paper: Exemption of Services under Supervision – Condition 3 – Supervision Agreement

Posted on 26 Sep 2018

At the end of July, the FSCA published a Consultation Paper on the Exemption of Services Under Supervision for Representatives who do not yet meet all the Fit and Proper requirements. Masthead has submitted comment to the FSCA and we expect to see the proposed requirements finalised before the end of the year. In this … Continued

FAIStime – the new FAIS Ombud newsletter

Posted on 11 Sep 2018

The Office of the Ombud for Financial Services Providers recently published the first edition of their changed newsletter called FAIStime. In this Quarter 2 of 2018 edition, read about: Changes and new concepts introduced by Twin Peaks; The new FAIS Ombudsman, Mr. Naresh Tulsie; The effects of technology on the financial services industry; The Ombud’s … Continued

Consultation Paper – Exemption on Services under Supervision

Posted on 11 Sep 2018

The Financial Sector Conduct Authority published the consultation paper on 31 July 2018 to obtain public comment on the Exemption on Services under Supervision. The paper makes provision for representatives who do not meet all the competence requirements to work under supervision with certain conditions. In this article we focus on the entry level requirements … Continued

Preparing for Regulatory Examinations

Posted on 28 Aug 2018

Masthead can assist you in passing your Regulatory Exams with ease Attend our seminars and complete our online mock exams to ensure that you are ready to tackle the exam with confidence. RE1 and RE 5 Training seminars We run full day seminars that will equip you with an in-depth knowledge and understanding of the … Continued

FSCA Compliance Reports 2018

Posted on 28 Aug 2018

The Financial Sector Conduct Authority (FSCA) published the following 2018 Compliance Reports on 15 August 2018 which must be submitted to the FSCA by 31 October 2018: FSCA FAIS Notice 54 of 2018 must be used by Category IV financial services providers (FSPs). FSCA FAIS Notice 55 of 2018 is the Compliance report for foreign … Continued

Consultation Paper: Exemption of Services under Supervision

Posted on 14 Aug 2018

The Financial Sector Conduct Authority (the Authority) published the Consultation Paper: Exemption of Services under Supervision on 31 July 2018 for comments. The purpose of the Consultation Paper relates to the Fit and Proper Requirements of a representative acting under supervision and the Authority’s proposed – (a) withdrawal of the Notice on the Exemption of … Continued

Enforcement Actions by the FSCA

Posted on 14 Aug 2018

The Financial Sector Conduct Authority (FSCA), previously Financial Services Board (FSB), has the responsibility to supervise the compliance of financial institutions with financial sector laws. Where the FSCA finds that a financial institution is not compliant, it may take appropriate remedial and enforcement action. These actions could result in referral to the Enforcement Committee of … Continued

The effect of the new Fit and Proper Requirements on an FSP’s business continuity policies

Posted on 31 Jul 2018

With the introduction of the New Fit and Proper Requirements (Board Notice 194 of 2017), the requirement of a business continuity plan forms part of the governance framework that must be adopted and implemented by all FSPs. The governance framework of an FSP must be relative to the nature, scale, risks and complexity of the … Continued

FSCA Press Release – FSCA Commissioner appoints Divisional Executives

Posted on 31 Jul 2018

The Financial Sector Conduct Authority (FSCA) has issued a press release announcing the appointment of key operational Divisional Executives. The document also informs on further vacant Divisional Executives positions. Click here to read the press release.

Levy on authorised financial services providers

Posted on 17 Jul 2018

The Financial Sector Conduct Authority (FSCA) has issued Notice 362 of 2018 on the Levies of Financial Institutions. Authorised financial services providers (FSPs) are required to pay a levy to the FSCA to cover the cost of supervision and a levy for funding the Office of the FAIS Ombud by 31 October 2018. The tables … Continued

Status of instruments issued under the Long-term and Short-term insurance Acts after 1 July 2018

Posted on 17 Jul 2018

Under the new twin peaks model of regulation, the Prudential Authority and the Financial Sector Conduct Authority (FSCA) issued Joint Communication 1 of 2018. This communication sets out the status of all instruments issued under both the Long-term and Short-term Insurance Acts from the effective dates of these Acts up until 1 July 2018 when … Continued

When is a PI insurer liable to pay a claim?

Posted on 17 Jul 2018

Professional indemnity (PI) insurance provides vital cover if a client claims against a financial services business. A recent case reveals how the courts view a client’s loss due to a financial advisor’s bad financial advice and a PI insurer’s obligation to cover the advisor against legal liability to compensate the client for the loss. In … Continued

Commencement of the Insurance Act

Posted on 3 Jul 2018

Insurance Act (No. 18 of 2017) has come into effect on 1 July 2018. The Act, which was assented to by the President on 18 January 2018, establishes a legal framework for the prudential regulation and supervision of insurers and insurance groups in terms of the Twin Peaks framework. This will ensure the safety and … Continued

What to consider before appointing a representative under supervision

Posted on 3 Jul 2018

Before you appoint a representative to work under supervision at your Financial Services Provider (FSP), take time to understand your responsibilities in terms of labour legislation, financial sector regulation and principles. The individual you appoint must be honest, have integrity and be of good standing. Information that might affect their fit and proper status must … Continued

Ombudsman for Short-Term Insurance comments on misrepresentation, non-disclosure, dishonesty and fraud by policyholders

Posted on 20 Jun 2018

The Ombudsman for Short-Term Insurance (OSTI) published a media release on the importance of providing accurate and truthful information when reporting a claim. The OSTI emphasises the challenges of fraudulent claims in the short-term insurance industry and the terms and conditions clauses that some insurance companies have included in their policy wording to assist with … Continued

Cyberattacks hitting closer to home than you think

Posted on 20 Jun 2018

This past week, cybercriminals demanded payment from Liberty after notifying them that they had seized data from their insurance business.  Liberty immediately deployed a large team of IT specialists to investigate and secure their systems and fortunately were able to avert irreparable damage to the company. Read more here. Cyberattacks are becoming more frequent in … Continued

FAIS Newsletter – Volume 26

Posted on 5 Jun 2018

The FSCA published their FAIS Newsletter Volume 26 May 2018. Please take some time to read “Update of the regulatory examinations” (page 3), which provides information on registering for examinations, amendments of examination dates, updated study material and more. RE 5 Exam deadline dates Any Representative appointed before 30 June 2015 must complete their RE … Continued

CIS Hedge funds and Structured Deposits – do you need to be licenced?

Posted on 5 Jun 2018

The new Fit and Proper requirements [1] made provision for six new product categories (subcategories). In this article we only deal with two of these, namely CIS Hedge Funds and Structured Deposits. In 2015 hedge funds were declared collective investment schemes [2] and therefore, fell into the licence subcategory Participatory Interests in a Collective Investment Scheme … Continued

FSCA warning: Metro Finance (Pty) Ltd is an unauthorised FSP

Posted on 22 May 2018

The FSCA warns the public to act with caution when dealing with Metro Finance (Pty) Ltd, as they are not authorised in terms of the Financial Advisory and Intermediary Services Act, 2002 (“FAIS Act”), to render any financial advice and intermediary services. Read the full press release here.

Understanding the role of the FAIS Ombud in resolving complaints

Posted on 9 May 2018

In this article we highlight two Appeal Board rulings to demonstrate the importance of understanding the role of the office of the Financial Advisory and Intermediary Services (FAIS) Ombud in performing its functions as described and mandated by the FAIS Act. The main objective of the FAIS Ombud is to consider and handle FAIS related … Continued

FSCA announces appointment of new FAIS Ombudsman

Posted on 9 May 2018

On 26 April 2018, the Financial Sector Conduct Authority (FSCA) released a statement that Naresh Suresh Tulsie will take over from Noluntu Bam as the new Ombud for Financial Advisory and Intermediary Services (FAIS), effective 1 May 2018. The FSCA noted that Mr. Tulsie will be responsible for promoting consumer protection and fostering the integrity … Continued

Implementation of the amendments to the Financial Intelligence Centre Act, 2001 – Supervisory Approach

Posted on 24 Apr 2018

In a recent communication, the FSCA reinforced that they will continue to conduct FIC onsite visits, and pointed out that accountable institutions must be able to demonstrate that they have taken steps to implement the new requirements. Click here to read the full communique.

Binder fees: capped remuneration

Posted on 24 Apr 2018

Financial Services Providers (FSPs) outsource functions for various reasons, such as increasing efficiency, reducing operating costs, improving company focus and managing risk by sharing the risk. One way in which insurance companies outsource is through Binder Agreements. This sub-set of outsourcing arrangements is regulated by the Financial Sector Regulation Act, Policyholder Protection Rules and Regulations … Continued

Proposed changes to manage client complaints fairly

Posted on 24 Apr 2018

The FSB, now called the Financial Services Conduct Authority (FSCA), recently proposed amendments to the FAIS General Code of Conduct (GCoC) and the Specific Code of Conduct to align the codes with other legislation, like Treating Customers Fairly (TCF). One proposed amendment focuses on complaints management and prescribes how to deal with client complaints to … Continued

Exemption of Underwriting Managers from the Regulatory Examination Requirements

Posted on 10 Apr 2018

On 29 March 2018, the Registrar of Financial Services Providers published the Exemption of Underwriting Managers from the Regulatory Examination Requirements, 2018 (“the Exemption”) on the official website of the Financial Services Board, now known as the Financial Sector Conduct Authority. The Determination of Fit and Proper Requirements for Financial Services Providers, 2017, which came … Continued

Proposed amendments to the regulations of the Long-term and Short-term Insurance Act 1998, affecting premium collection

Posted on 10 Apr 2018

The Insurance Act, 2017 (“Insurance Act”) was enacted on 18 January 2017 and provides the prudential legislative framework for insurers. The commencement date of the Insurance Act is still to be determined by the Minister of Finance, but it is projected to be 1 July 2018. The proposed amendments focus mainly on aligning the Regulations … Continued

How does money laundering impact your FSP?

Posted on 27 Mar 2018

As an FSP, you run the risk of being conned into money laundering schemes without your knowledge. The three-stage process that is commonly used for money laundering places an operational, reputational, legal, and financial risk on your business.  It is therefore imperative that you safeguard your business from falling victim to fraud by being able … Continued

Unpaid debit orders: the painful consequences

Posted on 27 Mar 2018

When clients experience financial stress, unpaid debit orders may occur. In a recent matter, the Ombudsman for Short-Term Insurance found in favour of an insurer for repudiating a claim due to an unpaid premium. The client missed a premium payable by debit order due to insufficient funds in his account after he had been dismissed … Continued

Proposed amendments to the Policyholder Protection Rules

Posted on 13 Mar 2018

The proposed amendments to the Policyholder Protection Rules (PPRs) were recently published in Board Notice 30 of 2018. The scope of the proposed amendments to the PPRs is to align the PPRs with the Insurance Act, enacted on 18 January 2018. This new Insurance Act, which has not yet come into effect, provides the framework … Continued

Accreditation to offer Health Service Benefits

Posted on 13 Mar 2018

To offer your clients information, services or advice on medical schemes, you and your brokerage must be accredited with the Council of Medical Schemes (CMS) – and retain accreditation by reapplying biannually. According to the Financial Advisory and Intermediary Services (FAIS) Act, advisors who want to provide a service in the Health Service Benefits product … Continued

Determination of the Fees payable to the Registrar of Financial Services Providers

Posted on 27 Feb 2018

Fees payable to the Registrar of Financial Services Providers has been updated and comes into effect on 9 March 2018.  Click here to view the new fees that FSPs will need to pay for services such as FSP licence applications, extensions and exemptions and RE exams etc.

Draft Public Compliance Communication No 38A

Posted on 13 Feb 2018

The Financial Intelligence Centre (FIC) has recently published the draft Public Compliance Communication No 38A (PCC 38A). The objective of this PCC is to provide guidance in relation to receiving and responding to requests, interventions and orders from FIC in terms of sections 27, 32, 34 and 35 of the FIC Act, specifically: How the … Continued

Dealing with client complaints

Posted on 13 Feb 2018

As regulators increasingly focus on treating customers fairly, it is important to treat clients fairly in all aspects of your business, including if they complain. Dealing with client complaints is already part of regulatory compliance for FSPs. The objective of TCF Outcome 6 is that clients should not face unreasonable post-sale barriers to change a … Continued

Important Dates

Posted on 30 Jan 2018

Update the Central Representative Register on the FSB’s website and inform the Registrar of any relevant changes to the FSP within 15 days. Update the Competence Register (from 1 May 2018) within 15 days after Class of Business or Product Specific training has occurred. Annual Financial Statements must be submitted within 4 months after an … Continued

Guidance Note on Reappointing Debarred Representatives

Posted on 30 Jan 2018

The FSB published a Guidance Note – Guidance on the Reappointment of Debarred Representatives – on 18 December 2017 in order to clarify: The role of the FSB when an FSP reappoints a debarred representative; The responsibilities of the reappointing FSP; and The information which the reappointing FSP must submit to the FSB after it … Continued

Financial Services Board National Roadshow 2017

Posted on 11 Dec 2017

The Financial Services Board (FSB) held its national roadshow during November 2017. The presentations were themed around Insurance Conduct of Business and Insurance Prudential and included updates on: Twin Peaks Conduct of business regulatory reforms Retail Distribution Review (RDR) The conversion of licenses, and other transitional arrangements Feedback on the Conduct of Business Returns from … Continued

Prevention and Combating of Corrupt Activities Amendment Bill

Posted on 11 Dec 2017

The Department of Justice and Correctional Services has published the Prevention and Combating of Corrupt Activities Amendment Bill 2017. The Amendment Bill aims to amend the Prevention and Combating of Corrupt Activities Act, 2004, to: deal with passive corruption in respect of foreign public officials; extend the offence of unacceptable conduct relating to ordinary witnesses … Continued

Draft Directive – Prohibition of Inducement and Acceptance of Gratification

Posted on 11 Dec 2017

The Registrar of Pension Funds published a draft Directive in terms of the Prohibition of Inducement and Acceptance of Gratification. The Directive aims to ensure compliance with and to prevent contraventions of the objectives of a Board, as determined in terms of section 7C of the Pension Funds Act. The purpose is to allow the … Continued

Unregulated virtual currencies bear risks for advisors and clients

Posted on 28 Nov 2017

Unregulated products, such as virtual currencies, are becoming increasingly popular.  This is often because the financial rewards appear to be lucrative causing prospective investors to be less cautious in their approach than normal.  However, the risks associated with unregulated products can be great and the consequences thereof can be detrimental to the financial well-being of … Continued

Adjustment to fees payable to Brokers with effect from 1 January 2018

Posted on 28 Nov 2017

In Circular 69 of 2017, the Council for Medical Schemes (CMS) stipulates that there has been an increase in the maximum amount which can be paid to brokers in terms of Section 65 of the Medical Schemes Act. The commission which a broker can earn on a medical aid is 3% of contribution (plus VAT) … Continued

Do you have enough Professional Indemnity Cover in place?

Posted on 28 Nov 2017

FSPs are required by law to “maintain in force suitable guarantees or professional indemnity or fidelity insurance cover”. The minimum amount which an FSP is required to have in place is determined in BN123 of 2009 and differs according to the categories of FSPs and various activities, such as holding of client funds. PI Cover … Continued

Submit your financial statements and compliance reports

Posted on 15 Nov 2017

Financial statements indicate financial soundness, so the premise is that if an FSP is financially sound, it can advise clients how to take care of their financial wellbeing. An annual compliance report serves as a snapshot of your operations and provides insight to your state of affairs during the reporting period. All authorised FSPs are … Continued

Proposed amendments to the General Code of Conduct and Specific Code for Short Term Deposits

Posted on 15 Nov 2017

The FSB has published the proposed amendments to the General Code of Conduct and Specific Code for Short Term Deposits which will give effect to certain RDR Proposals and align with the draft Long Term and Short Term Insurance Policyholder Protection Rules. Interested parties have been invited to submit their comments to the FSB by … Continued

FAIS Notice 139 of 2017 – Amendment of the Exemption of Juristic Representatives from Section 13(1)(c) of the Act published on 25 October 2017

Posted on 15 Nov 2017

This Notice clarifies the requirements in terms of an agreement and a guarantee policy, for a juristic representative acting on behalf of Short-term insurers. The original definition of juristic representative created the impression that the juristic representative was required to enter into and maintain a guarantee policy or contract irrespective of whether it was appointed … Continued

Twin Peaks Newsletter – Issue 2: The FSB Approach

Posted on 31 Oct 2017

The Financial Services Board (FSB) provides more information on the phasing in of the Twin Peaks regulation model, in Issue 2 of its Twin Peaks Newsletter. The newsletter provides clarity on the objectives of the Financial Sector Regulation (FSR) Act, which is seen as the foundation of the Twin Peaks model, and the changes or … Continued

FSB fines FSP R20 000 for contravening the FAIS Act

Posted on 31 Oct 2017

Refinery 5 (Pty) Ltd (Refinery) contravened section 7(1) of the Financial Advisory and Intermediary Services Act, 37 of 2002 in that during the period from February until April 2017 Refinery acted as a financial services provider in respect of shares when it was not permitted to render financial services in respect of this product category. … Continued

2017 Annual Compliance Reports

Posted on 18 Oct 2017

Category IV FSP’s must submit their Annual Compliance Reports to the FSB on or before 31 October 2017 in terms of FAIS Notice 55 of 2017. FSP and Compliance Officers are encouraged to use the online submission method. Should you have any enquiries relating the submission of the report please send an e-mail to the … Continued

National Treasury: Warning against the risks associated with virtual currencies

Posted on 18 Oct 2017

A virtual currency is a unit of account that is digitally or electronically created and stored. A virtual currency allows users to purchase goods and services without using a government-backed currency, provided that the participants are willing to accept the currency as a form of payment. This unregulated, ‘open source’ currency is not controlled and … Continued

Withdrawal of Exemptions

Posted on 18 Oct 2017

The Minister of Finance has amended the Money Laundering and Terrorist Financing Control (MLTFC) Regulations and withdrawn Exemptions made in terms of the Financial Intelligence Centre Act, 2001 (FIC Act). The following regulations have been withdrawn: R1596 of 20 December 2002 1353 19 November 2004 560 25 June 2010 461 5 June 2015 The exemptions … Continued

Invitation to comment on the policy document “A Known and Trusted Ombud System for All”

Posted on 3 Oct 2017

On 20 September 2017, National Treasury published “A Known and Trusted Ombud System for All” and invited the public to submit their views and comments to marketconduct@treasury.gov.za before 30 November 2017. Various options to reform the Ombud system are proposed in this document, which include: Enhancing the hybrid model of statutory and industry ombuds, building … Continued

Embrace change

Posted on 21 Sep 2017

New legislation, such as the Financial Sector Regulation Act, may appear daunting to independent financial advisors, but we believe it will achieve its objective as consumers regain confidence in the integrity of the financial services industry. The Financial Sector Regulation Act, commonly referred to as Twin Peaks, RDR and COFI[1], seeks to achieve a financial … Continued

Proposed Replacement Policyholder Protection Rules

Posted on 21 Sep 2017

The Registrar of Long-term and Short-term Insurance gave notice of the release, for a second round of public comment, of the proposed replacement of the Policyholder Protection Rules under the Long-term and Short-term Insurance Acts. The proposed replacement of the PPRs are required to give effect to several conduct of business reforms. Comments may be … Continued

FAIS Newsletter (Volume 24)

Posted on 21 Sep 2017

The FSB published Volume 24 of its FAIS Newsletter on 1 September 2017, which covers: Regulatory Updates, addressing the Conduct of Business Report, Fit and Proper amendments and Exemption notices; A must-read article from the FIC Desk which contains very important information; Debarment of individuals who obtained fraudulent qualifications or RE results; Dormancy: Lapsing of … Continued

Exemption of Certain FSPs from the Professional Indemnity and Fidelity Insurance Cover Requirements

Posted on 5 Sep 2017

The FSB has published FAIS Notice 110 of 2017 which exempts Category I Financial Services Providers (FSPs) that are only licensed for Long-term Insurance subcategory A and/or Friendly Society Benefits, from paragraphs 3(a) to (c) of the Professional Indemnity and Fidelity Insurance Cover requirements. Category I FSPs that qualify for this exemption will therefore not … Continued

FSB warns public against an unlicensed company

Posted on 5 Sep 2017

The FSB issued a press release on 25 August 2017 warning the public against a company, C.Z.Z General Industry (Pty) Ltd, which is posing as a registered Financial Services Provider. In exchange for a fee, the company purports to offer assistance to the public to claim pension surplus benefits as a result of their service … Continued

Differentiate yourself through compliance

Posted on 23 Aug 2017

The financial services industry has changed significantly over the past 13 years. As a financial advisor, you have had to adapt to the new environment in which there is more regulation, client behaviour has changed and there is greater competition from direct insurers. By understanding and applying compliance principles and processes, and incorporating these into … Continued

Personal Medical Savings Accounts

Posted on 23 Aug 2017

On 15 August 2017, the Council for Medical Schemes issued Circular 56 of 2017 relating to Personal Medical Savings Accounts. The Circular reports on the Constitutional Court judgement that the savings account liabilities do not need to be treated separately from any other liabilities in the scheme and that the scheme is the right holder … Continued

FSPs have a duty to make full disclosure, suitably advise and adhere to TCF principles

Posted on 8 Aug 2017

During May 2017, the FAIS Ombud granted an order in favour of the complainant in a matter[1] which highlights the duties of FSPs regarding disclosures, suitability of advice and Treating Customers Fairly (TCF) principles. In brief, the complainant concluded a life cover contract for both her husband and herself but was advised by one of … Continued

Don’t ask clients to sign incomplete or blank forms

Posted on 25 Jul 2017

Financial Service Providers (FSPs) who ask their clients to sign blank forms or have incomplete documentation are liable for severe penalties. In Ombud cases, FSPs asked their clients to sign blank client records of advice, replacement forms, application forms and consent forms. Some said this was to have the form on file so they could … Continued

FSB Issues Twin Peaks Newsletter

Posted on 25 Jul 2017

The FSB has issued its first Twin Peaks Newsletter. This is an online newsletter that sets out information about the implementation of Twin Peaks, the philosophy behind it as well as the regulatory framework changes that will impact South Africa’s financial sector. This follows the Financial Sector Regulation Bill being passed by Parliament and handed … Continued

Category II, IIA & III FSPs required to report Assets under Management and/or Administration by 31 July 2017

Posted on 11 Jul 2017

In terms of Section 15A of the Financial Services Board Act the FSB may impose levies on the institutions it supervises, to cover the costs of supervision. These levies are calculated and payable annually. Each FSP will receive a Levy Invoice during September with payment falling due in October of each year. A portion of … Continued

Outcomes of the June 2017 meeting of the Financial Action Task Force

Posted on 11 Jul 2017

South Africa participated in the third meeting of the Financial Action Task Force (FATF) session XXVIII, in Valencia from 18 to 23 June 2017. At this meeting the FATF continued work on a number of important initiatives relating to its mandate to promote effective implementation of measures against money laundering, terrorist financing and other related … Continued

The impact of the Constitutional Court’s ruling on personal medical savings accounts

Posted on 28 Jun 2017

The Council for Medical Schemes (CMS) has issued a statement on the judgment made against them by the Constitutional Court. The judgment follows a matter that was taken on appeal by Genesis Medical Scheme who argued that funds in a personal medical savings account (PMSA) may be treated as assets of a medical scheme. This … Continued

Key Factors to Consider when creating a Business Continuity Plan

Posted on 13 Jun 2017

Business continuity is a provision of the FAIS Act that presents a challenge to many financial services providers (FSPs), who often ask why it is important to have a workable continuity plan. The Act requires a documented plan to provide for events of voluntary and/or involuntary succession. The General Code of Conduct for authorised FSPs … Continued

Reminder: Request for Extension of Submission of Annual Financial Statements to the FSB

Posted on 13 Jun 2017

A requirement set by section 19 of the FAIS Act is that financial statements must be submitted to the registrar by an authorised financial services provider, no later than four months after the end of the provider’s financial year end. If an FSP had its financial year-end on 28 February 2017, the due date for … Continued

How the Annual Review Process can build client trust

Posted on 1 Jun 2017

Against a constantly changing financial landscape, the Financial Advisor’s role is to steer the client in developing a well thought out financial plan that establishes the client’s goals and objectives, which will ultimately achieve their identified financial goals. The financial plan must be frequently reviewed and adjusted to suit any changes in the client’s circumstances. … Continued

Insurer ordered to pay client’s full claim when Ombud finds that its policy wording is not clear

Posted on 17 May 2017

The client of the insurer, who is the complainant, parked his vehicle and trailer in a parking area at a coffee shop whilst having coffee during his holiday. Upon returning to his vehicle, he found that his trailer with its contents to the value of R200 000 had been stolen. When the complainant instituted a … Continued

The Financial Intelligence Centre (FIC) welcomes the signing of the FIC Amendment Act

Posted on 17 May 2017

On 2 May 2017, the Financial Intelligence Centre (FIC) issued a media release stating that it is pleased with the President signing the Amendment Act. The Amendment Act introduces new concepts aiming to implement another level of safeguarding South Africa’s financial system against money laundering, terrorist financing and other illicit activities. The amendments will also … Continued

Update to Recognised Qualifications for FSPs and Compliance Officers

Posted on 3 May 2017

The Registrar has issued Board Notice 51 of 2017 which is the Amendment Notice on the Determination of Recognised Qualifications for Financial Services Providers and Compliance Officers, 2017. Click here to read the updated list of recognised qualifications to ensure that you do comply with the qualification requirement in terms of the Fit and Proper … Continued

FSB fines Assupol R500 000 for Contravening Long-Term Insurance Act

Posted on 3 May 2017

The Enforcement Committee received a case from the Registrar of Long-Term Insurance regarding Assupol Life Limited. The Registrar found that from August 2014 to June 2016, Assupol contravened Section 49 of the Long-Term Insurance Act by allowing its independent intermediaries to share in underwriting profits. They were also found to contravene Rule 16.1 of the … Continued

Financial Services Board has published a ‘Frequently Asked Questions’ document to assist insurers with understanding Demarcation Regulations

Posted on 19 Apr 2017

The Financial Services Board (FSB) has issued a Frequently Asked Questions (FAQs) document to assist insurers to implement and comply with the Demarcation Regulations. The FAQs are grouped into 8 categories: Implications of the 1 April 2017 effective date of the Demarcation Regulations Product descriptions (regulation 7.2) Underwriting (regulation 7.3(2)-(4)) Waiting periods, variation and termination … Continued

Representatives working under supervision

Posted on 4 Apr 2017

When the FSB conducts FSP on-site visits, the supervision agreements for Representatives working under supervision are scrutinised. The supervision plan and the tracking of the supervision activities are also inspected. It is therefore of utmost importance to ensure that these documents are in place and monitored on a regular basis. In order to operate as … Continued

Final Credit Life Insurance Regulations Issued and Published

Posted on 4 Apr 2017

The Minister of Trade and Industry, together with the Minister of Finance, published the final Credit Life Insurance Regulations in terms of the National Credit Act. The Minister of Trade and Industry, with the Minister of Finance, has issued and published the final Credit Life Insurance Regulations. One of the aspects set out in the … Continued

Annual Financial Statements Part II – The Exemption of Eligible FSPs from Audited Financial Statements

Posted on 22 Mar 2017

Section 19(1) of the FAIS Act requires financial services providers (FSPs) to maintain proper accounting records and prepare annual financial statements. Section 19(2)(a) requires that these financial statements are audited. FAIS Notice 82 of 2015 sets out that the Registrar is satisfied that there are reasonable grounds for the relaxation of the audit requirements to … Continued

FSB publishes latest FAIS Newsletter

Posted on 22 Mar 2017

The Financial Services Board (FSB) has published its latest FAIS newsletter. The newsletter contains the following topics: New names of the FAIS online systems which changed at the beginning of 2017; The project to update Compliance Officer contact details; Message from the Insurance Compliance Department (ICD) regarding a scenario which may be prejudicial to dependents … Continued

Annual Financial Statements Part I – Does your FSP meet the Financial Soundness requirements

Posted on 8 Mar 2017

In terms of section 19(2) of the FAIS Act, all FSPs are required to submit financial statements for the FSB to determine if an FSP complies with the financial soundness requirement in terms of the Fit and Proper Requirements (BN 106 of 2008).  Financial statements must be signed by the relevant person(s) before submitting. The … Continued

Do clients have enough information to make informed decisions?

Posted on 22 Feb 2017

An important question which advisors must ask themselves, is whether they have given their clients enough information about a financial product and explained the different aspects of the product in such a way that clients are placed in a position to make informed decisions. Client’s should understand not only how a product is likely to … Continued

Demarcation Regulations

Posted on 21 Feb 2017

National Treasury has issued the release of the final Demarcation Regulations in the Government Gazette. The Regulations are the outcome of the consultative process between the Minister of Finance, the Minister of Health, the Council for Medical Schemes (CMS) and the Financial Services Board (FSB). The final draft was published and will take effect from … Continued

The importance of disclosure – What advisors should know

Posted on 7 Feb 2017

The FAIS Act aims to protect the public by prescribing how financial services, i.e. advice and intermediary services, should be rendered. Advisors must operate under an authorised financial services provider (FSP) licence in order to operate lawfully. The Act also lays down specific duties that relate to FSPs including the obligation to disclose specific information … Continued

Submission of Bi-Annual Compliance Report – CAT II and IIA

Posted on 7 Feb 2017

Category II and IIA Financial Services Providers (FSPs) are required to submit their Bi-Annual Compliance Reports to the Financial Services Board (FSB), two (2) months after the reporting date (FAIS Notice 84 of 2016). The reporting dates for Category II and IIA FSPs are 30 June and 31 December of each year. The Compliance Reports … Continued

FSB issues warning against unauthorised FSP

Posted on 24 Jan 2017

The Financial Services Board has issued a press release warning the public against conducting financial services business with Wayne (Zane) Wilson as he is not an authorised FSP as he purports to be. The Registrar has been informed that he provides an FSP number which belongs to a different authorised FSP. Wayne (Zane) Wilson is … Continued

FSB Bulletin and FAIS Newsletter

Posted on 24 Jan 2017

The Financial Services Board (FSB) released its FSB Bulletin for the second quarter of 2016. The newsletter provides insight on interesting topics such as illegal funeral policies, the big deal over credit ratings, the future of market conduct supervision and what it means for FAIS, and an interview with the Head of Department of FAIS … Continued

Parliament’s Standing Committee on Finance invites public for submissions on the Insurance Bill 2016

Posted on 24 Jan 2017

National Treasury has issued a media statement indicating that the Standing Committee on Finance (SCOF) is calling on the public to make written submissions on the Insurance Bill, 2016. The SCOF plans to arrange public hearings in February 2017. The Bill was approved by Cabinet in November 2015 and tabled in parliament in January 2016. … Continued

The Ombudsman’s Briefcase – October 2016

Posted on 29 Nov 2016

One of the case studies analysed by the Ombud for Short-Term Insurance was against Alexander Forbes. The client laid a complaint against the insurer when they rejected her claim for damage caused as a result of rising damp. The insurer rejected the claim on the basis that no insured peril had occurred. After the insurer … Continued

The FAIS Ombud Annual Report

Posted on 29 Nov 2016

The office of the FAIS Ombud has released its latest annual report. The report includes a note by the Minister of Finance, a report by the Chairperson of the Board of the FSB as well as the Ombud’s operational report which provides trends in respect of findings for the year 2015/2016. The Minister of Finance … Continued

FIC Amendment Bill Explained: Part IV – United Nations Imposed Financial Sanctions

Posted on 15 Nov 2016

The FIC Amendment Bill will introduce a new section (Section 26A), titled “Notification of persons and entities identified by Security Council of the United Nations”. This section will be prompted if the UN Security Council adopts a Resolution requiring UN member states to impose certain actions (financial sanctions) against certain identified persons or entities, and … Continued

Cybercrime and Fraud: Duties financial advisors should conduct to prevent cybercrime and/or fraudulent activities

Posted on 15 Nov 2016

Masthead has seen an increase in cybercrime and/or fraudulent activities which affect financial advisors. We take a look at the two types of situations which can impact both a financial advisor and his/her clients. Cyber security and liability Cyber liability occurs if someone hacks into an advisor’s data or the advisor’s staff gives out personal … Continued

Explanatory Memorandum of the Proposed Amendments to the Fit and Proper Requirements

Posted on 1 Nov 2016

The Registrar of the Financial Services Board (FSB) intends to amend the current fit and proper requirements applicable to financial services providers (FSPs), key individuals and representatives. The Registrar intends on doing so by revoking the Determination of Fit and Proper requirements for FSPs 2008, as well as the Notice on Determination of Qualifying Criteria … Continued

Licence Conditions – housekeeping rules

Posted on 18 Oct 2016

When the FSB grants an application for a FAIS licence (Section 8(4)), the Registrar may impose certain conditions and restrictions. There are standard conditions and there may also be conditions specifically applicable to the FSP licence. The licensing conditions may also include exemptions applicable to the FSP. One of the objectives of FAIS is to … Continued

FIC Public Compliance Communication – 2016 Special Voluntary Disclosure Programme

Posted on 18 Oct 2016

The FIC has released Public Compliance Communication (PCC) No 36 on the obligations arising from FICA, pertaining to the 2016 Special Voluntary Disclosure Programme. This PCC applies to accountable institutions which render advice to clients using the 2016 Special Voluntary Disclosure Programme (SVDP). The programme relates to tax matters and/or matters concerning the Exchange Control … Continued

Medical Schemes Act: Amendments to the Regulations regarding Fees Payable to the CMS and Statutory Penalties

Posted on 6 Oct 2016

The Council for Medical Schemes (CMS) announced changes to the fees payable to the Council. No changes have been made to the regulations and fee structure since November 1999. The most significant fee change that will affect financial advisors will be for: the application for accreditation, or the renewal of accreditation as a broker The … Continued

FIC Amendment Bill Explained: PART I – Directors Responsibilities and Consequences of Non-Compliance

Posted on 6 Oct 2016

The FIC Amendment Bill will introduce more responsibilities on the directors, senior management and other relevant senior staff to ensure that the accountable institution (AI) complies with the stringent measures to fight money laundering and terrorist financing (ML/TF). It is therefore important that all directors and management are properly informed of the proposed changes to … Continued

FAIS Newsletter – Volume 21

Posted on 20 Sep 2016

The latest FAIS newsletter, published by the FSB, covers information on: Electronic submission of handover reports What you need to know about registering for the Regulatory Exams Competency Framework ‘FAIS Credits’ Feedback on the online submission of profile changes In the next issue of Mastering Compliance we write about ‘FAIS Credits’ and provide guidance on … Continued

POPI: National Assembly approves Nominations for Information Regulator

Posted on 20 Sep 2016

The Protection of Personal Information Act (POPI) was signed into law by President Zuma in November 2013. In terms of Section 39 of the Act, an Information Regulator must be established. On 7 September 2016, the National Assembly approved the nominations of Chairperson, Advocate Pansy Tlakula and four other persons as members of the Regulator. … Continued

New ASISA EAC Standard effective from 1 October 2016

Posted on 6 Sep 2016

As part of its commitment to Treating Customers Fairly, ASISA members have developed the Effective Annual Cost (EAC) measure. This new standardised disclosure will give advisors the ability to compare charges across most retail investment products and it will assist advisors to compare the impact of charges on investment returns. Sharing this information with clients … Continued

New functionality gets added to the FAIS Online Reporting System

Posted on 6 Sep 2016

The FSB has released a new user guide for FAIS online reporting system users. This guide provides users with detailed steps on how to use the system as well as the various services available on the system. Some of the changes and new functionalities to the system are: Handover compliance reports can be completed on … Continued

Factors that every financial advisor must consider when doing a client’s risk profile

Posted on 6 Sep 2016

­­­­­­­There has been much debate about risk profiling and its relevance – or lack thereof – in determining an appropriate investment solution for customers. Risk Profiling is a process of finding the optimal level of investment risk for your client considering the risk required, risk capacity and risk tolerance, where: Risk Required is the risk … Continued

New Briefcase from Ombudsman for Short Term Insurance

Posted on 23 Aug 2016

The Ombudsman for Short Term Insurance has issued the latest issue of the OSTI Briefcase for 2016. We take a look at two case studies in this issue which relates to clear information not being provided.  We highlight the importance of understanding what is expected of financial advisors when providing clients with information about a … Continued

What you need to know and how to calculate your FSB Levy for 2016

Posted on 11 Aug 2016

Authorised financial services providers are required to pay a levy to the FSB to cover the cost of the FSB’s supervision and a levy for funding the Office of the FAIS Ombud. Board Notice 81 of 2016 sets out the details of the levies which are payable by 31 October 2016. The FSB would have … Continued

Financial Sector Regulation Bill revised by National Treasury: New documents and draft of Twin Peaks Reform Programme released

Posted on 11 Aug 2016

National Treasury has issued new documents which form part of its financial sector regulatory reform programme. The programme forms part of the financial sector reform strategy for South Africa which was approved by Cabinet. The initial programme was first outlined in the discussion document ‘A safer financial sector to serve South Africa better’, published in … Continued

Why you should conduct Client Reviews

Posted on 26 Jul 2016

Section 7(4) of the General Code of Conduct (the Code) sets out what advisors must provide to their clients when rendering ongoing financial services to them. While the Code sets out the regulatory requirements, we also take a look at why it is makes good business sense for advisors to conduct client reviews. The heart … Continued

The FSB publishes their latest FSB Bulletin

Posted on 12 Jul 2016

The latest FSB Bulletin published recently reports on the first quarter of 2016. The Bulletin covers industry news and views written by members of the FSB. Masthead’s managing director, Ian Middleton, is also featured in this Bulletin where he speaks about an industry perspective of “Consumers, advisors should prepare now for advice fees.” Click here … Continued

FAIS Ombud finds advice offered by respondents to be fraudulent, enticing and indicative of a pyramid scheme

Posted on 12 Jul 2016

The complainant agreed to invest an amount of R50 000 in shares based on the advice of the respondents who informed the complainant that they “… were in the business of ‘buying and selling JSE shares under high gearing securities (CFDs and Currencies) to make profit in a short period’”.  The investment agreement indicated that a … Continued

Reminder – Request for Extension of Submission of Annual Financial Statements to the FSB

Posted on 28 Jun 2016

Section 19 of the FAIS Act sets the requirement that financial statements must be submitted to the registrar by authorised financial services provider no later than four months after the end of the providers financial year end. If an FSPs financial year ended on 28 February 2016, the due date for such FSP to submit … Continued

Category II and IIA Bi-Annual Report

Posted on 28 Jun 2016

Category II and IIA Financial Services Providers (FSPs) are required to submit their Bi-Annual Compliance Reports to the Financial Services Board (FSB) two (2) months after the reporting date (BN 51 of 2016). The Bi-Annual Compliance Reports for Category II and IIA FSPs have two reporting dates per annum, being 30 June and 30 December. … Continued

FAIS Ombud Dismisses Client Complaint

Posted on 28 Jun 2016

The complaint arose when the complainant learnt that his investment funds were placed into a retirement annuity and would be tied up meaning he would have no access to his funds until he retires. The complainant alleged that he did not give the FSP any instruction to do so as he was out of the … Continued

Representative/Advisor/FSP ordered to pay client R550 000

Posted on 13 Jun 2016

An 81 year old pensioner invested R550 000 in the PIC Syndications (PIC) after being guaranteed interest of 12.5% per annum, payable monthly. The complainant gained the money from her late husband’s life insurance, deposited the funds in a bank account and called her financial advisor to ask if she knew of a better investment. The … Continued

The Ombudsman for Short Term Insurance releases their Annual Report for 2015

Posted on 30 May 2016

On 1 March 2016 the Office of the Ombudsman for Short Term Insurance welcomed a new Ombudsman, Deanne Wood. She has highlighted the key issues which were addressed by her predecessor, Dennis Jooste in his 2015 report. The total rand value of complaints resolved in favour of the insured/complainant, was R 100,712,182. This is the … Continued

FAIS Newsletter (Volume 20)

Posted on 30 May 2016

On 24 May 2016, Volume 20 of the FAIS Newsletter was published by the FSB. Two important matters in the newsletter that we would like to draw your attention to are: Ensuring that the FSB is informed of any changes in the business of the FSP within 15 days, as prescribed in the FAIS Act … Continued

Reminder – Qualification and RE exam deadline for Representatives under Supervision

Posted on 30 May 2016

Representatives who do not meet all the competency requirements are able to be appointed under supervision but are required to meet the necessary requirements by the prescribed deadline date. This deadline is measured from their date of first appointment and always falls on the 30th June. Qualification deadline A representative must obtain a relevant qualification … Continued

Contravention of Section 7(3) of the FAIS Act

Posted on 16 May 2016

Section 7(3) of the FAIS act states: “an authorised financial service provider or representative may only conduct financial service related business with a person rendering financial services, if that person has, where lawfully required, been issued with a licence for the rendering of such financial service and the conditions and restrictions of that licence authorises … Continued

Accounting and Auditing Requirements of Financial Services Providers

Posted on 3 May 2016

The FAIS Act creates a duty on FSPs to submit their financial statements to the Registrar. We discuss the requirements of what these statements and records should entail. The Financial Services and Intermediary Services Act (FAIS) creates a duty for Financial Services Providers (FSPs) to comply with the provisions of the Act regarding the financial … Continued

The latest goAML Registration guideline issued by the Financial Intelligence Centre

Posted on 3 May 2016

On Monday 25 April 2016 the Financial Intelligence Centre (FIC) switched over to its new registration and reporting system, goAML. All accountable and reporting institutions previously registered on the “old” system should have received their ORG ID number via email and followed the process set out.  If the ORG ID number has not been received, … Continued

Proposed Amendments to the FIC Regulations

Posted on 19 Apr 2016

The Financial Intelligence Centre (FIC) has published a consultation document which contains amendments to the regulations to the Financial Intelligence Centre Act, 2001 in order to align them with the FIC’s new registration and reporting platform, GoAML. Members of the public have been invited to submit their comments by Friday, 29 April 2016. Click here for … Continued

The FSB warns the public about two entities purporting to be registered as FSPs

Posted on 19 Apr 2016

The FSB warns the public to exercise caution when dealing with Millenniums Financial Services and Arion Loan (Pty) who purport to be registered financial services providers, but in fact are not.  Consumers are reminded to first check that an institution with which they wish to conduct financial services business is authorised to render financial services. … Continued

Material Misrepresentation – Change in Risk

Posted on 19 Apr 2016

In this instance, a father bought a vehicle for his daughter who was to take her driver’s licence test in the following month. He called his insurer to insure the vehicle and also notified them that it is intended for his daughter once she obtains her licence. The insurer, however, required that a regular driver … Continued

Administrative Penalty of Two Million Rand Imposed for Conducting Unregistered Insurance Business

Posted on 5 Apr 2016

The FSB has issued a press release on an administrative penalty of two million rand imposed by the Enforcement Committee on a funeral parlour that sold funeral insurance without being registered as a long-term insurer. The Enforcement Committee imposed a penalty of two million rand on a funeral insurance business after discovering that it had … Continued

FAIS Newsletter

Posted on 22 Mar 2016

On 26 February the Financial Services Board (FSB) released its first newsletter for 2016. The newsletter includes topics which we have covered extensively in our most recent issues of Mastering Compliance. While all the articles are relevant to our industry and well worth a read, we are sure you will benefit from reading Additional Services … Continued

FAIS Ombud determination: Outsurance ordered to compensate Complainant after claim rejection

Posted on 22 Mar 2016

On 1 March 2016 the FAIS Ombud ordered Outsurance to replace a laptop or refund the client after finding that they had failed to provide the client with sufficient information to make an informed decision. It was also found that they failed to offer the client the option of covering certain items under his policy … Continued

Postponement of the annuitisation requirement for Provident Funds

Posted on 11 Mar 2016

An urgent tax amendment bill was tabled in parliament to postpone the annuitisation requirement for provident funds for two years, until 1 March 2018. Cabinet has noted the concerns that have been raised in respect of the retirement reforms relating to the requirement to purchase an annuity at retirement (i.e. to receive a regular monthly … Continued

New meaningful Product Cost Comparison Standard to be introduced

Posted on 23 Feb 2016

On 10 February 2016, the Association for Savings and Investment South Africa (ASISA) published a media release informing its members of a new Standard regarding cost disclosures which will have to be adopted from 1 June 2016. From 1 June 2016, all members of the Association for Savings and Investment South Africa (ASISA) will be … Continued

Reminder – Financial Statements for year ending 31 December 2015 to be submitted to FSB by end of April 2016

Posted on 23 Feb 2016

The FAIS Act prescribes that the financial statements of an authorised financial services provider (FSP) must be submitted to the Registrar no later than four months after the FSP’s financial year end. This is a reminder to all FSPs whose financial year end was 31 December 2015, to ensure that their financial statements are submitted … Continued

FAIS Ombud orders advisor to repay R500 000 plus interest to client

Posted on 11 Feb 2016

On 21 January 2016, after finding that a 58 year old unemployed woman with no other income had lost all of her invested capital, the FAIS Ombud made a ruling that the advisor’s failure to comply with the general and specific duties set out in the General Code of Conduct was the direct cause of … Continued

Invitation to Test New FIC Reporting System

Posted on 11 Feb 2016

The Financial Intelligence Centre (FIC) calls upon all accountable institutions to test their new FIC Registration and Reporting System which will go live in April 2016. On 4 December 2015 the Director of FIC issued an invitation to reporting and accountable institutions to test the new system. The new system is called “goAML” and has … Continued

Practice Directions from the FSB Appeal Board

Posted on 19 Jan 2016

On 30 November 2015, the Chairperson of the FSB Appeal Board issued guidelines on what an appeal entails and how to submit an appeal to the Appeal Board. These Practice Directions and Guidelines replace the previously issued ‘Guidelines on Proceedings of the Appeal Board’ of 14 June 2011. The guidelines provide clarity on the following; … Continued

FSB General Status Update on RDR

Posted on 19 Jan 2016

In December 2015, the FSB released a document called the ‘General Status Update: Retail Distribution Review’. This document provides a general status update on the FSB’s strategy of implementing the RDR proposals and clarifies the steps and processes that will be followed during the implementation process. It is only for information purposes and should be … Continued

FICA Amendment Bill

Posted on 24 Nov 2015

Draft amendments were published earlier this year. These amendments focus on a more risk-based approach regarding the monitoring and verification of clients and have been proposed in order to meet international standards. This approach will simplify the current system of compliance by providing financial institutions with flexibility to determine how they verify their clients’ identity, taking into account the particular circumstances of each client. On Tuesday, 27 October 2015, the Minister of Finance, Nhlanhla Nene, tabled the Financial Intelligence Centre Amendment Bill in Parliament.

Invitation for Public Comment on the Draft Credit Life Insurance Regulations

Posted on 24 Nov 2015

On 13 November 2015 the Department of Trade and Industry released a notice as invitation for public comment on the draft Credit Life Insurance regulations. The draft regulations aim to propose maximum limits which credit providers may charge for fees, commission or expenses relating to credit life insurance. Interested parties may submit their written comments … Continued

The Financial Sector Regulation Bill currently underway for consideration

Posted on 11 Nov 2015

On 27 October 2015 the Minister of Finance presented the Financial Sector Regulation (FSR) Bill to Parliament after taking into consideration, comments received on the Bill. This comes after government’s decision in 2011 to shift to a Twin Peaks Model of financial sector regulation. The objective of the Bill is to split the regulating authorities of the financial services sector into two centres. The first centre will be a Prudential Authority, which will falls within the Reserve Bank and will supervise the safety and soundness of financial institutions. The second centre will be the Financial Sector Conduct Authority (FSCA), which will replace the FSB, and will supervise financial institutions on how they conduct business and treat their customers.

FSB Appeal Board Decision

Posted on 1 Nov 2015

The latest case from the appeal board deals with the debarment of an employee. The Registrar debarred an employee for a period of three years, preventing her from rendering any financial services to clients on behalf of a financial services provider in terms of S14A of the FAIS Act. S14A of the Act allows the … Continued

New Fit and Proper requirements for short-term and long-term insurance

Posted on 1 Nov 2015

In our issue of 23 June 2015, we referred to Board Notice 113 of 2015 issued by the Deputy Registrar of Short and Long-Term Insurance which called for public comment on the proposed fit and proper requirements. The Registrar released the Board Notice on Fit and Proper requirements on 14 August 2015. This Notice sets … Continued

The Act of Cybercrime

Posted on 27 Oct 2015

Cybercrime is generally defined as any form of criminal activity involving the use of computers and the internet. Without a legal definition of cybercrime, it is difficult to accurately and completely quantify the impact on South Africa. However, the SA Fraud Prevention Association estimates that the economic cost of cybercrime to South Africa is R1 billion per year. The Center for Strategic & International Studies suggest that the cost is actually close to R5.8 billion annually. Generally, smaller organisations do not have sufficient technology and security systems to protect them from cyber criminals. A 2013 report places South Africa as the third highest country affected by cybercrime, stating that 73% of South Africans were victims of cybercrime in 2013.

Publication of FAIS Newsletter Volume 18

Posted on 13 Oct 2015

The FSB has published its Newsletter Volume 18 on 7 October 2015. The latest publication clarifies and explains the exemption from audited financial statements as per FAIS Notice 82 of 2015. In our previous issue of Mastering Compliance, dated 5 August 2015, Masthead provided a guideline of what this FAIS Notice entails. The latest FAIS … Continued

Case won by motorist against Outsurance in KZN High Court

Posted on 1 Oct 2015

This case was taken on appeal with regards to motor vehicle insurance by the motorist after his claim was dismissed in the amount of R608 772.20 against the insurer, Outsurance. The appeal deals with the consequences of an insured who failed to disclose to the insurer an incident which may give rise to a claim, … Continued

FSB Levies

Posted on 1 Oct 2015

Authorised financial services providers are required to pay a levy to the Financial Services Board (FSB) to cover the cost of the FSB’s supervision and a levy for funding the Office of the FAIS Ombud. Risk of non-payment of levies If the FSP fails to pay the levies imposed, they run the risk of licence … Continued

Key Individual Responsibilities

Posted on 29 Sep 2015

We unpack what it means for a Key Individual to manage and oversee the statutory obligations of an FSP and to monitor the activities of those rendering financial services on behalf of the FSP to ensure that they comply with the legislation and treat customers fairly. We also briefly set out the Key Individual’s duty to manage the risks of the business and to ensure that the operational ability of the FSP is maintained. We emphasise how the fiduciary duty of a Key Individual goes far beyond just ticking the compliance boxes.

Guidance Note on Section 13(1)(c) of the FAIS Act

Posted on 2 Sep 2015

“A person may not render financial services or contract in respect of financial services other than in the name of the financial services provider of which such person is a representative.” The reasons for the insertion of the requirement in section 13(1)(c) are: To ensure that consumers of financial services know with whom they are … Continued

The Protection of Personal Information Act – Phase IV Review

Posted on 1 Sep 2015

The Review phase is the final phase and forms the last issue of the ‘Preparing for POPI’ series. This is a recap of the series to summarise the process. Review should not be seen as a last step, but should be a continuing process to ensure that compliance is regularly monitored. Being POPI Compliant will … Continued

Difference between using a vehicle for business use and commercial use

Posted on 1 Sep 2015

The Ombudsman for Short Term Insurance deals with a case where the terms and conditions of a policy were clearly understood by the insurer, but not necessarily by the client. The insurer was instructed to pay the client’s claim.

Submission of Financial Statements

Posted on 1 Sep 2015

In terms of the FAIS Act, all financial services providers (FSPs) must submit their financials within four months of their year-end. Most independent financial advisors (IFAs) have February year-ends and must therefore submit these by the end of June each year. Many FSPs find it challenging to submit their financials within the time frame because … Continued

Replacements under the Spotlight

Posted on 4 Aug 2015

We have seen an increased focus by the FSB on the activity of replacing one financial product with another, particularly in relation to long-term insurance products where the FSP is also a registered long-term insurer. The Retail Distribution Review also proposes a ban of commission on replacements of life risk products. Replacements, however, are not confined to this product type and have consequences for customers across all financial products.

Debarment of Representatives

Posted on 22 Jul 2015

In the June FAIS newsletter, Adv Matome Thulare, who is the Head of Department of FAIS Enforcement, wrote about the debarment of representatives and the difficulties it places on the FSP.

The FAIS Act became the first piece of legislation to regulate the rendering of advice and intermediary services in South Africa. It introduced “fit and proper” requirements to test the competence and fitness of principals and their representatives when rendering financial services.

Section 14(1) of the FAIS Act permits FSPs to act against representatives who are seen to be incompetent or unfit to render financial services. This part of the Act does however not allow the FSP to exercise its own discretion on deciding whether to debar such a representative as the provision makes it compulsory for FSPs to take action.

Short-term and Long-term Insurance – Proposed Fit & Proper Requirements

Posted on 23 Jun 2015

The Deputy Registrar of Short and Long Term Insurance has issued a board notice for public comment on the proposed fit and proper requirements to be prescribed pursuant to the definition of “fit and proper” in sections 1 of the Short-Term and Long-Term Insurance Acts. It is envisaged that the final requirements will be published … Continued

The Protection of Personal Information Act Phase II – Planning

Posted on 23 Jun 2015

The Planning phase is to ensure that everybody in the business is prepared for the developments which the Protection of Personal Information Act (POPI) will bring. The first phase of Awareness which was discussed in the previous issue, highlighted the steps to be taken to make the responsible parties aware of their role. The Planning … Continued

FAIS Circular 2 of 2015: Clarification of five year experience requirement

Posted on 9 Jun 2015

ITO Sections 6A and 8A of FAIS- all FSPs who are sole proprietors, key individuals and representatives must meet the experience requirements and continue to meet those requirements. The purpose of the five year requirement is to ensure that a person’s practical experience remains appropriate, applicable and relevant for the category of FSP and subcategory … Continued

Update on RDR

Posted on 9 Jun 2015

At the recent Discovery Financial Planning Summit Jonathan Dixon from the FSB shared some initial feedback after the industry submitted input/commentary on the RDR discussion paper. The FSB received close on 70 written submissions in response to the RDR paper and have already started to analyse the inputs received. Given that the proposals are the … Continued

Market Conduct Policy Framework: Create business sustainability by implementing TCF

Posted on 26 May 2015

In article one we dealt with implementing Business Planning and an Operations Plan in the business in order to embed TCF Outcomes 1, 4 and 6 in the business. In this article we deal with implementing a Marketing and Communications plan and the financial planning process which embeds TCF principles 2, 3, 4 and 5. … Continued

Levies on Financial Institutions

Posted on 26 May 2015

Board Notice 101 of 2015 sets out the levies to be paid by each type and category of financial institution. Section 19 of the Notice deals with levies on authorised financial services providers. Section 19 (1) deals with levies of Category I or IV FSPs. Section 19 (2) deals with levies to be paid by … Continued

FSB Compliance Reports

Posted on 12 May 2015

The FSB has published the 2015 Compliance Reports. The FAIS Notices set out the format of the various Reports and the date by which these must be submitted to the FSB. Your Masthead Compliance Officer will prepare and discuss your Compliance Report with you during the reporting period in order to ensure that it is … Continued

Request for public comments on the draft Financial Intelligence Centre Amendment Bill 2015

Posted on 28 Apr 2015

The National Treasury and the Financial Intelligence Centre (FIC) published the draft Financial Intelligence Centre Amendment Bill, 2015 (the Bill) as approved by Cabinet at its meeting on 15 April 2015. The Bill seeks to enhance South Africa’s ability to combat financial crimes by proposing measures to address threats to the stability of South Africa’s … Continued

Market Conduct Policy Framework: Implementing TCF Framework

Posted on 28 Apr 2015

In December 2014, the National Treasury published the discussion paper entitled, ‘Treating Customers Fairly in the Financial Sector: A Draft Market Conduct Policy Framework in South Africa’ (the Market Conduct paper), together with the second draft Financial Sector Regulation Bill (FSR Bill). The new regulatory environment will give effect to the Twin Peaks model of … Continued

Preparation of Annual Financial Statements

Posted on 14 Apr 2015

In terms of section 19(2) of the FAIS Act, all FSPs are required to submit financial statements to enable the FSB to determine if a FSP complies with the financial soundness requirement in terms of the Fit and Proper Requirements (BN 106 of 2008). These financial statements must be signed by the relevant person(s) before … Continued

Medical Aid Commission

Posted on 14 Apr 2015

A new notice has been issued regarding Commission payable by medical schemes to brokers. As from 1 March 2015 the maximum amount payable to a broker by a medical scheme was increased to R75,00 plus VAT per month. Click here for further information.

Protection of Personal Information Act (POPI)

Posted on 14 Apr 2015

Gaining a proper understanding of the Act will assist with implementing the correct systems and procedures to handling personal information. The aim of the Act is to promote transparency about information collected and its processing. It is essential for you to understand the spirit and purpose of the Act in order to know how to … Continued

Private Sector PAIA Manual Submission Extension

Posted on 31 Mar 2015

The right of access to information is entrenched under section 32 of the Constitution of the Republic of South Africa. Section 32 provides that everyone has the right of access to any information held by state; or held by any other person that is to be used for the protection or exercise of any right. … Continued

FSB acts to prohibit sign-on bonuses for financial advisers

Posted on 17 Mar 2015

An FSB press release on Friday, 13 March 2015 signals the first steps to be taken by the Regulator since sign-on bonuses were prohibited at the end of 2014. Click here to read more.

Market Conduct Policy Framework

Posted on 17 Mar 2015

Also released is a discussion document “Treating Customers Fairly in the Financial Sector: A Market Conduct Policy Framework for South Africa” which seeks to develop a comprehensive framework for how the market conduct regulator will operate, and measure if financial institutions treat their customers fairly. Comments on the market conduct discussion document will be accepted … Continued