Posted on 11 May 2021
In light of the Protection of Personal Information (POPI) Act 4 of 2013, gone are the days when you could keep records of Personal Information (PI) for ‘just in case’ or ‘because it might be useful someday’. The POPI Act contains specific requirements regarding the retention and destruction of PI of data subjects. Not only … Continued
Posted on 11 May 2021
The COVID-19 pandemic has left a trail of economic disaster and affected humanity like never before. Knowing the effect of the pandemic, you can plan the future of your business through your business plan. Exactly two years before the outbreak of COVID-19, the FSCA published Board Notice 194 of 2017. Chapter 5 Section 37(2)(a) stipulated … Continued
Posted on 11 May 2021
The Information Regulator provided an update on 4 May 2021, clarifying that the commencement of registration of Information Officers and/or Deputy Information Officers, is May 2021. It is important to note that May 2021 is therefore the period of registration of Information Officers and that this is not the deadline for registration. Existing Responsible Parties … Continued
Posted on 11 May 2021
The quarterly newsletter of the Ombud for Short-term Insurance (OSTI) Issue 1 of 2021 contains case studies related to claims which arose as a result of the COVID-19 pandemic and provides insight to how the OSTI dealt with this. These case studies highlight some of the practical issues that impacted short-term claims as a result … Continued
Posted on 11 May 2021
The Financial Sector Conduct Authority (FSCA) recently published FSCA Communication 6 of 2021 (FAIS) to provide clarity regarding the qualification requirements for Council of Medical Schemes (CMS) accreditation. The guidance was issued in response to numerous queries and complaints to the FSCA following the CMS’s refusal to renew the accreditation of brokers who were unable … Continued
Posted on 11 May 2021
A Media Statement issued by the Ministry of Finance dated 22 April 2021, announced that Mr Unathi Kamlana has been appointed as Commissioner of the Financial Sector Conduct Authority (FSCA). The appointment term is 5 years, effective from the date of assumption of duty, which is expected to be 1 June 2021. Ms Katherine Gibson … Continued
Posted on 10 May 2021
PI Cover FSPs are reminded to ensure that the Professional Indemnity (PI) Cover renewal process is commenced well before the renewal date to avoid a situation where their PI Cover has expired. Given concerns relating to increased cybersecurity and other risks during the lockdown period, FSPs should take this opportunity to review their business and … Continued
Posted on 15 Apr 2021
Continuous professional development (CPD) keeps professionals at the cutting edge of development in their industry. The financial advice industry is no exception: Board Notice 194 of 2017 makes CPD a fit and proper requirement for key individuals, sole proprietors and representatives. CPD is the process of lifelong learning by which you engage in activities that … Continued
Posted on 15 Apr 2021
The Council for Medical Schemes recently published Circular 18 of 2021 which contains the details on the adjustment of fees payable to brokers. The Minister of Health has approved an increase on the maximum fee that is payable by medical schemes to brokers with effect from 1 January 2021. Regulation 28(2) published in terms of … Continued
Posted on 15 Apr 2021
In July 2020, the Information Regulator published draft guidelines on the registration of Information Officers. The consultation period has since been completed and the Information Regulator recently published the final version of the guidance note relating to the registration of Information Officers and Deputy Information Officers. The Information Regulator is developing an online portal for … Continued
Posted on 15 Apr 2021
The Financial Intelligence Centre (FIC) Act imposes obligations on accountable and reporting institutions and other persons to report certain transactions to the FIC. The FIC obtains financial intelligence and other data from these reports which are filed in accordance with various sections of the FIC Act. Public Compliance Communication (PCC) 50 provides guidance to reporters … Continued
Posted on 15 Apr 2021
The Financial Intelligence Centre (FIC) recently issued Public Compliance Communication (PCC) 49 which provides guidance and clarity on certain money laundering (ML), terrorist financing (TF) and proliferation financing (PF) considerations and provides suggested resources that may be consulted in determining ML/TF/PF risks related to geographic areas. An accountable institution relies on different ML/TF/PF indicators to … Continued
Posted on 15 Apr 2021
In July 2020, the Financial Intelligence Centre (FIC) published draft Public Compliance Communication (PCC) 12A for public comment. The draft PCC provided guidance and clarity on what compliance activities can be outsourced by an accountable institution to third parties. The consultation period has since closed, and the FIC has recently published the final version of … Continued
Posted on 15 Apr 2021
Complete your CPD targets before the deadline – 31 May 2021 FSPs, KIs and Reps are reminded that the deadline to meet the minimum number of required CPD hours is 31 May 2021. For the 2020/2021 CPD cycle, an FSP, KI or a Rep that is authorised, approved or appointed to render or manage or … Continued
Posted on 17 Mar 2021
Replacement of financial products is a key part of professional and appropriate financial advice. As product providers develop new products and change existing products to meet the changing needs of clients, it may be necessary to cancel old products and replace them with new ones. Before doing so, consider the obligations placed on financial advisors … Continued
Posted on 17 Mar 2021
The Financial Sector Conduct Authority (FSCA) recently issued a notice informing the industry of a new FICA Directive to Provide Information (DPI) for 2021. The DPI must be completed by all Accountable Institutions and submitted online using the FSCA FAIS E-portal. Accountable Institutions are required to answer all questions on the DPI, which includes background … Continued
Posted on 17 Mar 2021
The Information Regulator, empowered to monitor and enforce compliance with the provisions of the Protection of Personal Information Act (POPIA), recently published the following: Commencement of Regulations The Regulations issued in terms of POPIA was published in December 2018 with the commencement dates to be determined by the Regulator at a later date. The Regulator … Continued
Posted on 17 Mar 2021
The Financial Sector Conduct Authority (FSCA) recently published three FSCA FAIS Notices relating to various exemptions: 1. FSCA FAIS Notice 15 of 2021 – Exemption of Juristic Representatives from section 13(1)(c) of the FAIS Act In terms of this Notice, a juristic representative is exempt from section 13(1)(c) of the FAIS Act when rendering a … Continued
Posted on 17 Mar 2021
The Financial Intelligence Centre (FIC) recently published Draft Public Compliance Communication 113 (draft PCC 113) which provides guidance on measures relating to Foreign Prominent Public Officials (FPPOs), Domestic Prominent Influential Persons (DPIPs), their family members and known close associates. The FIC has identified inconsistencies in Accountable Institutions’ understanding of when and how they determine if … Continued
Posted on 17 Mar 2021
Directive to Provide Information to the FIC issued by FSCA Accountable Institutions are reminded to complete and submit the Directive to Provide Information (DPI) by 31 March 2021. The DPI must be completed and submitted online using the FSCA FAIS e-portal. Liquidity Calculation Declaration Category II, IIA and III FSPs required to … Continued
Posted on 17 Feb 2021
It is critical to proactively implement the requirements of the Protection of Personal Information (POPI) Act – and Data Privacy Management in general – as all processing of personal information must comply to the Act by 1 July 2021. Postponing POPI Act compliance planning and implementation is a high risk, considering how seriously data breaches … Continued
Posted on 17 Feb 2021
The quarterly newsletter of the Ombud for Short-term Insurance (OSTI) Issue 4 of 2020 contains news and events, case studies, consumer tips, and an article on the OSTI’s complaints handling process. The case studies published in this issue focus on time-barred complaints, conditions for cover, and fraudulent claims. The case studies are intended to provide guidance … Continued
Posted on 17 Feb 2021
The Financial Sector Conduct Authority (FSCA) recently published a Press Release regarding the risks surrounding crypto-related investments. The FSCA is receiving a large number of complaints from investors who have lost their savings through investing in crypto-related investments, or where investors have fallen foul to scams packaged as a crypto investment promising unrealistic high returns. … Continued
Posted on 17 Feb 2021
The Financial Sector Conduct Authority (FSCA) recently published a draft exemption applicable to FSPs, Key Individuals and Representatives that render financial services in respect of credit life products and funeral products. Background and context In 2017, new classes and sub-classes of insurance business were introduced through the Insurance Act. In 2020, the Determination of Fit … Continued
Posted on 17 Feb 2021
On 4 February 2021, the Council for Medical Schemes (CMS) published PMB definition guideline: COVID-19 v7 which is an updated version of the Prescribed Minimum Benefits for COVID-19. The major changes in this version of the PMB guideline expands on: Inclusion of updated case definition Inclusion of COVID-19 vaccine as a PMB Inclusion of antigen testing … Continued
Posted on 17 Feb 2021
The Companies and Intellectual Property Commission (CIPC) recently published Notice 08 of 2021, introducing its new automated process registration system called K2. This new registration system will simplify the processes across its service provision which includes Name Reservation, Co-operative and Private company registration in a fully automated environment as a first phase. The new K2 … Continued
Posted on 17 Feb 2021
Annual Financial Statements FSPs with a financial year-end of 30 June who had to submit their AFS by 31 October 2020 but relied on the 4-month extension granted by the FSCA, must submit their AFS by 28 February 2021. FSPs that are required to submit Annexure A (FAIS Notice 82 of 2015) together with their … Continued
Posted on 19 Jan 2021
Amendments to the General Code of Conduct (GCoC) highlight again the importance of Treating Customers Fairly (TCF) and dealing efficiently with client complaints. With some of the amendments having taken effect on 26 December 2020, it’s important to revisit client service and client satisfaction in your FSP. Client satisfaction plays an essential role in the … Continued
Posted on 19 Jan 2021
It is now more important than ever to be proactive during this current lockdown phase and keep your clients close to you. We are in very uncertain and tumultuous times, and you have probably experienced this in your business. Your clients may be, at best, reluctant to invest and, at worst, withdrawing and realising their … Continued
Posted on 19 Jan 2021
A number of significant changes were introduced to the financial services industry in 2020, with amendments made to the General Code of Conduct (GCOC) and Fit and Proper requirements. Furthermore, all entities, including Financial Services Providers (FSPs), will also have to comply with the provisions of The Protection of Personal Information (POPI) Act by 30 … Continued
Posted on 19 Jan 2021
During December 2020, the Financial Sector Conduct Authority (FSCA) published a draft Conduct Standard setting out the principles and fit and proper requirements that Collective Investment Schemes (CIS) managers must comply with on an ongoing basis. The current Board Notice (BN 910) dealing with matters pertaining to fit and proper requirements of CIS managers which … Continued
Posted on 19 Jan 2021
The effect of the COVID-19 pandemic and resultant national lockdown has had an economic impact on several businesses across South Africa. Many businesses especially those in the hospitality and food service industries were faced with operational restrictions leading to a high rise in claims on business interruption policies. However, with legal complexities surrounding Contingent Business … Continued
Posted on 19 Jan 2021
In December 2020, the Minister of Health, Dr Zweli Mkhize announced the appointment of a new Council for the Council for Medical Schemes (CMS), taking into account the interests of members and medical schemes. The Council, which is empowered by the Medical Schemes Act (131 of 1998), consists of 15 members that represent a variety … Continued
Posted on 19 Jan 2021
The Council for Medical Schemes (CMS) has been in continuous engagements co-ordinating public-private sector collaborations aimed at ensuring that there is universal access to the COVID-19 vaccine. As a result, the COVID-19 vaccine has been included in the amended Prescribed Minimum Benefit regulations which were recently approved by the Minister of Health Dr. Zweli Mkhize. … Continued
Posted on 19 Jan 2021
Product Specific Training FSPs are reminded that Product Specific Training must be completed prior to rendering any financial service in respect of a particular financial product, which must include keeping up to date with any changes or amendments to financial products. The COVID-19 pandemic may result in product providers reconsidering benefits and/or exclusions in respect … Continued
Posted on 9 Dec 2020
In recent times cybercrime has become very prevalent in South Africa, particularly during the COVID-19 pandemic. When many people suddenly had to work from home when the national lockdown started, the focus of hackers shifted from email attacks to online attacks according to the global cyber security firm Kaspersky. Between February and March 2020 there … Continued
Posted on 9 Dec 2020
A joint media statement by the South African Reserve Bank, Financial Sector Conduct Authority, Payments Association of South Africa and the Banking Association South Africa was recently published stating that the issuing and the acceptance/collection of cheques will cease with effect from 31 December 2020. This decision was taken due to the numerous challenges associated … Continued
Posted on 9 Dec 2020
The Financial Sector Conduct Authority (FSCA) recently published a draft Declaration of crypto assets as a financial product under the FAIS Act. The manner in which crypto assets can be regulated has been under consideration by the National Treasury and relevant authorities for a number of years. In 2020, the Crypto Assets Regulatory Working Group … Continued
Posted on 9 Dec 2020
The Financial Sector Conduct Authority (FSCA) recently published Guidance Notice 1 of 2020 (FAIS) which provides clarity and guidance on the lapsing of licences issued in terms of the FAIS Act and the related duties of financial services providers (FSPs), Key Individuals, or other persons in control of the affairs of the FSP. The FSCA has … Continued
Posted on 9 Dec 2020
During this year we have published the various arrangements that the Companies and Intellectual Property Commission (CIPC) has made to cater for its services during the national lockdown amidst the COVID-19 pandemic. Some of these arrangements included extensions to file Annual Returns, compliance checklists, preparation of annual financial statements and the deferring of penalties. The … Continued
Posted on 9 Dec 2020
The Financial Sector Conduct Authority (FSCA) recently proposed further amendments to the FAIS General Code of Conduct (GCOC) which is intended to take effect early 2021. According to the statement supporting the proposed amendments, the amendments are necessary to contribute to the fulfilment of the FSCA’s legislated objectives and is intended to promote the fair … Continued
Posted on 9 Dec 2020
The Financial Sector Conduct Authority (FSCA) recently proposed amendments to the Determination of Fit and Proper Requirements which is intended to take effect early 2021. According to the statement supporting the proposed amendments, the main purpose of these amendments is to update the Determination in order to make provision to limit the need for further … Continued
Posted on 9 Dec 2020
Regulatory Exams, Class of Business and Qualification deadlines A reminder that supervised representatives who had a deadline that fell between 27 March 2020 and 30 November 2020 to comply with the Regulatory Exams, Class of Business Training and/or Qualification requirements have until 15 December 2020 to comply with the relevant requirement. CPD FSPs, KIs … Continued
Posted on 10 Nov 2020
As online communication with clients replaces face-to-face meetings, the risk of fraud, cyber threats and non-compliance with regulation increases. It is important to decide how you will communicate with your clients, taking into consideration their preferences, ability, technology capability and access to a stable internet connection. Alternative options to face-to-face meetings include email, telephone or … Continued
Posted on 10 Nov 2020
Due to the impact of COVID-19 on the financial services industry and the challenges that FSPs, key individuals and representatives might have faced in complying with various regulatory requirements, the Financial Sector Conduct Authority (FSCA) took a decision during April 2020 to grant exemptions and/or extensions regarding the submission of statutory returns and certain fit … Continued
Posted on 10 Nov 2020
The FSCA recently published two exemption notices FSCA INS Notice 19 of 2020 and FSCA INS Notice 20 of 2020 that affect premium collections by independent intermediaries. The two notices prescribe the extent and conditions of exemptions from certain sections of the Long-term and Short-term Insurance Acts and their respective Regulations. A Consolidated Report of … Continued
Posted on 10 Nov 2020
In its quarterly newsletter, the Ombudsman for Short-term Insurance (OSTI) provided an update on news and events from the office of the Ombud, a few case studies and consumer tips. Number of Complaints In the Ombudsman’s Briefcase: Issue 3 of 2020, the Ombud revealed that it saw a decline in the number of complaints lodged with … Continued
Posted on 10 Nov 2020
The Financial Sector Conduct Authority (FSCA) recently published a press release announcing that two divisional executives are set to retire from the offices of the FSCA. Jurgen Boyd, the Divisional Executive for Market Integrity Supervision, and Marius du Toit, the Divisional Executive for Specialist Support are set to retire after many years of service at … Continued
Posted on 10 Nov 2020
The Financial Sector Conduct Authority (FSCA) has recently published a series of administrative sanctions imposed on FSPs, that are accountable institutions, that were found to be non-compliant with the Financial Intelligence Centre Act (FICA). The administrative sanctions are a result of specific areas of non-compliance that the FSCA had identified during inspections that it had … Continued
Posted on 10 Nov 2020
Regulatory Exams, Class of Business and Qualification deadlines A reminder that supervised representatives who had a deadline that fell between 27 March 2020 and 30 November 2020 to comply with the Regulatory Exams, Class of Business Training and/or Qualification requirements have until 15 December 2020 to comply with the relevant requirement. CPD FSPs, KIs … Continued
Posted on 13 Oct 2020
Failure to appropriately advise a client, as required by Section 8 of the FAIS General Code of Conduct (GCOC), can result in serious consequences for both you and the client. In a 2016 Ombud Determination, a client alleged that her financial advisor had failed to appropriately advise her, despite having provided him with the necessary … Continued
Posted on 13 Oct 2020
The Financial Sector Conduct Authority (FSCA) filed an urgent application with the High Court which resulted in the liquidation of JP Markets (Pty) Limited in September 2020. The FSCA’s main contention was that JP Markets is an unlicensed over-the-counter (OTC) derivative provider. The FSCA relied on section 38B of the FAIS Act which allows the … Continued
Posted on 13 Oct 2020
Over the past few months, there has been much uncertainty regarding Contingent Business Interruption (CBI) insurance cover. The uncertainty stems from the many legal complexities surrounding CBI policy wordings. In a Press Release, the FSCA confirmed that it has been engaging with the non-life insurance industry on the most efficient way to approach the courts … Continued
Posted on 13 Oct 2020
The FSCA recently published Notification Form INS008 in terms of the Policyholder Protection Rules (PPRs) made under the Long-term Insurance Act (LTIA) and Short-term Insurance Act (STIA). The notification form must be used by insurers to notify the FSCA where there is an intention to terminate a group scheme policy as contemplated in Rule 20.2.4 and … Continued
Posted on 13 Oct 2020
On 29 September 2020, National Treasury published the second draft of the Conduct of Financial Institutions (COFI) Bill for public comment. The first draft of the Bill was published in December 2018 and was open for public comment until March 2019. The comment process allowed for issues to be more fully considered and the Bill … Continued
Posted on 13 Oct 2020
Deadline for payment of Levies FSPs are reminded that the FAIS Levy Invoices should have been received by the end of September, with payment due by 31 October 2020. If an FSP has not received their invoice, we suggest that they contact the FSCA to request that this be re-sent to them. Not having received … Continued
Posted on 15 Sep 2020
In Part 1 and Part 2 of our RDR series we looked at the consultation paper on Advisor Categorisation. In Part 3 we turned to the second consultation paper on Investment-related matters published at the end of 2019, and focused on how investment management will be defined and categorised from a licencing perspective, the impact … Continued
Posted on 15 Sep 2020
The FSCA recently published FSCA Communication 46 of 2020 on the use of pre-populated records of advice. The practice in the industry of using prepopulated records of advice for replacements have proved, in various instances, to contain incorrect advice based on factual errors. Such errors result in advice being provided on incorrect comparisons of policy wording, … Continued
Posted on 15 Sep 2020
The Financial Sector Conduct Authority (FSCA) published FSCA Notice 443 of 2020 on the Levies for Financial Institutions, 2020. The Notice has been through the consultation phase with interested parties having submitted their comments. Masthead considered the impact of the proposed increases in levies on independent financial advisors and submitted comments to the FSCA. For the … Continued
Posted on 15 Sep 2020
In 2017, the then FSB published FAIS Notice 110 of 2017 exempting Category I FSPs that are only licenced for Long-term Insurance subcategory A and/or Friendly Society Benefits from the Professional Indemnity (PI) and Fidelity Insurance Cover requirements (paragraphs 3(a) -(c) of BN123 of 2009) for a period of 3 years. The FSCA have recently … Continued
Posted on 15 Sep 2020
The Financial Sector Conduct Authority (FSCA) recently announced in a Press Release that Caroline da Silva, Divisional Executive of Regulatory Policy at the FSCA, has resigned with effect from 31 October 2020. The FSCA Commissioner, Advocate Dube Tshidi said: “During her time at the FSCA, Caroline has been an invaluable member of our executive team … Continued
Posted on 15 Sep 2020
Earlier this year we published the Companies and Intellectual Property Commission (CIPC) Notice on the various arrangements that the CIPC made to cater for its services during the national lockdown amidst the COVID-19 pandemic. The CIPC subsequently confirmed in CIPC Notice 21 of 2020 that where the filing period for Annual Returns falls within the … Continued
Posted on 15 Sep 2020
On 4 September 2020, the Council for Medical Schemes (CMS) published PMB definition guideline: COVID-19 v5 which is an updated version of the Prescribed Minimum Benefits for COVID-19. The major changes in this version of the PMB guideline expands on: Inclusion of the PMB DTP code for COVID-19 PMB recommendations on serological testing Pharmacological management is … Continued
Posted on 15 Sep 2020
Update your Competence Register FSPs must ensure that their Competence Register is updated with CPD activities within 30 days after the expiry of each CPD cycle. Those FSPs that relied on the extended CPD deadline of 31 August 2020 must update their Competence Register by 30 September 2020. CPD Plan FSPs that relied on the … Continued
Posted on 19 Aug 2020
In Part 1 and Part 2 of our RDR series we looked at the consultation paper on Advisor Categorisation. We now turn, in Part 3 and Part 4, to the consultation paper on Investment-related matters which is a follow-up from the regulators after they considered the feedback received on the 2018 Investment Document. The latest … Continued
Posted on 19 Aug 2020
During July 2020, the Information Regulator published draft Guidelines on the Registration of Information Officers. In terms of the Protection of Personal Information Act (POPIA), responsible parties are required to appoint and register an Information Officer. This is a two-step process firstly requiring that the Information Officer be appointed within the business and secondly, that … Continued
Posted on 19 Aug 2020
The Financial Intelligence Centre (FIC) published draft Public Compliance Communication (PCC) 12A together with a Consultation Note. Draft PCC 12A provides guidance and clarity on what compliance activities can be outsourced by an accountable institution to third parties and is an update to the existing PCC 12 which was issued in January 2012 dealing with … Continued
Posted on 19 Aug 2020
It is important to review your policies and procedures to bring them in line with the amendments to the General Code of Conduct (GCOC) for FSPs and Representatives, which were published on 26 June 2020. Some of the long-awaited amendments were effective immediately, while others come into effect in December 2020 or June 2021. It … Continued
Posted on 19 Aug 2020
The Financial Sector Conduct Authority (FSCA) has recently published a series of administrative sanctions that it meted out on FSPs that were found to be non-compliant with the provisions of the Financial Intelligence Centre Act (FICA). Accountable institutions are required to comply with a number of provisions of FICA when dealing with their customers. Certain … Continued
Posted on 19 Aug 2020
Circular 50 of 2020: Industry Update on Developments Relating to COVID-19 Exemptions and Guidelines The economic impact of the COVID-19 pandemic and related national lockdown has a direct impact on the livelihood of many medical scheme members and their ability to maintain their medical cover premiums as retrenchments and business closures escalate. The CMS has … Continued
Posted on 19 Aug 2020
In a FSCA Press Release dated 7 August 2020, the FSCA confirmed that Adv. Dube Tshidi has been appointed to perform the functions of the Commissioner. The designation is effective from 6 August 2020 for a three-month period, until 5 November 2020 or until a Commissioner is appointed and assumes office, whichever occurs sooner. Read … Continued
Posted on 19 Aug 2020
On 12 September 2019, the Financial Sector Conduct Authority (FSCA) imposed an administrative penalty of R100 million on MET Collective Investments (Pty) Ltd (METCI). This decision followed an investigation into METCI, after one of its unit trust funds, the Third Circle MET Target Return Fund, lost significant value during the period 8 to 11 December … Continued
Posted on 19 Aug 2020
On 12 August 2020, the FSCA published FSCA FAIS Notice 60 of 2020 which contains the prescribed form and manner for the registration of exemption of certain persons conducting financial services related business with a private equity fund. Those FSPs that are relying on any provisions of the exemption published in Board Notice 208 of … Continued
Posted on 19 Aug 2020
The Financial Sector Conduct Authority (FSCA) recently published a Press Release providing a brief update on the progress regarding the process of obtaining legal certainty on Contingent Business Interruption (CBI) Cover and related issues. The FSCA states that the process to obtain legal certainty through the courts regarding CBI cover may be lengthy and is … Continued
Posted on 19 Aug 2020
CPD extended deadline looming FSPs, Key Individuals and Representatives that did not meet the 31 May 2020 CPD deadline for the 2019/2020 CPD cycle, have until 31 August 2020 to obtain the required number of CPD hours that are relevant and appropriate for their role and the functions which they perform. Click here to read … Continued
Posted on 21 Jul 2020
In Part 1 on Advisor Categorisation we looked at the labels or titles that advisors will be allowed to use and we looked at what products PSAs and RFAs can provide. In this article, Part 2, we’ll look at proposed restrictions on licensing for both Reps and KIs. We will also consider what happens if … Continued
Posted on 21 Jul 2020
On 23 June 2020, the FSCA published a Press Release warning the public against an entity called Crowd1. Crowd1 is not an authorised Financial Services Provider (FSP) or Representative and is not authorised to render the financial services it is providing. There is also no record of a licence application with the FSCA. Crowd1 is … Continued
Posted on 21 Jul 2020
Proposed amendments to Schedules 1, 2 and 3 of the Financial Intelligence Centre Act (FICA) were published on 19 June 2020 for public comment. The proposed amendments seek to align FICA with the current International Standards of the Financial Action Task Force (FATF) and recent legislative amendments. A consultation paper providing explanatory notes to the … Continued
Posted on 21 Jul 2020
The economic impact of the national lockdown has been felt by several businesses across South Africa as many are dealing with operational restrictions. Among the hardest hit are the hospitality and food service industries where many may be forced to close their doors causing a ripple effect on the economy by adding to job losses. … Continued
Posted on 21 Jul 2020
CPD deadline for the 2019/2020 CPD Cycle FSPs, Key Individuals and Representatives that did not meet the 31 May 2020 deadline, have until 31 August 2020 to obtain the required number of CPD hours that are relevant and appropriate for their role and the functions which they perform. Read more in FSCA FAIS Notice 22 … Continued
Posted on 30 Jun 2020
On 22 June 2020, the President issued a Proclamation regarding the commencement of certain sections of the POPI Act, these refer to: sections 2 to 38; 55 to 109; 111 and 114(1), (2) and (3), which will all take effect on 1 July 2020. These sections deal with, inter alia, the purpose of the Act, … Continued
Posted on 30 Jun 2020
On 26 June 2020, the FSCA published FSCA Communication 35 of 2020 (FAIS) confirming publication of the following final amendments: Amendment of the General Code of Conduct for FSPs and Representatives; Amendment of the Specific Code of Conduct for FSPs and Representatives conducting Short-term Deposit business; and Amendment of the Determination of Fit and Proper … Continued
Posted on 30 Jun 2020
Amendments to the Fit and Proper requirements were published in the Government Gazette No. 43474 on 26 June 2020 and come into effect immediately. The amendments were primarily introduced to align the terminology in these requirements to the Insurance Act, the Long-term and Short-term Insurance Acts. However, in addition to these there are a few … Continued
Posted on 23 Jun 2020
The first RDR consultation paper was released almost 6 years ago in October 2014 and contained 55 proposals affecting financial advice and the distribution of financial products. In December 2019, the FSCA published an update and it is clear from this paper that there has been a lot of progress made even though there are … Continued
Posted on 23 Jun 2020
The 2019 Annual Report of the Ombudsman for Short-term Insurance (OSTI) released end May 2020 shows that the Ombud received 10 367 formal complaints for the 2019 period which was an increase from 9 779 complaints in the previous year, 2018. The OSTI closed 9 167 complaints in 2019 while 9 474 complaints were closed … Continued
Posted on 23 Jun 2020
The Financial Sector Conduct Authority, the Prudential Authority and the National Payment System Department of the South African Reserve Bank have recently published Joint Communication 7 of 2020 which sets out the minimum precautionary measures to be taken by financial institutions and payment institutions in light of the easing of lockdown levels amidst COVID-19. The Joint Communication … Continued
Posted on 23 Jun 2020
The Council for Medical Schemes (CMS) recently published PMB definition guideline: COVID-19 v3 which is an updated version of the Prescribed Minimum Benefits for COVID-19. This document may change as guidance changes and users should always check for updates on the National Institute for Communicable Diseases (NICD) and the National Department of Health (DOH) websites. The … Continued
Posted on 23 Jun 2020
CPD deadline for the 2019/2020 CPD Cycle FSPs, Key Individuals and Representatives that did not meet the 31 May 2020 deadline, have until 31 August 2020 to obtain the required number of CPD hours that are relevant and appropriate for their role and the functions which they perform. Read more in FSCA FAIS Notice 22 … Continued
Posted on 9 Jun 2020
Operating your business in a compliant manner includes formalising your knowledge of the financial products in which you render financial services and keeping your knowledge up to date thereafter. The Fit and Proper requirements specify how to comply with the Product Specific Training (PST) requirement but obtaining the training can sometimes be challenging. PST is … Continued
Posted on 9 Jun 2020
In an interview with Moneyweb on SAfm, the Deputy Ombud for Long-Term Insurance, Ms Jennifer Preiss, discussed the potential impact of COVID-19 and the resultant national lockdown on the Long-Term Insurance industry.[1] Why there might be a rise (spike) in Complaints[2] The Deputy Ombud warned that a prolonged national lockdown could lead to a spike … Continued
Posted on 9 Jun 2020
Keeping track of what must be done in an FSP and making time to address any gaps is key to remaining compliant and in business. In January we published Key Compliance Dates to help FSPs plan for the compliance requirements of 2020. Considering the impact of COVID-19 and subsequent developments, below is an update of … Continued
Posted on 9 Jun 2020
Medical schemes are looking for ways to deal with the negative impact of COVID-19 and have approached the Council for Medical Schemes (CMS) with requests for exemptions from the Medical Schemes Act (MSA). One of the measures offered to medical schemes was to allow, on application, the deferral of member contributions. This measure was offered … Continued
Posted on 9 Jun 2020
During October 2018, a draft Joint Standard for Significant Owners was released for public consultation. This was followed by a revised draft for further public consultation in July 2019. The draft standard together with the consultation report containing all comments and responses was later submitted to Parliament during November 2019. Most recently, on 1 June … Continued
Posted on 9 Jun 2020
On 1 June 2020, the FSCA published FSCA FAIS Notice 32 of 2020 which amended several exemptions relating to Private Equity Funds, with the effect that where an exemption was set to expire on 30 June 2020, it has now been extended until 30 June 2021. For purposes of these exemptions, “private equity funds” means … Continued
Posted on 9 Jun 2020
The Financial Sector Conduct Authority (FSCA) recently published the draft Conduct Standard and related documents on the Requirements related to the payment of pension fund contributions (draft Conduct Standard). The Statement supporting the publication states that the draft Conduct Standard is intended to replace Regulation 33, made under the Pension Funds Act, by providing for … Continued
Posted on 9 Jun 2020
The commencement dates of certain provisions that relate to Ombuds under the Financial Sector Regulation Act (FSRA) has been recently amended as published in Government Gazette No. 43371 (Government Notice 612 of 29 May 2020). Government Notice 612 has the following effect: The commencement date of Chapter 14 (sections 175 to 217) of the FSRA, … Continued
Posted on 9 Jun 2020
The Notices on Expanding Access to Living Annuity Funds were gazetted on 1 June 2020. These Notices give effect to tax measures to combat the economic effect of the national lockdown due to the COVID-19 pandemic, following the President’s address to the nation on 21 April 2020 and the announcement by the Minister of Finance … Continued
Posted on 9 Jun 2020
Category II, IIA & III FSPs required to report Assets under Management Category II, IIA and III FSPs must calculate their assets under management (AUM) as at 30 June 2020 and prepare this for submission to the FSCA. The FSCA has sent a FAIS Levy Letter (dated 15 July 2020) to Cat II, IIA and III FSPs … Continued
Posted on 26 May 2020
Recent events have not only highlighted the vulnerabilities of businesses around the world, but also the importance of having a comprehensive and effective disaster recovery plan for your business. Undoubtedly, cages have been rattled since the beginning of 2020. Puerto Rico was shaken by earthquakes and the Taal Volcano in the Philippines showed signs of … Continued
Posted on 26 May 2020
The COVID-19 loan guarantee scheme announced by President Cyril Ramaphosa in April recently came into operation on 12 May 2020. The loan guarantee scheme is an initiative to provide loans, guaranteed by government, to eligible businesses considering the economic effect of COVID-19. It is intended to help small and medium sized businesses with an annual … Continued
Posted on 26 May 2020
The FSCA and Prudential Authority (jointly referred to as the Authorities) recently published Joint Communication 4 of 2020 which provides clarity on certain regulatory requirements applicable to funeral insurance policies. The publication confirms the application of the maximum amounts prescribed as they relate to Funeral Class (Class 4) of insurance business. It also confirms the … Continued
Posted on 26 May 2020
The FSCA and Prudential Authority (jointly referred to as the Authorities) are engaging with the insurance industry on Business Interruption (BI) insurance to understand, inter alia, the full impact of BI claims following the outbreak of COVID-19. Joint Communication 5 of 2020, Covid-19 – Regulatory response: Business Interruption Insurance sets out the Authorities’ position on … Continued
Posted on 26 May 2020
The Ombudsman for Long-term Insurance (Ombud) released its Annual Report for 2019. The Report provides statistics on complaints received by the office with a trend of increasing funeral complaints. In summary, the following statistics were released: 11 915 written requests for assistance were received compared to 11 768 in 2018 (an increase of 147 requests). The … Continued
Posted on 26 May 2020
The South African financial market is experiencing significant volatility due to COVID-19, which has impacted on liquidity in certain portfolios. The Collective Investment Schemes Control Act (CISCA), in its current form, does not allow for mechanisms or tools to deal with the current market conditions. The FSCA have therefore decided to grant an exemption to … Continued
Posted on 26 May 2020
The Council for Medical Schemes (CMS) recently published Circular 35 of 2020 on the amendment to the Medical Schemes Act Regulations. The amendment includes an insertion of the Diagnosis and Treatment Pair in the list of Prescribed Minimum Benefits under the heading “Respiratory System”. In terms of the amendment, the following are now covered under … Continued
Posted on 26 May 2020
On 19 May 2020, the National Treasury published the 2nd revised 2020 Draft Disaster Management Tax Relief Bill and revised Draft Notice on Expanding Access to Living Annuity Funds with related documents. These documents announce certain tax measures to combat the economic effect of the national lockdown due to the COVID-19 pandemic, where one of … Continued
Posted on 26 May 2020
PI Cover FSPs are reminded to renew their PI Cover before the renewal date to avoid finding themselves in a situation where their PI Cover has expired. Failure to renew PI Cover on time will result in a gap in cover which can cause the FSP to face the risk that any losses which occur … Continued
Posted on 12 May 2020
In terms of the FAIS Act, a financial services provider (FSP) is responsible for the activities of its representatives which are performed within the scope of the representative’s contract. This responsibility cannot be taken lightly as the actions and decisions of representatives have implications for the FSP and its clients. Having the right contract in … Continued
Posted on 12 May 2020
There is no specific legislation or regulation that currently exists in South Africa for the use of crypto assets, which means that there is no legal protection or recourse offered to users of, or investors in, crypto assets. As the use of crypto assets continues to grow and evolve, a deeper collective understanding of this … Continued
Posted on 12 May 2020
On 23 April 2020, National Treasury published a media statement announcing certain tax measures to combat the economic effect of the national lockdown due to the COVID-19 pandemic. One of the interventions included in these tax measures related to expanding the access to living annuity funds. This will assist individuals who either need cash flow … Continued
Posted on 12 May 2020
Joint communication 2A of 2020 recently published by the FSCA updates the timeframes previously communicated regarding the submission of detailed Plans for compliance with ongoing customer due diligence (CDD) in terms of the FIC Act. Previous requirement: The previous communication, Joint Communication 2 of 2020, required accountable institutions to submit detailed Plans regarding ongoing CDD … Continued
Posted on 12 May 2020
The FSCA recently published two draft general exemption notices that affect premium collections by independent intermediaries. The proposed exemptions from certain sections of the Long-term and Short-term Insurance Acts and their respective Regulations were published together with FSCA Communication 22 of 2020 (INS) which sets out the background to the intention behind the proposed exemptions … Continued
Posted on 12 May 2020
As a rule, in terms of the Regulations passed under the Disaster Management Act, everyone needs to stay at home during Level 4 of lockdown. But, while it is preferable to continue to work remotely and avoid face-to-face advice interactions under Level 4, not everything done by financial advisors can be done remotely. Some things … Continued
Posted on 12 May 2020
CPD FSPs, KIs and Reps are reminded that the deadline to comply with the required number of CPD hours for the current CPD cycle has been extended to 31 August 2020. Those FSPs, KIs and Reps that have already attained the required number of CPD hours for the current CPD cycle will have to wait … Continued
Posted on 29 Apr 2020
The COVID-19 crisis has highlighted that we do not know what tomorrow, or next week or next month will bring. Having a well thought out Risk Management Plan (RMP) will ensure you are better prepared to handle a crisis. Risk management is part of your job. You help clients think about the future and plan … Continued
Posted on 29 Apr 2020
The Financial Sector Conduct Authority (FSCA) recently published FSCA FAIS Notice 21 of 2020 together with FSCA Communication 20 of 2020. These publications afford FSPs and Juristic Representatives an exemption from certain Financial Soundness Requirements. The Communication advises that the exemption was deemed necessary in order to alleviate some of the financial pressures experienced by FSPs and … Continued
Posted on 29 Apr 2020
The commencement dates of certain provisions that relate to Ombuds under the Financial Sector Regulation Act (FSRA) has been recently amended as published in Government Gazette No. 43131 (Government Notice 356 of 24 March 2020). Government Notice 356 has the following effect: The commencement date of Chapter 14 (sections 175 to 217) of the FSRA, … Continued
Posted on 29 Apr 2020
Various supervisory bodies have consulted the Financial Intelligence Centre (FIC) regarding the COVID-19 pandemic and possible impact on accountable institutions. These supervisory bodies include the Prudential Authority, the National Payment System Department, the Financial Surveillance Department of the South African Reserve Bank, as well as the Financial Sector Conduct Authority (FSCA) (jointly referred to as … Continued
Posted on 29 Apr 2020
The Financial Sector Conduct Authority (FSCA) recently published a Press Release warning the public against doing any financial related business with forex trading platforms that promise an income stream during the COVID-19 lockdown. It appears that these promises of income stream may be unrealistic. The Press Release states that the FSCA was informed that some … Continued
Posted on 29 Apr 2020
The adverse effects of the nationwide lockdown due to COVID-19 prompted many insurers to come out with their own responses regarding premium holidays or relief for consumers together with rules about the impact that has on benefits and rules about reinstating policies. As far as commission goes, the normal rule in terms of commission regulations … Continued
Posted on 29 Apr 2020
On 31 March 2020, the Financial Sector Conduct Authority (FSCA) published FSCA FAIS Notice 17 of 2020 on the exemption from and the extension of the period to comply with certain Fit and Proper Requirements. Subsequent to the publication, the FSCA withdrew FSCA FAIS Notice 17 of 2020 and substituted it with FSCA FAIS Notice … Continued
Posted on 29 Apr 2020
The Financial Sector Conduct Authority (FSCA) recently published FSCA Communication 18 of 2020 which provides clarity on the requirements for FSPs regarding the submission of Compliance Reports and FAIS Handover Reports. Communication 18 of 2020 explains that the FSCA did not publish any compliance reports or handover reports for 2019 or 2020, as the FSCA is … Continued
Posted on 29 Apr 2020
There seems to be some confusion between a Joint Directive issued by the Financial Sector Conduct Authority and the Prudential Authority (Authorities) on 9 April 2020 and Call Centre Directions issued on 9 April 2020 by the Minister of Health and the Minister of Trade, Industry and Competition to Call Centres providing essential services. As … Continued
Posted on 29 Apr 2020
The FSCA has warned that there is a rogue domain called www.fscaza.com which fraudsters used to send a phishing email to one of the FSCA’s service providers with the aim of soliciting financial gains. The domain has also been redirected to the FSCA’s legitimate domain to mislead unsuspecting stakeholders into believing the communication comes from … Continued
Posted on 29 Apr 2020
Renew PI Cover FSPs are reminded to check the status of their Professional Indemnity (PI) cover and to renew same if required. Failure to renew PI cover on time will result in a gap in cover which can cause the FSP to face the risk that any losses which occur during this period (prior to … Continued
Posted on 16 Apr 2020
You may have addressed business continuity and succession planning for your FSP, but there are almost certainly areas that have not been covered, and these gaps may exist in your FSP. In a previous article, we focused on the challenges a national disaster, like the Covid-19 lockdown, may bring to a business and the critical … Continued
Posted on 16 Apr 2020
An Intergovernmental Fintech Working Group (IFWG) was established in 2016 to understand the growing role of financial technology (fintech) and innovation in the South African financial sector and explore how regulators can proactively assess emerging risks and opportunities in the market. There are 6 regulators which participate in the IFWG, namely National Treasury, the Financial … Continued
Posted on 16 Apr 2020
The Information Regulator (Regulator) has published a Guidance Note on the Processing of Personal Information in the Management and Containment of the Covid-19 pandemic in terms of the Protection of Personal Information Act 4 Of 2013 (POPIA). While not all the sections of POPIA have come into effect, the Regulator encourages proactive compliance by responsible … Continued
Posted on 16 Apr 2020
The FIC has published a Web Notice – FIC Operations during Nationwide Lockdown, stating that there will be no relaxation of obligations in terms of the FIC Act in light of the lockdown. Accountable, reporting and other institutions must continue to fulfil the obligations imposed on them by the FIC Act, including filing regulatory reports … Continued
Posted on 16 Apr 2020
The Companies and Intellectual Property Commission (Commission) issued a practice note on 24 March 2020 confirming that where a company is temporarily insolvent and still carrying on business or trading due to business conditions which were caused by the Covid-19 pandemic, it will not invoke its powers under section 22 of the Companies Act which … Continued
Posted on 16 Apr 2020
The National Credit Act regulates credit insurance. Credit Providers, when extending credit or lending to customers, may require customers to either take out credit life insurance which would then cover the debt due to the credit provider in certain situations, such as death or retrenchment, or to cede an existing policy to the Provider. Final … Continued
Posted on 16 Apr 2020
In February 2020 the Financial Intelligence Centre (FIC) published a draft Public Compliance Communication (PCC) for comment, on the commencement and enforcement of the FIC Act as amended. The comments on the draft have since been considered and incorporated into the final PCC 46 where appropriate and was published by the FIC on 30 March … Continued
Posted on 16 Apr 2020
The Financial Intelligence Centre (FIC) published a draft Public Compliance Communication (PCC) for comment during January 2020, which set out guidance on the interpretation of Item 1 of Schedule 1 to the FIC Act in line with the changes as brought about by the Legal Practice Act 28 of 2014. The comments on the draft … Continued
Posted on 16 Apr 2020
The Financial Intelligence Centre (FIC) published a draft Public Compliance Communication (PCC) for comment during March 2020, which sought to clarify issues relating to the practical application of the requirements of the FIC Act by accountable institutions that offer life insurance products and/or who provide advice or intermediary services in relation to life insurance products … Continued
Posted on 16 Apr 2020
On 26 March 2020 the FSCA published an updated list of recognised qualifications for FSPs, Key Individuals and Representatives (FSCA FAIS Notice 16 of 2020), which replaces the previous list published by FAIS Notice 36 of 2019. The list includes qualifications which are recognised for each Category of FSP (i.e. Category I, II, IIA, III … Continued
Posted on 16 Apr 2020
FIC goAML Message Board FSPs that are accountable institutions, and therefore required to register on the FIC’s goAML system, are reminded to regularly log in to their goAML account and to check their Message Board. The Message Board will list all regulatory report receipts and other notifications from the FIC. It is used to send … Continued
Posted on 9 Apr 2020
The FSCA has announced that it will be working on limited capacity during the lockdown, therefore certain services may not be available. As correspondence and client enquiries will be made via email there may be delays in dealing with and responding to these. The services of the FSCA’s Licensing and Business Centre will continue to … Continued
Posted on 9 Apr 2020
The Financial Sector Conduct Authority (FSCA) recently issued a statement that the collection of blood samples as part of underwriting for new business does not qualify as an essential service and must be avoided during the national lockdown. The statement was supported by the long-term insurance members of the Association for Savings and Investment South … Continued
Posted on 9 Apr 2020
The Information Regulator of South Africa recently issued a press release about the importance of the right of access to information and the right to privacy in the management and containment of the spread of the COVID-19 virus. The Regulator commends government for the measures taken thus far to deal with the virus and calls … Continued
Posted on 9 Apr 2020
On 3 April 2020, the Financial Sector Conduct Authority (FSCA) published FSCA Communication 14 of 2020 (INS) which outlines the expectations of the FSCA regarding the culture and responsibilities of insurers and financial services providers (FSPs) in respect of premium collection of funeral policies during the COVID-19 crisis. The FSCA advises insurers to ensure that all … Continued
Posted on 9 Apr 2020
On 31 March 2020, the Financial Sector Conduct Authority (FSCA) published FSCA Communication 12 of 2020 which outlines the expectations of the FSCA regarding the culture and main responsibilities of financial institutions during the COVID-19 crisis. The Communication warns that entities must ensure that all customers are treated fairly during the entire product cycle and that … Continued
Posted on 9 Apr 2020
The COVID-19 crisis will affect all business sectors – but it especially puts a spotlight on insurers who are likely to be inundated with enquiries and claims across different products, for example health, life or non-life insurance cover. Life insurers will be considering their risks and may look to trim their policy offerings in the … Continued
Posted on 9 Apr 2020
The Financial Sector Conduct Authority (FSCA) has recently published FSCA FAIS Notice 17 of 2020 on the exemption from and the extension of period to comply with the Fit and Proper Requirements. This Notice comes after the FSCA published FSCA Communication 9 of 2020 which dealt with various extensions to regulatory requirements in light of the … Continued
Posted on 9 Apr 2020
The FSCA recently published FSCA General Notice 1 of 2020 on the extension of period for compliance with various requirements relating to the submission of statutory returns. Submission of Annual Financial Statements in respect of the FAIS Act As communicated in FSCA Communication 9 of 2020, FSPs are reminded that the period for submission of certain … Continued
Posted on 9 Apr 2020
The Financial Sector Conduct Authority (FSCA) recently issued two publications, regarding the payment of retirement fund contributions aimed at distressed employers and employees in light of the COVID-19 pandemic. The two communications published on the 26th and 27th of March 2020 were FSCA Communication 11 of 2020 (RF) and FSCA Press Release: FSCA issues guidance … Continued
Posted on 31 Mar 2020
President Cyril Ramaphosa announced on 23 March 2020 a 21-day nationwide lockdown. While we all have been watching the developments of the novel coronavirus (COVID-19), the unfolding crisis will impact the broader economy and, more specifically, financial advisory and investment management businesses. Times like this highlight the critical importance of planning for disaster and business … Continued
Posted on 31 Mar 2020
The Council for Medical Schemes (CMS) recently published two documents of note pertaining to the Coronavirus pandemic. These are the CMS Script Issue 1 of 2020 and Circular 25 of 2020. CMS Script Issue 1 of 2020 on the Coronavirus Disease (COVID-19) provides background information on the coronavirus outbreak, how the virus is spread, the risk … Continued
Posted on 31 Mar 2020
Earlier this year we published the Companies and Intellectual Property Commission (CIPC) Notice 52 of 2019 and subsequent media release which related to developments on the new requirement for all companies to submit a Compliance Checklist together with their Annual Return as of 1 January 2020. However, there is good news for those companies whose … Continued
Posted on 31 Mar 2020
The Financial Intelligence Centre (FIC) recently published Public Compliance Communication 44 (PCC 44) that provides guidance on the targeted financial sanctions regimes which are part of the regulatory framework of South Africa. South Africa’s targeted financial sanctions regimes are implemented through the country’s anti-money laundering and combating of the financing of terrorism (AML/CFT) legislative framework … Continued
Posted on 31 Mar 2020
In January 2020 the Financial Intelligence Centre (FIC) published a draft Public Compliance Communication (PCC) for comment, containing guidance to all reporters on the requirements set out in Directive 5 of 2019. The comments have since been considered and incorporated into the final Guidance Note (PCC 45) where appropriate and was published by the FIC … Continued
Posted on 31 Mar 2020
On 25 March 2020, the Financial Sector Conduct Authority (FSCA) published FSCA Communication 9 of 2020 which sets out the decision taken by the regulator with regard to complying with specific regulatory requirements in light of the impact of COVID-19 on the financial services industry. The FSCA is aware of the challenges that regulated entities … Continued
Posted on 31 Mar 2020
Ahead of the national lockdown, the Department of Co-operative Governance and Traditional Affairs issued amendments to the Regulations of the Disaster Management Act, 2002. The amendments to the Regulations provide clarity on, inter alia, the definitions of lockdown, essential services, essential goods and movement. The amendments also set out the provisions relating to the restriction … Continued
Posted on 31 Mar 2020
The Companies and Intellectual Property Commission (CIPC) has published a notice on the various arrangements it has made to cater for its services during the lockdown of South Africa amidst the COVID-19 pandemic. The notice states that for the purposes of Annual Returns, the filing period which falls within 25 March 2020 to 15 April … Continued
Posted on 31 Mar 2020
CMS Accreditation FSPs licensed to render Health Service Benefits are reminded that their CMS accreditation must be renewed before it expires. Individual brokers and broker organisations can renew accreditation commencing four months before the expiry of the current accreditation via the CMS online portal. A reminder that the manual system (hand delivery or email) to … Continued
Posted on 18 Mar 2020
Cybercrime is a serious matter of concern, not just for financial advisors but also for clients. By being aware of cybercriminals’ techniques and how they operate, and by taking reasonable precautions, you can remain alert and avert potential financial losses. In terms of section 11 of the FAIS General Code of Conduct: “A provider must … Continued
Posted on 18 Mar 2020
On 2 March 2020 the Financial Intelligence Centre (FIC) published two public statements on their website from the Financial Action Task Force (FATF). The public statements relate to jurisdictions under increased monitoring and high-risk jurisdictions that are subject to a call for action. 1. FATF public statement on high-risk jurisdictions that are subject to a … Continued
Posted on 18 Mar 2020
The Financial Intelligence Centre (FIC) recently published Draft Public Compliance Communication (PCC) 109 which provides guidance on the commencement and enforcement of the FIC Act as amended and which took effect on 2 October 2017. Draft PCC 109 states that accountable institutions must demonstrate full compliance with their obligations as set out in the FIC … Continued
Posted on 18 Mar 2020
FAIS General Code of Conduct and Short-term Deposits Code of Conduct Draft amendments to both the FAIS General Code of Conduct and Short-term Deposits Code of Conduct were published for public comment on 1 November 2017 by the then Financial Services Board (FSB). Masthead was one of sixteen commentators that submitted comments on the proposed … Continued
Posted on 18 Mar 2020
Annual Financial Statements All FSPs whose financial year end was on 31 December 2019 must ensure that their annual financial statements are submitted to the FSCA by 30 April 2020. FSPs which are required to submit Annexure A (FAIS Notice 82 of 2015) together with their Annual Financial Statements, are reminded to do so. CPD … Continued
Posted on 3 Mar 2020
Corporate governance is becoming increasingly important for the future fitness of financial service providers (FSPs), as legislation in the financial services industry moves from a rules-based approach to a principle-based approach. Corporate governance is the system by which companies are directed and controlled. Key Individuals, either in their own capacity or as a member of … Continued
Posted on 3 Mar 2020
On 25 February 2020, the Financial Sector Conduct Authority (FSCA) published their Annual Perimeter Report for 2020. The Report provides information on the FSCA’s mandate, who they regulate, their jurisdiction and current uncertainties of jurisdiction. What is the FSCA’s Perimeter The FSCA’s mandate is set out in the Financial Sector Regulation Act (FSRA) which also … Continued
Posted on 3 Mar 2020
Financial Services Providers (FSPs) have to consider and plan for several different requirements in the FAIS legislation relating to financial management, which goes beyond just the numbers. With many FSPs having just gone through their financial year end (i.e. end Feb 2020), it is as good a time as any to review the various financial … Continued
Posted on 3 Mar 2020
On 21 February 2020, the Council for Medical Schemes (CMS) published Press Release 2 of 2020, titled LCBO and Demarcation stakeholder engagements a success, which praised its recent stakeholder engagements on Low Cost Benefit Options (LCBOs) and Demarcation products as a success. The engagement sessions were held in Pretoria and Cape Town on 23 January … Continued
Posted on 3 Mar 2020
Annual Financial Statements (AFS) All FSPs whose financial year end was on 31 December 2019 must ensure that their annual financial statements are submitted to the FSCA by 30 April 2020. FSPs which are required to submit Annexure A (FAIS Notice 82 of 2015) together with their Annual Financial Statements, are reminded to do so. … Continued
Posted on 18 Feb 2020
The requirements of section 8(4)(a) of the FAIS General Code of Conduct (the Code) apply when addressing a client’s specific need, however, an Ombud determination highlights the implied duties that are also required of you. You can only avoid doing a full financial needs analysis if a client does not provide adequate information or if … Continued
Posted on 18 Feb 2020
The Council for Medical Schemes (CMS) recently published Circular 7 of 2020 which contains the details on the adjustment of fees payable to brokers. The Minister of Health has approved an increase on the maximum fee that is payable by medical schemes to brokers with effect from 1 January 2020. Regulation 28(2) published in terms … Continued
Posted on 18 Feb 2020
Directive 5 of 2019 was published by the Financial Intelligence Centre (FIC) during March 2019. The Directive relates to the usage of an Automated Transaction Monitoring System (ATMS) for the detection and submission of regulatory reports to the Centre in terms of section 29 (Suspicious and Unusual Transactions) of the FIC Act. Directive 5 places … Continued
Posted on 18 Feb 2020
A media release recently published on the website of the Ombud for Long-term Insurance stated that a new portal had been launched to assist complainants to lodge insurance related complaints. This portal was introduced shortly after the news that there would be a joint Ombudsman for both long-term and short-term insurance complaints with effect from … Continued
Posted on 18 Feb 2020
The Companies and Intellectual Property Commission (CIPC) previously announced that it is a mandatory requirement for all companies to submit a Compliance Checklist together with their Annual Return as of 1 January 2020. The checklist enables companies to declare their compliance status to specific sections of the Companies Act. CIPC will utilise the Checklist to … Continued
Posted on 18 Feb 2020
Competence training requirements 1. Class of Business Training FSPs, Key Individuals and Representatives are reminded to ensure that any Class of Business Training that has been completed must be added to the Competence Register within 15 days after the training occurred and all information and documentation relating to the training must be retained for … Continued
Posted on 4 Feb 2020
Voice recordings of your conversations with clients are an acceptable record of advice and may be used for your defence in the event of a dispute with a client. The FAIS General Code of Conduct for Authorised Financial Services Providers and Representatives (GCOC) requires providers to maintain a record of advice, which must reflect the … Continued
Posted on 4 Feb 2020
Financial advisors and asset managers must proceed with caution when offering, promoting or marketing offshore Collective Investment Schemes to their clients as the Collective Investment Schemes Control Act (CISCA) criminalises soliciting of investments in unapproved offshore investment funds. A person found guilty of this offence is liable on conviction to a fine not exceeding R10 … Continued
Posted on 4 Feb 2020
The Council for Medical Schemes (CMS) recently announced in Circular 3 of 2020 that it launched an online application portal that allows applicants to register and submit all broker applications for accreditation. The portal that went live on 20 January 2020 is also designed to allow individual brokers and broker organisations to renew accreditation commencing … Continued
Posted on 4 Feb 2020
During December 2019 the Council for Medical Schemes (CMS) published Circulars 80 and 82 of 2019 which announced its plans for Low Cost Benefit Options (LCBOs) and the Demarcation Exemption Framework. On 23 January 2020, the CMS further published Circular 5 of 2020 which stated that it will be hosting engagement sessions to unpack and … Continued
Posted on 4 Feb 2020
Several media publications reported that the Information Regulator recently requested the President to declare that the remaining provisions of the Protection of Personal Information Act (POPIA) commence on 1 April 2020. Certain sections of POPIA are already in effect such as the definitions in section 1, the establishment of the Information Regulator and the procedure … Continued
Posted on 4 Feb 2020
On 23 January 2020, the FSCA published Communication 1 of 2020 together with FSCA (INS) Notices 1 and 2 of 2020. The publications inform stakeholders that the general extension for compliance with Regulation 4.2(3) of the Regulations made under the Short-term Insurance Act (STIA) and Regulation 8.2(2) of the Regulations made under the Long-term Insurance … Continued
Posted on 4 Feb 2020
The FSCA recently published a press release that the Intergovernmental Fintech Working Group (IFWG) published its first Fintech Landscaping Report on 22 January 2020. The press release explains that Fintech is technology-enabled financial innovation which can lead to new business models, applications, processes and products, and is transforming the financial services sector globally. The research … Continued
Posted on 4 Feb 2020
Liquidity Calculation Declaration FSPs that are required to maintain liquid assets and whose financial year end was 31 December 2019, are required to submit Form A: Liquidity Calculation (Annexure six of BN 194 of 2017) to the FSCA by 14 February 2020. Juristic Reps that are required to maintain liquid assets and whose financial year … Continued
Posted on 21 Jan 2020
Keeping track of what must be done in an FSP and making time to address any gaps is key to remaining compliant and in business. Below we share some key dates and offer general reminders to help FSPs plan for the compliance requirements of 2020. General reminders: Ensure all information regarding the FSP’s profile on … Continued
Posted on 21 Jan 2020
The Companies and Intellectual Property Commission’s (“CIPC”) Annual Return is a statutory requirement in Section 33(1) of the Companies Act 71 of 2008 (as amended) (“Companies Act”), that states that every company must file an Annual Return in the prescribed form, with the prescribed fee, and within the prescribed period after the anniversary of the … Continued
Posted on 21 Jan 2020
The National Treasury published draft amendments to the regulations made in terms of the Financial Sector Regulation Act (FSRA). The draft amendments are proposed to regulations 3, 9, 10 and 11 of the current Financial Sector Regulations and aim to: Streamline the recruitment process for the Commissioner and Deputy Commissioners of the FSCA. Empower the … Continued
Posted on 21 Jan 2020
The FSCA published FSRA Exemption Notice 5 of 2019 on 19 December 2019, which came into effect on 1 January 2020. This Notice exempts certain microinsurers who offer credit life microinsurance policies from certain requirements of Rule 2A.10.1 of the Long-term Insurance Policyholder Protection Rules. This Rule prohibits a microinsurance policy benefit payable as a … Continued
Posted on 21 Jan 2020
The FSCA’s predecessor, the Financial Services Board, published its Retail Distribution Review (RDR) discussion document in November 2014. Since then, there have been various subsequent RDR communications with the most recent of these being published during December 2019 where six new documents have been made available to the public on the FSCA website. The December … Continued
Posted on 21 Jan 2020
Although there is still no indication as to when the Protection of Personal Information Act (POPIA) will come into force, there have been some recent developments related to POPIA. The Information Regulator published draft Guidelines to develop Codes of Conduct under the Protection of Personal Information Act. The draft Guidelines set out the structure and … Continued
Posted on 21 Jan 2020
During October 2019 the Financial Intelligence Centre (FIC) published the draft Public Compliance Communication 103 which provided guidance to the NPO sector, NPO Regulators and third parties dealing with NPOs, regarding measures that could be implemented in order to combat terrorist financing and money laundering risks within the NPO sector. The draft PCC was made … Continued
Posted on 21 Jan 2020
Class of Business deadline for Reps under Supervision Reps appointed under supervision before 1 February 2019 are reminded that they have until 31 January 2020 to meet the Class of Business training requirements. Masthead has partnered with Milpark Education, an accredited provider and higher education institution to offer you Class of Business training. Click here … Continued
Posted on 11 Dec 2019
Integration of IT systems between insurers and binder holders Binder holders are reminded that from 1 January 2020, they will be required to provide insurers with access to up-to-date, accurate and complete data at the following intervals: Daily – in respect of policies other than funeral and assistance policies Monthly – in respect of funeral … Continued
Posted on 11 Dec 2019
The FSCA recently published extensions to four exemption notices. These are: FSCA FAIS Notice 86 of 2019 The FSCA amended the Schedule to the Notice on Exemption of Particular FSPs from section 13 of the General Code of Conduct. Category I or Category IV FSPs that are also underwriting managers and that only render specific … Continued
Posted on 11 Dec 2019
Several significant regulatory changes were introduced to the financial services industry this year. Here are some of the highlights, as well as a heads-up for some of the changes which come into effect in 2020. December 2018 / January 2019 FAIS Notice 86 of 2018, published by the FSCA in December 2018, impacted FSPs that … Continued
Posted on 26 Nov 2019
Integration of IT systems between insurers and binder holders Binder holders are reminded that from 1 January 2020, they will be required to provide insurers with access to up-to-date, accurate and complete data at the following intervals: Daily – in respect of policies other than funeral and assistance policies Monthly – in respect of funeral … Continued
Posted on 26 Nov 2019
The Ombud for Short-term Insurance (OSTI) recently published its quarterly newsletter: The Ombudsman’s Briefcase Issue 3 of 2019, which contains news and events from OSTI, a few case studies and consumer tips. The case studies are intended to provide guidance and insight into the way the OSTI deals with complaints. In this issue, the case … Continued
Posted on 26 Nov 2019
The Financial Intelligence Centre (FIC) recently published a Collection of Case Studies and Indicators relating to financial crimes in South Africa. The Indicators included in this publication are to assist in identifying criminal activity as they set out examples or common methods used in financial crimes. These case studies and indicators can help FSPs to … Continued
Posted on 26 Nov 2019
The office of the FAIS Ombud has released a statement that Advocate Nonkumbulo Tshombe (preferred Name: Nonku) will take over from Naresh Suresh Tulsie as the new Ombud for Financial Services Providers. Advocate Tshombe assumed the role of Ombud effective 1 November 2019. The office of the FAIS Ombud stated that under the guidance of … Continued
Posted on 26 Nov 2019
The Department of Trade and Industry published a Notice that the Companies and Intellectual Property Commission (CIPC) has introduced a new electronic filing channel for Company and Close Corporation forms. The electronic web-based portal is called Bizportal and is a platform developed by the CIPC to offer company registration and related services in a simple … Continued
Posted on 26 Nov 2019
The Financial Sector Conduct Authority (FSCA) shifted compliance from rules and standards to principles on 1 April 2018 through Board Notice (BN) 194 of 2017. The advice industry now needs to comply with subjective issues such as honesty, integrity and good standing. How does one measure honesty? What is the defining criteria of integrity? What … Continued
Posted on 12 Nov 2019
Review your Business Plan As we approach the end of 2019, FSPs are reminded that they should begin planning and considering the needs of the business for 2020. The Business Plan should be reviewed and updated according to changes in the business and should include the aims and scope of the business as well as … Continued
Posted on 12 Nov 2019
The Financial Sector Conduct Authority (FSCA) has published its first Annual Report for 2018/2019 which provides information on the performance of the regulator and its various divisions, as it transitioned operations of the Financial Services Board (FSB) to the FSCA. During the period 1991 to 2018 the FSB was mandated to supervise and enforce compliance … Continued
Posted on 12 Nov 2019
The Financial Intelligence Centre (FIC) recently published draft Public Compliance Communication 105 (draft PCC 105) for public comment. The draft PCC 105 provides guidance on the use of reliance agreements by accountable institutions for customer due diligence (CDD) on shared clients. Accountable institutions are required to implement a Risk Management and Compliance Programme (RMCP) that, … Continued
Posted on 12 Nov 2019
The Financial Intelligence Centre (FIC) released its 2018/19 Annual Report which contains an overview of the work that the FIC has been involved in for the past year. The Report sets out information regarding the FIC’s performance, governance, human resource management, financial information and a materiality and significance framework. The Report also contains various case … Continued
Posted on 12 Nov 2019
An important consideration when you are a Financial Services Provider (FSP) is what will happen to your business in the untimely event of your death, temporary disability or decision to retire. Succession planning goes beyond meeting regulatory requirements. You may be encouraged to evaluate your financial position and determine if you can afford to retire, … Continued
Posted on 29 Oct 2019
Deadline for payment of Levies FSPs are reminded that the FAIS Levy Invoices should have been received with payment due by 31 October 2019. If an FSP has not received their invoice, we suggest that they contact the FSCA to request that this be re-sent to them. Failure to pay levies timeously can result in licence suspension. … Continued
Posted on 29 Oct 2019
The Financial Action Task Force (FATF) have identified non-profit organisations (NPOs) as entities which are vulnerable to abuse by criminals for terrorist financing and money laundering. In light of this, the Financial Intelligence Centre (FIC) recently published the draft Public Compliance Communication 103 (draft PCC 103) which provides guidance to the NPO sector, NPO Regulators … Continued
Posted on 29 Oct 2019
The Financial Intelligence Centre (FIC) recently published two notices on their website from the Financial Action Task Force (FATF) namely: FATF public statement on jurisdictions with strategic anti-money laundering (AML) Counter-terror financing (CFT) deficiencies and the FATF ongoing process to improve global AML/CFT compliance 1. FATF public statement on jurisdictions with strategic AML/CFT deficiencies – … Continued
Posted on 29 Oct 2019
New rules in terms of the Promotion of Access to Information Act 2 of 2000 (PAIA) have been published and come into operation on 4 November 2019. The rules set out the procedure for application to court which must be followed in all applications relating to section 78 of PAIA. Section 78 of PAIA pertains to … Continued
Posted on 29 Oct 2019
The FSCA recently published a Press Release warning the public against Fern Finance (Pty) Ltd (Fern). Fern was previously licensed by the FSCA as a Financial Services Provider (FSP) but had its licence withdrawn on 10 October 2019 for failure to comply with the provisions of the FAIS Act and for contravening section 7(1) of … Continued
Posted on 29 Oct 2019
FSPs can take steps to avoid a situation where they are facing a FAIS Ombud complaint after an insurer declines a client’s claim. There are examples where FSPs help their clients to submit a claim to the insurer and it backfires. The insurer repudiates the client’s claim, so the dissatisfied client looks to the advisor … Continued
Posted on 15 Oct 2019
Deadline for payment of Levies FSPs are reminded that the FAIS Levy Invoices should have been received with payment due by 31 October 2019. If an FSP has not received their invoice, we suggest that they contact the FSCA to request that this be re-sent to them. Failure to pay levies timeously can result in licence suspension. … Continued
Posted on 15 Oct 2019
The FSCA recently published a draft exemption in terms of the Collective Investment Schemes Control Act (CISCA). The draft exemption proposes to exempt managers and auditors of collective investment schemes (CIS) from the application of section 74(1)(a) and 2(c) of the CISCA, which determines the accounting standard to be applied by managers and auditors of … Continued
Posted on 15 Oct 2019
The Financial Sector Conduct Authority (FSCA) recently published FSRA Compliance Extension Notices namely 1 and 2 of 2019 for Short-term and Long-term Insurance respectively (Notices). In terms of these Notices, the FSCA granted an extension for the period of compliance with Regulation 4.2(3) of the Regulations made under section 70 of the Short-term Insurance Act … Continued
Posted on 15 Oct 2019
The FSCA recently published a Press Release regarding the fine that it imposed on MET Collective Investments (Pty) Ltd (METCI). The administrative penalty of R100 million was a result of METCI contravening various sections of financial sector laws including section 4 of the Collective Investments Schemes Control Act (CISCA) and Board Notice 90 and 92. … Continued
Posted on 15 Oct 2019
FSPs must strive to maintain and adopt the highest ethical standards and values in their business activities and practices. This includes avoiding, eliminating or mitigating conflict of interest. A recent FAIS Ombud determination in the case of K.R. Morulane v Silver Seed Capital (Pty) Ltd and 2 others reveals why it is crucial to declare … Continued
Posted on 2 Oct 2019
Levies due and payable FSPs are reminded that the FAIS Levy Invoices should have been received with payment due by 31 October 2019. If an FSP has not received their invoice, we suggest that they contact the FSCA to request that this be re-sent to them. Failure to pay levies timeously can result in licence suspension. … Continued
Posted on 2 Oct 2019
The FSCA published a few press releases warning the public against doing any financial services business with various named entities. The said entities are not authorised in terms of the Financial Advisory and Intermediary Services Act. FSPs are reminded that should you receive any marketing material or are approached to market a product, you should … Continued
Posted on 2 Oct 2019
The FSCA recently published a Press Release regarding the fine that it imposed on the Steinhoff Group. The Steinhoff Group were being investigated, by the FSCA, due to alleged contraventions of the Financial Markets Act in the period prior to the discovery of significant accounting irregularities at the Company in December 2017. The Press Release … Continued
Posted on 2 Oct 2019
“Free Lunch” During the mid-1800’s taverns in the USA (particularly around New Orleans) would advertise a “free lunch” to lure in customers during the mid-day hours. They would tell prospective customers that if they bought a drink, they’d get a free lunch. So, as much as the lunch sounds free, customers were expected to first … Continued
Posted on 17 Sep 2019
Keep a look out for your Levy Invoice The FSCA will prepare and send Levy Invoices to FSPs towards the end of September 2019. FSPs are reminded to check that the FSCA has their most up-to-date contact details to ensure that the invoice reaches the FSP and can be paid before the deadline date of 31 … Continued
Posted on 17 Sep 2019
The Council for Medical Schemes (CMS) will be hosting an advanced training programme for accredited healthcare brokers in Cape Town on 9 October 2019. Details on induction sessions for brokers in other provinces will be made available on the CMS website: www.medicalschemes.com The training will among others, cover the following topics: Broker Conduct, Pitfalls and … Continued
Posted on 17 Sep 2019
The Financial Intelligence Centre (FIC) clarified its role in a media release published on 4 September 2019. The publication followed several queries from the media on whether the FIC had acted lawfully in providing certain information to the Office of the Public Protector. The FIC stated that whilst it does not usually address issues through … Continued
Posted on 17 Sep 2019
Government Notice 1130 of 30 August 2019, published in a recent Government Gazette (No. 42677), amended dates in previous Government Notices (General Notice 142 of 18 March 2019 and Government Notice 1019 of 28 September 2018) which relate to provisions on the Ombud. Government Notice 1130 has the following effect: The commencement date of Chapter … Continued
Posted on 17 Sep 2019
Before you appoint a representative, check if the applicant has a date of first appointment (DOFA), as this will determine if the applicant has time to comply with the fit and proper requirements. A DOFA is the date on which one is first appointed as a representative of an authorised Financial Services Provider (FSP) and … Continued
Posted on 3 Sep 2019
Levies – ensure contact details are updated FSPs will be issued with an invoice by the FSCA towards the end of September 2019 for the levies applicable to their FSP. FSPs are reminded to check that all their information and contact details on the FSCA’s website is up-to-date and correct to ensure that their Levy … Continued
Posted on 3 Sep 2019
The FSCA has published a warning to the public against doing any financial services with Destinata 104 (Pty) Ltd and Wealth Solutions Investments & Development Partners. The said entities are soliciting funds from members of the public by offering investment opportunities in the student accommodation sector. They promise a total net return of 230% on … Continued
Posted on 3 Sep 2019
The Ombud for Short-term Insurance (OSTI) recently published a media release directed at policyholders listing “five ways in which your conduct could invalidate your insurance policy”. The media release is based on common things that consumers do which may result in the insurer cancelling cover or refusing to pay out a claim. While the media … Continued
Posted on 3 Sep 2019
On 18 April 2019, the FSCA informed FSPs that in place of the 2019 Annual or Bi-annual Compliance Reports, there would be a General Request for Information (RFI). At the end of August, the FSCA published FSRA Notice 1 / 2019 (General) and FSCA Communication 1 of 2019 (General) informing FSPs that an RFI template, in … Continued
Posted on 3 Sep 2019
Being compliant by staying on top of regulatory requirements is one of the main concerns that keeps advisors up at night, according to a recent Masthead survey. This concern is understandable, as the financial services industry has become increasingly regulated with a focus on rendering financial services within the framework of treating customers fairly. Complying … Continued
Posted on 20 Aug 2019
Update Rep Register A reminder that levies due by FSPs will be calculated based on the information available to the FSCA as at 31 August 2019. It is, therefore, important for FSPs to ensure that their representative register is up to date and to check that all their information is correct. FSPs can notify the FSCA of any … Continued
Posted on 20 Aug 2019
The FSCA has announced that it will be hosting workshops from September 2019 until February 2020. The workshops are aimed at small FSPs and SMME FSPs and focus on the requirements to maintain an existing licence. The workshop will be run over one day. The two main topics for the day will be understanding how … Continued
Posted on 20 Aug 2019
Earlier this year Masthead communicated the delay of the commencement date relating to the chapter on Ombuds in the FSRA. This is a reminder that Chapter 14 of the FSRA, which contains sections 175 to 217, will come into effect on 1 September 2019. The FSRA will also repeal the Financial Services Ombud Schemes Act … Continued
Posted on 20 Aug 2019
In the previous issue of Mastering Compliance, we published the new contact details and updated Rules of the Financial Services Tribunal (Tribunal) which took effect on 1 August 2019. In this issue we take a closer look at the Tribunal and the Rules. The Tribunal was established in terms of section 219 of the Financial … Continued
Posted on 20 Aug 2019
Dealing with an Ombud complaint is time consuming and stressful. By keeping abreast of Ombud determinations, you can learn valuable lessons that will enable you to circumvent such complaints from arising in your business. Click here to read about the main reasons why the Ombud made a determination against FSPs and advisors.
Posted on 6 Aug 2019
Category II, IIA & III FSPs required to report assets under management Category II, IIA and III FSPs must calculate their assets under management (AUM) as at 30 June 2019 and prepare this for submission to the FSCA by no later than 21 August 2019. Read the FSCA 2019 AUM Levy Letter. Update your … Continued
Posted on 6 Aug 2019
The Financial Services Tribunal which replaced the FSB Appeal Board in April 2018, is responsible for the reconsideration of decisions made by decision-makers as defined in section 218 of the Financial Sector Regulation Act. The Tribunal published a new set of rules which came into effect on 1 August 2019 and communicated their new address … Continued
Posted on 6 Aug 2019
ASISA recently published the following Standards on their website: ASISA Retail Standard on Effective Annual Cost ASISA Retirement Fund Standard: Effective Annual Cost for Individual Fund Members ASISA Standard: Calculation and Disclosure of Total Expense Ratios and Transaction costs These Standards should help advisors fulfil their duties to clients when providing advice and/or intermediary services … Continued
Posted on 6 Aug 2019
The FSCA published FSRA Exemption Notice 1 of 2019 – Exemption of certain insurers from Rule 19 of the Policyholder Protection Rules (Long-term insurance) and Regulation 3.9a of the Regulations under the Long-term Insurance Act, 1998, on 22nd July 2019. The purpose of this Notice is to exempt insurers that offer assistance policies, funeral policies or … Continued
Posted on 6 Aug 2019
The provisions contained in section 8 of the General Code of Conduct (GCoC) are not optional, which means you are responsible for the suitability of advice rendered to clients. Section 2 of the GCoC indirectly highlights the importance of determining the suitability of advice: “A provider must at all times render financial services honestly, fairly, … Continued
Posted on 23 Jul 2019
Category II, IIA & III FSPs required to report assets under management Category II, IIA and III FSPs must calculate their assets under management (AUM) as at 30 June 2019 and prepare this for submission to the FSCA by no later than 31 July 2019. CPD Exemption FSPs, KIs and Reps that are making … Continued
Posted on 23 Jul 2019
The Ombud for Short-term Insurance (OSTI) recently published its quarterly newsletter: The Ombudsman’s Briefcase. This Issue 2 of 2019 announces the new appointment of Latoya Masango as Assistant Ombudsman. The issue also contains excerpts from the 2018 Annual Report, information on the Annual Report launch where Senior Assistant Ombudsman, Ayanda Mazwi, presented the statistical analysis … Continued
Posted on 23 Jul 2019
The Office of the FAIS Ombud recently published details of a settled complaint regarding replacement of policies. In this matter the complainant acted in the capacity of an Executor for the deceased’s estate whose life insurance policy had been cancelled and replaced with a new policy with another insurer. A claim to the new insurer … Continued
Posted on 23 Jul 2019
The Financial Sector Conduct Authority (FSCA) published a draft Notice on the Levies of Financial Institutions on 6 June 2019 and invited interested parties to submit their comments by 21 June 2019. Masthead considered the impact of the proposed increases in levies on independent financial advisors and submitted comments to the FSCA. The FSCA has … Continued
Posted on 23 Jul 2019
The Financial Intelligence Centre Amendment Act (Amendment Act) brought about various changes yet many financial advice businesses have not comprehended the effect of such changes. This places them at risk in the event of a compliance inspection. Some important changes brought by the Amendment Act is that it imposed a new set of obligations on … Continued
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
Posted on 9 Jul 2019
Regulation 28 (Reg 28) under the Pension Funds Act aims to ensure that the savings South Africans contribute towards their retirement is invested in a prudent manner that not only protects the retirement fund member but is also channeled in ways that achieve economic development and growth. Reg 28 promotes responsible investing of fund assets, … Continued
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
Posted on 9 Jul 2019
The Financial Intelligence Centre (FIC) Appeal Board Rules sets out the rules and procedures to be followed when lodging an appeal against a decision made by a decision-maker (either the FIC or a supervisory body in accordance with section 45C of the Financial Intelligence Centre Act, 2001). The rules, inter alia, also contain a precedent … Continued
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
Posted on 9 Jul 2019
One of the Fit and Proper requirements listed in chapter 5 of Board Notice 194 of 2017 is that each FSP must have a business plan that includes the aims and scope of the business as well as the business strategies. As we enter the second half of 2019, FSPs should begin planning ahead and … Continued
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
Posted on 25 Jun 2019
FSCA Communication 5 of 2019 (Insurance), recently published by the FSCA together with other related documents, contains the format for the replacement advice record (RPAR) in terms of Rule 19 of the Long-term Insurance Policyholder Protection Rules (PPRs) with an effective date of 1 September 2019. The Communication provides a brief background on Rule 19 … Continued
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
Posted on 25 Jun 2019
The FSCA recently published FSCA Communication 1 of 2019: Scripted Execution of Sales. The Communication applies to all Category I Financial Services Providers (FSPs) and is aimed at providing guidance on the process to follow when amending the profiles of representatives to include scripted execution of sales. An FSP that meets the requirements applicable to … Continued
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
Posted on 11 Jun 2019
FSPs must ensure that the Competence Register is updated with CPD activities within 30 days after the expiry of each CPD cycle i.e. 30 June.
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
Posted on 11 Jun 2019
The FSCA Bulletin released for Quarter 4 2018/19 is themed around the Conduct of Financial Institutions (COFI) Bill. The Bill seeks to streamline the legal framework for the regulation of the conduct of financial institutions and focuses on the implementation of the Treating Customers Fairly (TCF) principles. The Bulletin also contains various regulatory topics, warnings … Continued
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
Posted on 11 Jun 2019
The Determination of Fit and Proper Requirements for Financial Services Providers (BN194 of 2017) prescribes that an FSP, a KI and a Rep must have a qualification recognised by the Financial Sector Conduct Authority (FSCA). The FSCA, either on application by a person or at their own initiative will recognise a qualification for each category … Continued
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
Posted on 28 May 2019
The next CPD cycle will start on 1 June 2019 until 31 May 2020. FSPs, KIs, and Reps are advised to put a CPD Plan together in order to manage and plan ahead to ensure that the type and combination of CPD activities undertaken are relevant, contribute to the knowledge, skills and ethical standards of … Continued
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
Posted on 28 May 2019
The FSCA Bulletin released for Quarter 3 2018/19 contains various regulatory topics, warnings / enforcement actions, events, and consumer education pertaining to the financial industry. This issue of the Bulletin sets out the FSCA’s three year regulatory strategy and gives insight on the strategic priorities for the Authority going forward. The Prudential Authority also outlines … Continued
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
Posted on 28 May 2019
Various amendments to the Financial Intelligence Centre Act, 2001 (as contained in the Financial Intelligence Centre Amendment Act 1 of 2017) were set to come into effect on three different dates. These dates were 13 June 2017, 2 October 2017, and “dates to be determined”. In April 2018 the Financial Sector Conduct Authority (FSCA) communicated … Continued
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
Posted on 28 May 2019
A recent Ombud determination highlights the importance of adhering to the FAIS General Code of Conduct (GCoC) when rendering financial services and the duty to investigate a client’s needs when providing advice. In the case of Bongani Nxumalo v Central Financial Advisors (Pty) Ltd t/a Coler Financial Services Providers, the financial service provider (FSP) assisted … Continued
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
Posted on 14 May 2019
The Financial Sector Conduct Authority (FSCA) recently published the first Draft Conduct Standard applicable to Banks. The objective of the draft Conduct Standard is to introduce requirements that promote the fair treatment of financial customers of banks. Submissions on the draft Conduct Standard must be sent to the FSCA at FSCA.RFDConductStandardBanks@fsca.co.za by 18 June 2019 … Continued
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
Posted on 14 May 2019
The latest newsletter of the Ombud for Short-term Insurance (OSTI): The Ombudsman’s Briefcase Issue 1 of 2019 published on the OSTI’s website contains a few case studies, consumer tips and announcements. Some of the announcements are the OSTI’s Annual Report launch and the OSTI’s new complaint handling process. The OSTI’s Annual Report for 2018, which … Continued
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
Posted on 14 May 2019
There has been much debate about risk profiling and its relevance – or lack thereof – in determining an appropriate investment solution for customers. Stepping away from this controversy, we look at what else financial advisors should consider about the customer when deciding on an investment strategy. Gathering information is a critical step in the … Continued
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
Posted on 30 Apr 2019
The Conduct of Business Division at the FSCA recently sent out a notification regarding a general request for information (RFI). The notification explains that the purpose of the RFI is to confirm that the FSPs’ business information as per FSCA’s records is accurate and to identify where there are discrepancies. If, as a result of … Continued
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
Posted on 30 Apr 2019
The Conduct of Financial Institutions (COFI) Bill was published by National Treasury in December 2018 and industry was given until the end of March 2019 to comment. The COFI Bill is an important development for FSPs as it will replace the FAIS Act as the main market conduct legislation. There are currently 13 different financial … Continued
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
Posted on 17 Apr 2019
The next CPD cycle will commence on 1 June 2019 until 31 May 2020. FSPs, KIs, and Reps are advised to put a CPD Plan together in order to manage and plan ahead to ensure that the type and combination of CPD activities undertaken are relevant, contribute to the knowledge, skills and ethical standards of … Continued
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.
Posted on 17 Apr 2019
FSPs are reminded to check the status of their Professional Indemnity (PI) Cover and to renew same if required. Failure to renew PI Cover on time will result in a gap in cover. Such a gap can cause the FSP to face the risk that any losses which occur during this gap period (prior to … Continued
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
Posted on 17 Apr 2019
The National Treasury recently published a list of sections from the Financial Intelligence Centre Amendment Act that commenced on 1 April 2019. The sections relate to the identification of persons and entities by the United Nations Security Council and the imposition of financial sanctions. In particular, the sections which came into effect are: Section 2(a) … Continued
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
Posted on 17 Apr 2019
The Financial Intelligence Centre recently released a Notice on Targeted Financial Sanctions (TFS) List in accordance with Section 26A of the Financial Intelligence Centre Act, 2001. The FIC Act[1] prohibits any dealings with a person or an entity that has been identified pursuant to a resolution of the Security Council of the United Nations. The … Continued
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
Posted on 2 Apr 2019
The Council for Medical Schemes (CMS) recently published the Demarcation Exemption Renewal Framework. Background The Demarcation Regulations which came into effect on 1 April 2017, identified the types of contracts that, despite the contracts meeting the definition of the business of a medical scheme in the Medical Schemes Act[1] (MSA), are “health policies” or “accident … Continued
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
Posted on 2 Apr 2019
All FSPs whose financial year end was on 31 December 2018 must ensure that their annual financial statements (AFS) are submitted to the FSCA by 30 April 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 … Continued
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
Posted on 2 Apr 2019
On 27 March 2019, the FSCA published an update on the development of a format for the replacement advice record (RPAR) in terms of Rule 19 of the Policyholder Protection Rules (PPRs) made under section 62 of the Long-term Insurance Act. Rule 19 of the PPRs sets out the prerequisites for a long-term insurer when … Continued
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
Posted on 2 Apr 2019
On 25 March 2019, the Financial Intelligence Centre (FIC) published a booklet on Typologies and Case Studies specifically focusing on money laundering vulnerabilities faced within the Casino and Gaming industry and the Property sector. One of the main aims of the FIC is to protect the financial integrity of South Africa. In fulfilling this aim, … Continued
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
Posted on 19 Mar 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 accredited CPD activities. To view a list of all our CPD activities, click here.
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
Posted on 19 Mar 2019
The Financial Intelligence Centre (FIC) and National Treasury recently published draft regulations and draft guidance notes for public comment. The draft regulations address sections 28 and 31 of FICA which deal with Cash Threshold Reporting (CTR) and Aggregation, and International Funds Transfer Reporting (IFTR) respectively. The draft regulations were published together with a consultation paper … Continued
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
Posted on 19 Mar 2019
The FSCA reminds consumers who wish to conduct financial services with an institution or person to check that they are authorised by the FSCA and clarify the exact services that person or institution is authorised to offer. Click on the links be to read the media releases published by the FSCA in this regard: The … Continued
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
Posted on 5 Mar 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). CAT I FSPs that hold client assets … Continued
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
Posted on 5 Mar 2019
On 21 February 2019 the Council for Medical Schemes (CMS), regulator of the medical schemes industry, announced the appointment of Dr. Sipho Kabane as the Chief Executive and Registrar for the regulator. Read CMS Circular 12 of 2019 to find out more about the appointment.
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
Posted on 5 Mar 2019
The Financial Intelligence Centre Act (FICA), as amended, requires all Accountable Institutions (AIs) to have a Risk Management and Compliance Programme (RMCP) in place. The requirement to implement a RMCP came into effect on 2 October 2017, and since then the RMCP has been a buzzword in the financial industry with many articles and workshops … Continued
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
Posted on 19 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 upcoming Compliance Reports must, therefore, be submitted to the FSCA by 28 February … Continued
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
Posted on 19 Feb 2019
The Council for Medical Schemes recently published Circular 4 of 2019 detailing the adjustment of fees payable to brokers. The Minister of Health has approved an increase on the maximum fee that is payable by medical schemes to brokers with effect from 1 January 2019. Regulation 28(2) published in terms of the Medical Schemes Act, … Continued
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
Posted on 19 Feb 2019
Authorised Financial Services Providers (FSP) and their juristic representatives are required to comply with financial soundness requirements applicable to their category(ies) of license and the type of financial services which they provide. FSPs that do not continuously meet these requirements face the risk of license suspension or even licence withdrawal. Some FSPs have additional reporting … Continued
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
Posted on 5 Feb 2019
FSPs that are required to maintain liquid assets and whose financial year end was 31 December 2018, are required to submit a Liquidity Calculation Declaration to the FSCA by 14 February 2019.
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
Posted on 5 Feb 2019
The Ombud for Short-term Insurance (OSTI) published its quarterly newsletter during December. Issue 4 of 2018 of the Ombudsman’s Briefcase contains consumer tips and case studies intended to provide guidance and insight into the way the OSTI deals with complaints. The case studies in this issue focus on misrepresentation or non-disclosure when completing an insurance … Continued
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
Posted on 5 Feb 2019
The National Treasury will be hosting public workshops in February and March to support the consultation process on the Conduct of Financial Institutions (COFI) Bill which was published in December 2018. FSPs are encouraged to attend these workshops as once the COFI Bill comes into effect, it will repeal the FAIS Act. The activities and … Continued
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
Posted on 5 Feb 2019
In the previous issue of Mastering Compliance, we unpacked part of the new Supervision Notice (FSCA FAIS Notice 86 of 2018) which impacts FSPs who have Reps under Supervision. (Click here to read Part 1) Part 1 covered Definitions, Entry Level Requirements, Regulatory Exams, Class of Business Training, Qualifications, CPD, and the Experience requirements of … Continued
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
Posted on 22 Jan 2019
On 11 December 2018, the National Treasury published the COFI Bill together with an explanatory policy paper. In a media statement, the National Treasury explained that the COFI Bill is the next phase (after the Financial Sector Regulation Act) of the legislative reforms aimed at strengthening the regulation of how the financial services industry treats … Continued
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
Posted on 22 Jan 2019
FSCA FAIS Notice 86 of 2018 was published on 3 December 2018 and impacts FSPs who have Reps under Supervision. The Notice comes into effect on 1 February 2019 except for the provisions relating to Supervision Agreements that have a delayed effective date which is set out below. The ‘new’ Exemption of Services Under Supervision … Continued
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
Posted on 22 Jan 2019
There is a new version of RE 1 and RE 5 examinations which will apply to all who register to write these examinations after 1 February 2019. The FSCA published the Exemption of Services under Supervision (FAIS Notice 86 of 2018) during December 2018. This exemption will come into effect on 1 February 2019. As … Continued
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
Posted on 4 Dec 2018
Short-term advisors who charge clients a fee over and above that earned for “rendering services as intermediary” are reminded to implement an explicit, written fee agreement before Rule 12.4.1 of the Short-term Insurance Policy Holder Protection Rules takes effect on 1 January 2019 as per the amended Policy-Holder Protection Rules.
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
Posted on 4 Dec 2018
The FSCA released a statement on the Momentum/Ganas case following the decision made by Momentum to make payment in relation to a life policy claim after Momentum initially rejected the claim of R2.4 million. Momentum refused to pay out the life cover claim to the widow of the deceased, N. Ganas, due to non-disclosure of … Continued
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
Posted on 4 Dec 2018
On 3 December 2018, the FSCA published FAIS Notice 86 of 2018: Exemption of Services under Supervision. The Notice exempts certain Financial Services Providers and Representatives from provisions of the Financial Advisory and Intermediary Services (FAIS) Act 37 of 2002 as set out in the Schedule. Masthead will unpack the Exemption of Services under Supervision … Continued
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
Posted on 20 Nov 2018
FSPs are reminded that their Representatives (where necessary) must complete Product Specific Training prior to rendering any financial services in respect of that particular financial product(s). Product Specific Training also includes amendments and therefore if there are any changes to a financial product, training needs to be provided to the Representative to ensure understanding of … Continued
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
Posted on 20 Nov 2018
The Ombud for Short-term Insurance (OSTI) released its latest newsletter: The Ombudsman’s Briefcase Issue 3 of 2018. In this issue: The OSTI announces that consumers of Short-term Insurance can now submit online applications to lodge complaints via the OSTI website. Read case studies which focus on Enforcing Policy Provisions, Non-payment of Premiums, and Full and … Continued
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
Posted on 20 Nov 2018
The Financial Intelligence Centre (FIC) hosted Compliance and Awareness roadshows throughout the country during September and October 2018. The presentation used during the roadshows is available on the FIC website. The presentation addresses the key amendments to the Financial Intelligence Centre Act such as a Risk Based Approach, the Risk Management and Compliance Programme (RMCP), … Continued
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
Posted on 20 Nov 2018
The FSCA published the Draft Conduct Standard on the criteria for Living Annuities in a Default Annuity Strategy for public comment. The Draft Conduct Standard is aimed at: Providing guidance on the interpretation of sustainable income, Providing guidance on the need to monitor and communicate income sustainability to pensioners in the default living annuity, and … Continued
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
Posted on 6 Nov 2018
Short-term advisors who charge clients a fee over and above that earned for “rendering services as intermediary” are reminded to implement an explicit, written fee agreement before Rule 12.4.1 of the Short-term Insurance Policy Holder Protection Rules takes effect on 1 January 2019. To read more on Rule 12.4.1, click here
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
Posted on 6 Nov 2018
The National Treasury recently published amendments to the Regulations made under section 72 of the Long-Term Insurance Act and section 70 of the Short-Term Insurance Act. On 26 October 2018 they further published a notice to clarify the commencement date of some of these amendments. The Amendments to the Regulations must now be interpreted to … Continued
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
Posted on 6 Nov 2018
Somebody broke into my son’s luggage when he flew home for the recent holidays, so I went to our local luggage shop to replace it. The perfect shell suitcase was there, branded with characters from the Star Wars franchise. Pleased with the new suitcase, I went home and showed my son, who is a Star … Continued
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.
Posted on 23 Oct 2018
The Financial Intelligence Centre has published an unofficial text of the Financial Intelligence Centre Act and the Money Laundering and Terrorist Financing Control Regulations. This publication is a consolidation of various anti-money laundering and counter-terrorism financing legislation and includes the Prevention of Organised Crime Act as well as the Protection of Constitutional Democracy against Terrorist … Continued
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
Posted on 23 Oct 2018
Financial crime has become increasingly sophisticated. Criminals often venture several avenues to bypass the financial system, including cyber-attacks, cryptocurrency transactions and even kidney donor charity scams. The FIC published an insightful booklet, Typologies – September 2018, which highlights some of the methods criminals use to abuse the financial system. The Typologies booklet also provides tips … Continued
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
Posted on 23 Oct 2018
This Consultation Paper was published by the FSCA on 31 July 2018 to obtain public commentary on the Draft Exemption of Services under Supervision. The Draft Exemption allows a Representative who does not fully meet the competency requirements to work under supervision subject to compliance with certain conditions. Masthead has published a short series of … Continued
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
Posted on 23 Oct 2018
A lot has been written about the new Fit and Proper requirements contained in Board Notice 194 of 2017, but we still find a number of questions and uncertainty around Product Specific Training (PST). So, in this article we unpack PST in more detail. If we look at the definition of PST in BN 194, … Continued
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.
Posted on 9 Oct 2018
Category IV FSPs must submit their Annual Compliance Reports to the FSCA on or before 31 October 2018 in terms of FAIS Notice 54 of 2018. FSPs and Compliance Officers are encouraged to submit their reports using the FSCA’s online submission method on the FSCA website: www.fsca.co.za Should you have any enquiries relating to the submission of the report, please contact your … Continued
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
Posted on 9 Oct 2018
The Financial Sector Conduct Authority published the amendments to the Policyholder Protection Rules prescribed under section 62 of the Long-Term Insurance Act and section 55 of the Short-Term Insurance Act. The Amendments took effect on 1 October 2018. To download all the documents relating to these amendments, click here.
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
Posted on 9 Oct 2018
Central to the Financial Advisory and Intermediary Services (“FAIS”) Act and the Retail Distribution Review (“RDR”) is quality and suitable advice to clients. In this article we look at how some of the main proposed amendments to the FAIS General Code of Conduct published for consultation in November 2017[1] will impact an advisor’s advice process. … Continued
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
Posted on 26 Sep 2018
The Financial Sector Conduct Authority (Conduct Authority) published a draft Conduct Standard setting out the proposed requirements for the conduct of cell captive insurance business in relation to third party risks. Although the period for submission of comments has closed, it is important for any person who has entered into a cell structure arrangement to … Continued
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
Posted on 26 Sep 2018
The new Fit and Proper Requirements (Board Notice 194 of 2017) requires Financial Service Providers (FSPs) to implement and adopt a governance framework, which must include a business plan. A business plan is a tool that helps pave the way for the future of a business. It is like a roadmap for your business that … Continued
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
Posted on 11 Sep 2018
On 30 August 2018, the Financial Sector Conduct Authority (FSCA) warned the public to act with caution when dealing with Tshwaranang Community Stockvel (Tshwaranang) as this Stockvel is not authorised to render any financial advice and/or intermediary services. According to the information received by the FSCA, there is a person(s) purporting to act for Tshwaranang … Continued
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
Posted on 11 Sep 2018
“It takes many good deeds to build a good reputation, and only one bad one to lose it.” Benjamin Franklin Many advisors do not follow all the necessary steps when providing advice, which leaves them exposed to client complaints. If these are escalated to the FAIS Ombud, who then finds in favour of the complainant, … Continued
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
Posted on 28 Aug 2018
March 2012, National Treasury published the discussion document “Reducing the risks of over-the-counter derivatives in South Africa” to outline the proposed policy approach to regulating OTC derivative markets. The Financial Service Conduct Authority (FSCA) has now published a report on the consultation undertaken during the making of Conduct Standard 1 of 2018 which sets out … Continued
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
Posted on 28 Aug 2018
Proposed amendments to the General Code of Conduct (Code) under the FAIS Act for Authorised Financial Services Providers and Representatives seek to align advertising requirements to those set out in the Long-Term and Short-Term Insurance Policyholder Protection Rules. The proposed amendments aim to ensure transparency, raise the standard for advertising and marketing and help the … Continued
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
Posted on 14 Aug 2018
The Financial Sector Conduct Authority (the Authority) published the Exemption of Certain Representatives from Class of Business Training Requirements, 2018 (the Exemption) on 6 August 2018. In terms of Section 29 of the Determination of Fit and Proper Requirements for Financial Services Providers, representatives must, prior to rendering any financial services, complete class of business … Continued
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
Posted on 14 Aug 2018
The Financial Intelligence Centre (FIC) has the authority to reprimand institutions and can also impose penalties on institutions when they do not comply with regulation. If the FIC or a supervisory body finds that an accountable or reporting institution or any person with an obligation to comply with the Financial Intelligence Centre Act (Act) has … Continued
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
Posted on 31 Jul 2018
In terms of section 52(13) of the Determination of Fit and Proper Requirements for Financial Services Providers, 2017 (“Determination”), a person who is authorised, approved or appointed after 1 April 2018 but prior to 1 August 2018 has until 1 August 2019 to comply with the class of business training requirements set out in Part … Continued
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.
Posted on 17 Jul 2018
The Prudential Authority and the Financial Sector Conduct Authority (FSCA) issued Joint Communication 2 of 2018 which indicates which of the regulatory policy proposals in the Third-party Cell Captive Insurance and Similar Arrangements Discussion Paper, 2013 relate to prudential matters and which relate to conduct of business matters. The Communication provides an update on how, … Continued
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
Posted on 17 Jul 2018
The FSCA has released a discussion document on investment related matters in the context of the Retail Distribution Review (RDR) initially published in November 2014. Subsequent status updates were published in December 2016 and more recently in June 2018. One of the main objectives of the RDR is to address the risk of conflicts of … Continued
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
Posted on 17 Jul 2018
The FSCA has published Board Notice 89 of 2018 which prescribes a new format for a licence for an authorised financial services provider (FSP). Click here for Board Notice 89 of 2018.
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
Posted on 3 Jul 2018
On 28 June 2018 the Financial Sector Conduct Authority published the following Compliance Reports: FAIS Notice 32 of 2018 – Compliance Report for Category I FSP with Compliance Officer FAIS Notice 33 of 2018 – Bi-Annual Compliance Report for Category II and IIA FSP FAIS Notice 34 of 2018 – Bi-Annual Compliance Report for Category … Continued
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
Posted on 3 Jul 2018
On 15 June 2018 the Financial Sector Conduct Authority (Authority) published FAIS Notice 23 of 2018 which exempts FSPs from fees payable to the Authority in respect of certain amendments to approved mandates. This Notice came into operation on the date of publication. Any Category II, IIA and/or III FSP that was authorised for Long-term … Continued
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
Posted on 20 Jun 2018
The Financial Sector Conduct Authority’s (FSCA) has published an update on the status of the Retail Distribution Review (RDR). The RDR proposed a number of regulatory reforms related to the distribution of financial products and the provision of financial advice. The FSCA continues to roll out the RDR reforms, underpinned by its statutory mandate to … Continued
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
Posted on 20 Jun 2018
The Financial Intelligence Centre (FIC) released a Typologies document that gives an overview of nine different types of criminal activities and methods used to abuse the financial system. Amongst these are Money Laundering, Corruption, Cybercrime. This is a worthwhile read as each type of criminal activity is thoroughly explained and accompanied by a real-life scenario … Continued
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
Posted on 20 Jun 2018
All FSPs must have a Governance Framework that provides for the fair treatment of customers and prudent oversight of the business. This is one of the terms of the new Fit and Proper requirements that came into effect from 1 April 2018. The framework consists of several policies and procedures. As all businesses are different, … Continued
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
Posted on 5 Jun 2018
The new Fit and Proper Requirements [1] made provision for six new product categories (subcategories). In this article we discuss three of these product categories. Three new product categories (namely Long-term Insurance B1-A, Long-term Insurance B2-A and Short-term Insurance Personal Lines A1) were created ‘out of’ three existing product categories (i.e. Long-term Insurance B1, Long-term Insurance … Continued
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
Posted on 5 Jun 2018
Client complaints to the FAIS Ombud are at a record high, which emphasises the importance for Financial Service Providers (FSPs) to keep comprehensive records of advice. The FAIS Ombud, who investigates and resolves complaints in terms of the FAIS Act and its Rules, received 10 846 complaints from 1 April 2016 to 31 March 2017. Rising … Continued
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.
Posted on 22 May 2018
The transition to advice-based fees can reduce the impact of the proposed RDR changes on your business and improve business sustainability. The Retail Distribution Review (RDR) discussion document released in 2014 proposed changing the remuneration structures for financial advisors. Masthead proposed that the Financial Sector Conduct Authority (FSCA, previously known as the FSB) allow for … Continued
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
Posted on 9 May 2018
Read more about Masthead’s easy-to-use online Competence Register The Fit and Proper requirement to implement a Competence Register came into effect on 1 May 2018. FSPs must be able to report to the Registrar if asked to do so, and therefore must establish a Competence Register where they must keep a record of all qualifications, … Continued
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
Posted on 9 May 2018
The proposed changes to the General Code of Conduct (GCoC) published during November 2017 applies to all authorised Financial Services Providers (FSPs), Key Individuals and Representatives and any changes will therefore have a direct impact on FSPs. Although the proposed amendments have not yet come into effect, they cover several areas. This article aims to … Continued
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.
Posted on 24 Apr 2018
The Financial Service Regulatory Act is in effect and the Financial Services Board has been replaced by the Financial Sector Conduct Authority (FSCA) from 1 April 2018. FSPs licensed at 1 April 2018 for: Short-term or Long-term Deposits must apply to the FSCA to add Structured deposits to their licence before 30 June 2018; Collective … Continued
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
Posted on 24 Apr 2018
Here are the steps you must follow if a client lodges a complaint with the FAIS Ombud In many cases a client will go directly to the FAIS Ombud without first lodging a complaint with you. Use this list to make sure you handle Ombud complaints fairly and follow all the required steps. Step 1 … Continued
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
Posted on 10 Apr 2018
The Registrar of Pension Funds issued Directive PF No. 8: Prohibition on the Acceptance of Gratification and is effective from 8 March 2018. The purpose of the Directive is to determine conditions to be imposed by the Registrar in order to combat and prevent bribery and corrupt conduct by board members, principal officers, deputy principal … Continued
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
Posted on 10 Apr 2018
Two new authorities were created under the Financial Sector Regulations Act, i.e. the Financial Sector Conduct Authority and the Prudential Authority. The Financial Services Board (FSB) was replaced by the Financial Sector Conduct Authority (FSCA) on 1 April 2018. This marks the formal implementation of the Twin Peaks model for the financial sector. The FSCA’s … Continued
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
Posted on 10 Apr 2018
The proposed amendments to the General Code of Conduct (GCoC) will affect the record of advice in the future. This article focuses on the proposals regarding the format, suitability analysis, when to decline to recommend a product and what to do if a client chooses not to follow your advice. The Registrar proposes that it … Continued
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
Posted on 27 Mar 2018
The Registrar has proposed amendments to the FAIS General Code of Conduct (GCoC) and the Specific Code of Conduct for Authorised Financial Services Providers and Representatives conducting Short-term Deposits Business. This article focuses on new definitions proposed for ‘replacement’ and ‘variation’ of financial products, as well as comparison. ‘Replacement’ defined ‘Replacement’ means substituting one product … Continued
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
Posted on 13 Mar 2018
FSPs with financial year end on 28 February 2018 are reminded to submit their financial statements by 30 June 2018. The FSB website states that FSPs that fail to submit their financial statements within the period prescribed (unless they have been granted an extension) are liable to pay a penalty for every day they are … Continued
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
Posted on 13 Mar 2018
The Financial Intelligence Centre Amendment Act, 2017 (FIC Amendment Act) came into effect on 2 October 2017 and has forced FSPs to move to a risk-based (rather than a rules-based) approach, which modernises the way institutions conduct customer due diligence in relation to financial transactions. The FIC amendment Act introduced new processes to determine if … Continued
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
Posted on 27 Feb 2018
In FAIS Information Circular 1/2018, published on 13 February 2018, the FSB advised: If you are already registered to write the regulatory examinations before or on 29 March 2018, you will still write the current version of the regulatory examinations. The current version of the exam will not include questions on the new Fit and … Continued
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.
Posted on 27 Feb 2018
Client advice records have recently come under fire for financial advisors failing to provide their clients with an adequate record of the advice as envisioned in the Financial Advisory and Intermediary Services (FAIS) Act. One of the key reasons for this could be because a financial needs analysis is sometimes conducted as a mere formality … Continued
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
Posted on 13 Feb 2018
Masthead believes that when introducing any regulation (whether new or revised) it should be (1) easy to implement, (2) easy to administer once implemented, (3) cost effective for users, and (4) easy to access, broad-based. We are also mindful of the need for legislation to accommodate and support small businesses which are well positioned to … Continued
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
Posted on 13 Feb 2018
The Financial Intelligence Centre (FIC) has published a document to inform the public about different types of online scams and ways to avoid becoming a victim of cybercrime. As technology evolves and improves the lives of users, it also paves the way for criminals. Criminals use online scams to obtain your information. Examples of these … Continued
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
Posted on 30 Jan 2018
Ending a client relationship can be unsettling, especially if a relationship spans many years or you believe the client is always right. You may be torn between the desire to maintain a client relationship and the difficulties it creates for your business. Whether it’s difficult or non-profitable clients or whether you need to make operational … Continued
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
Posted on 30 Jan 2018
The FSB’s third issue of its Twin Peaks Newsletter provides more information on the phasing in of the Twin Peaks regulation model. The newsletter highlights the new Financial Services Conduct Authority’s (FSCA) powers to enforce appropriate regulation. The FSCA: intends to be more proactive in executing its mandate as well as being more intrusive in … Continued
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
Posted on 11 Dec 2017
In December 2016, the National Treasury (NT) and the Financial Services Board (FSB) published for public comment the proposed amendments to Regulations and Policyholder Protection Rules (PPR). During February 2017, the NT, together with the FSB, hosted workshops with stakeholders to engage on the changes proposed in the draft Regulations and PPRs. The NT and … Continued
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
Posted on 11 Dec 2017
Draft Determination that sets out when a person or long-term insurer would not be complying with the principle of Equivalence of Reward has been released for public comment (Board Notice 181 of 2017). The principle of equivalence of reward seeks to ensure level playing fields between the remuneration of representatives and independent intermediaries. The primary … Continued
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
Posted on 11 Dec 2017
An Appeal Board ruling highlights that clients have a right to be informed of and to consent to policy changes. The ruling supported a FAIS Ombud’ determination to dismiss a complaint in the case of Sibaniso Phoshera v MUA Insurance Acceptances and KPC Brokers and Auto & General. But the Appeal Board supported aspects of … Continued
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
Posted on 28 Nov 2017
In a recent media release, the Ombudsman for Short-Term Insurance (OSTI) emphasised the importance of confirming that your clients’ vehicles are in a roadworthy condition when advising them of the appropriate insurance cover for their vehicles. Advisors must highlight to clients the requirement to maintain the roadworthiness of their vehicle. This must also be noted … Continued
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
Posted on 28 Nov 2017
The Financial Advisory and Intermediary Services (FAIS) Ombud released its Annual Report for the period 2016/2017. The Report provides insight on topics such as: a summary of complaints received by the Ombud; the settlements that were agreed to and various statistics; Financial Statements of the Ombudsman; the Accounting Authority’s Responsibility and Approval in terms of … Continued
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
Posted on 15 Nov 2017
To identify whether you are facilitating money laundering and terrorist financing (ML/TF), it is imperative that you know with whom you are dealing. Customer due diligence refers to knowing your clients and understanding their business. Properly implemented, customer due diligence measures enable you to better manage your client relationships. They also enable you to better … Continued
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
Posted on 15 Nov 2017
FSPs are expected to embed TCF in their business models and culture, ensuring that customers are at the heart of everything they do. FSPs must be able to demonstrate that they consistently treat their customers fairly and are delivering their services in a way that will ensure TCF outcomes for their customers, relevant to their … Continued
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
Posted on 15 Nov 2017
On 1 November 2017, the FSB published Notice 7 of 2017 in terms of Section 3(2)(b)(i) and 3(4) of the Long Term Insurance Act. This notice stipulates the fee structures for applications to the FSB. We specifically draw your attention to Section 8(1)(a) of the Long Term and Short-Term Insurance Act, which requires any FSP … Continued
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
Posted on 1 Nov 2017
The new foundation for FSPs to comply with the principal Financial Intelligence Centre (FIC) Act and the FIC Amendment Act on a risk sensitive basis is the Risk Management and Compliance Programme (RMCP). The RMCP has replaced Section 42 of the principal FIC Act, which required accountable institutions to implement ‘internal rules’. The RMCP not … Continued
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
Posted on 31 Oct 2017
The Financial Services Board (FSB) released its quarter one FSB Bulletin for 2017. The newsletter provides insight on interesting topics such as: The Impact of Twin Peaks; How the financial services sector is contributing to inclusive growth in SA; Consumer Education on the Psychology of Spending; and An article that sheds light on the question, … Continued
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
Posted on 31 Oct 2017
The FSB published a notice on 20 October 2017 to withdraw the document titled “Guideline on the Determination of Reappointment of Debarred Representatives”, published on 13 July 2011. The Financial Sector Regulation Act (FSRA) brings significant changes to the debarment procedure set out in the FAIS Act. Section 14 of the FAIS Act which deals … Continued
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
Posted on 18 Oct 2017
Gathering appropriate information from a client before providing advice helps you to meet the suitability requirement prescribed by the General Code of Conduct, and it will enable you to give your client appropriate and suitable advice. Section 8(1)(a) of the Code states: A provider … must, prior to providing a client with advice – take … Continued
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
Posted on 18 Oct 2017
To avoid confusion and to defend your actions should a client complain, Records of Advice should include the context in which information is given to a client and why your recommended products are relevant and suitable for the client. A complaint was recently lodged with the Ombud for Financial Services by a client who had … Continued
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
Posted on 3 Oct 2017
The FSB has published 3 Notices providing some relief to certain FSPs who perform certain types of services on behalf of insurers and certain juristic representatives. However, these exemptions will only apply if certain conditions are met by both the insurer and the FSP or juristic representative. Category I or IV FSPs that are underwriting … Continued
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
Posted on 3 Oct 2017
The ASISA Retail Standard on Effective Annual Cost (EAC) is a standardised disclosure methodology that can be used by both consumers and advisors to compare charges on most retail investment products and their impact on investment returns. The EAC is a measure of the charges that an investor will likely incur in purchasing and holding … Continued
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
Posted on 21 Sep 2017
In a previous article – FSB warns public against an unlicensed company – we shared the FSB’s warning against a company purporting to offer assistance to the public to claim pension surplus benefits in exchange for a fee. The FSB has since published a Presentation on Unclaimed Benefits. The presentation highlights issues surrounding unclaimed benefits … Continued
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
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
Posted on 21 Sep 2017
On 4 September 2017, the Council for Medical Schemes (CMS) published the Prescribed Minimum Benefit Definition Guideline regarding Early Stage Colon and Rectal Cancer. The purpose of the guideline is to improve clarity in respect of funding decisions by medical schemes. The Regulations enacted under the Medical Schemes Act governs the provisions of the prescribed … Continued
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
Posted on 5 Sep 2017
On 23 June 2017, the FSB published a Press Release [1] dealing with the provisional suspension of an FSP as a result of the Key Individual not fulfilling the required management and oversight duties. We often hear of FSPs (mainly where there is only one Key Individual) appointing an additional Key Individual who does not actively take … Continued
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
Posted on 5 Sep 2017
On 25 August 2017, the Minister of Finance issued the final retirement funds default regulations (“regulations”) for implementation. This follows an extensive consultative process with the first draft published mid-2015. The regulations cover three areas: Default Preservation and Portability This regulation requires pension and provident funds (ie. funds that have members enrolled as a condition … Continued
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
Posted on 23 Aug 2017
The final Credit Life Insurance Regulations published in February 2017, came into effect on 10 August 2017. The Regulations will only affect credit agreements entered into on or after the commencement date. Although the Regulations apply to credit providers, it is recommended that all Financial Services Providers who offer Credit Life Insurance familiarise themselves with … Continued
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
Posted on 8 Aug 2017
In their second Newsletter of 2017, the Ombudsman for Short-Term Insurance (Ombud) highlights the incidence of claims where the insured provided false, misleading or inaccurate information to the insurer, either intentionally or because of failing human recollection. The Ombud acknowledged that, “Technological advancements and the ever-increasing impact of social media and the big brother syndrome … Continued
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
Posted on 8 Aug 2017
The recent destructive fires in Knysna and the surrounding areas highlight the need for a Disaster Recovery Plan. It is also important to consider how quickly you could recover and resume business operations if a significant disruption occurred to your business. The law requires financial service providers (FSPs) to put procedures and controls in place … Continued
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
Posted on 25 Jul 2017
The Financial Services Board (FSB) has issued Notice 458 of 2017 on the Levies of Financial Institutions. Authorised financial services providers (FSPs) are required to pay a levy to the FSB to cover the cost of supervision and a levy for funding the Office of the FAIS Ombud by 31 October of the levy year. … Continued
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
Posted on 11 Jul 2017
As an advisor it is imperative that you always act within your mandate and adhere to the General Code of Conduct. Should you fail to do so, you may find yourself experiencing the unfortunate event of having an Ombud determination against you. If you feel that you have done everything that you ought to have … Continued
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
Posted on 11 Jul 2017
The FIC has issued a draft withdrawal notice of exemptions issued in terms of the FIC Act of 2001. Under the FIC Act of 2001, there are several exemptions from compliance which currently apply to certain accountable institutions. The changes brought by the FIC Amendment of 2017, will require the withdrawal of many of these … Continued
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
Posted on 28 Jun 2017
As a financial services provider (FSP), you are legally obliged to send your clients annual statements of their financial products – even when product suppliers also send reports to your clients. Section 7(4) of the General Code of Conduct for Authorised Financial Services Providers and their Representatives states that if you have advised a client … Continued
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
Posted on 28 Jun 2017
The Financial Intelligence Centre Amendment Act, 2017 (FIC Amendment Act) was signed into law by the President on 26 April 2017. At that time, the commencement dates were still to be determined. On 13 June 2017, the Minister of Finance, Malusi Gigaba, signed and gazetted the commencement dates of most of the provisions of the … Continued
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
Posted on 13 Jun 2017
The Ombudsman for Short-Term Insurance (OSTI) has issued its latest Annual Report for the year ending 31 December 2016. The mission of the OSTI is to resolve short-term insurance complaints fairly, efficiently and impartially. The Report provides statistics on the complaints which were received by the office of the OSTI. In summary, the following statistics … Continued
Posted on 1 Jun 2017
1. Service Level Commitment by the Registrar of Financial Services Providers The Registrar of Financial Services Providers has released the latest signed version of their Service Level Commitment. Click here to read this document. 2. Updated FAQs on Demarcation Regulations Version 2 of the Frequently Asked Question document on Demarcation Regulations has been issued by … Continued
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
Posted on 1 Jun 2017
The Financial Services Board (FSB) has published the schedule of the 2017 compliance reports for the different categories of FSPs. The reporting period for Category I FSPs with a compliance officer will commence on 1 June 2017. FSPs must ensure that their relevant compliance reports are submitted prior to the submission deadline date. The various … Continued
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
Posted on 17 May 2017
In this case, an appeal was made to the Financial Intelligence Centre Appeal Board regarding the imposition of financial penalties issued against the company in terms of the Financial Intelligence Centre (FIC) Act. The Appellant is an authorised dealer with limited authority (ADLA) in foreign exchange. The Respondent is the Financial Surveillance Department of the … Continued
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
Posted on 3 May 2017
The FSB has issued Survey Circulars and Schedules regarding SaXum Insurance Limited. SaXum was placed under final liquidation in October 2016 following an application by the Registrar of Short-Term Insurance. In our previous issue on 18 October 2016, we wrote about the insolvency status of the Insurer. If you are an FSP with clients who … Continued
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
Posted on 3 May 2017
The FAIS General Code of Conduct sets out that financial services providers (FSPs) must at all times have resources and processes which eliminate the risk of clients, staff and product suppliers suffering financial loss through theft, fraud or other irregular activities. FSPs must therefore implement processes, policies and formal monitoring methods that protect all parties … Continued
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
Posted on 19 Apr 2017
Financial Year End: 28 February 2017 – Submit Annual Financial Statements to FSB by 30 June 2017 All FSPs whose financial year end was 28 February 2017 must ensure that their financial statements are submitted to the FSB by 30 June 2017. Please be sure that your accounting records have been sent to your accountants … Continued
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
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
Posted on 4 Apr 2017
The Appellant, who was the FSP, had its licence withdrawn by the Registrar of the Financial Services Board (FSB). The withdrawal of authorisation is a result of the FSP not complying with many regulatory requirements as set out in the FAIS Act, as well as the FIC Act. The Registrar held that some of duties … Continued
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
Posted on 22 Mar 2017
In our Mastering Compliance issue dated 21 February 2017, we discussed the final Demarcation Regulations to take effect from 1 April 2017. The Demarcation Regulations set out that certain insurance policies that have elements of a ‘business of a medical scheme’ (excluding primary healthcare products and hospital indemnity products) shall be considered ‘health policies’ or … Continued
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
Posted on 22 Mar 2017
The Financial Intelligence Centre (FIC) has issued a warning to the public, distancing itself from a scam payment release order letter which has been in circulation. The letter is distributed by criminal scammers claiming that the recipients of these letters, stand to win or gain inheritance funds. The FIC advises that any person who has … Continued
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
Posted on 8 Mar 2017
Introduction Section 8(1)(c) of the General Code of Conduct (GCOC) for Authorised Financial Services Providers (FSP) and their Representatives[1] requires that any FSP, other than a direct marketer, prior to providing a client with advice, identify the financial product(s) that will be appropriate to the client’s risk profile and financial need(s). The determination of an … Continued
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
Posted on 8 Mar 2017
The complainant sold her insured motor vehicle on terms to a purchaser. She notified her advisor of the sale and that the vehicle will remain registered in her name until the vehicle was paid off. Further she notified the advisor of the identity and other relevant details of the purchaser including the address at which … Continued
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
Posted on 21 Feb 2017
A client had motor vehicle insurance with Miway Insurance Company. When the client had a car accident, he claimed from his insurer, but they rejected his claim based on misrepresentation, misdescription or non-disclosure. Insurer’s version The insurer’s reason for rejecting the claim was based on the client not providing accurate information at sales stage. When … Continued
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
Posted on 7 Feb 2017
Appeal Board of the FSB decision Case No. FAB4/2016 – Mark Alexander Investments CC and Mark Alexander Eiserman vs Gail Colleen Sheel Client complaint to the FAIS Ombud During February 2016, the FAIS Ombud ruled in favour of the complainant in a matter[1] relating to a failed investment in the Relative Value Arbitrage Fund (RVAF) … Continued
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
Posted on 7 Feb 2017
A second draft of the retirement funds default regulations, made in terms of the Pension Funds Act, has been published for public comment. The second draft regulations ensure that retirement savings of South Africans are invested in a prudent and cost-effective manner. National Treasury re-emphasises through these default regulations, that fund boards have the responsibility … Continued
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
Posted on 7 Feb 2017
The office of the FAIS Ombud published its Annual Report for the financial year end of 2015/2016. The report sets out the mandate of the Ombud as well as statistics of the complaints received during the financial year. During the financial year of 2015/2016, the office of the FAIS Ombud received the highest number of … Continued
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
Posted on 24 Jan 2017
The FIC has issued Notice 05 which provides feedback to all reporters on Phase 1 of the implementation of the FIC’s new registration and reporting system. Entities who registered on the goAML system must ensure that their information is correct and updated. This includes the registered name of the entity, registration number, business address, telephone … Continued
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
Posted on 24 Jan 2017
Draft Replacement of the Policyholder Protection Rules The Financial Services Board (FSB) has published the draft replacement of the Policyholder Protection Rules (PPRs) made under the Long-term and Short-term Insurance Acts. The draft replacement PPRs gives effect to a number of conduct of business reforms. These reforms should be read together with the amendments to … Continued
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
Posted on 24 Jan 2017
The Financial Intelligence Act (FICA) grants the South African Reserve Bank (SARB) with a mandate to ensure that banks have implemented adequate money laundering and terrorist financing controls. The SARB conducts inspections at the banks in order to assess whether the measures they have in place are adequate as per the requirements set by FICA. … Continued
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
Posted on 29 Nov 2016
The Financial Services Board (FSB) has published its annual report for 2016. The report aims to provide a balanced view of the FSB’s financial and non-financial performance for the year ended 31 March 2016. Click here to read the 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
Posted on 29 Nov 2016
The FSB held its annual Insurance Regulatory roadshow in November, in Cape Town and JHB, where they spoke on various topics including RDR. Here is a link to the RDR presentation if you would like to have a read through it. The FSB said they would publish an RDR status update before the end of the … Continued
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
Posted on 15 Nov 2016
The Registrar of the FSB referred a case against Discovery Life Limited (Discovery) and Regal Financial Services (Pty) Ltd (Regal) to the Enforcement Committee owing to contraventions of Section 3A of the FAIS General Code of Conduct (the Code). Discovery was involved in employment negotiations with four financial advisors prior to the prohibition of sign-on … Continued
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
Posted on 1 Nov 2016
An update to the Financial Sector Regulation (“Twin Peaks”) Bill was published a week ago. This update is the result of matters raised during hearings that were held in parliament by the Standing Committee to deliberate the Bill. The Committee requested that an update, taking into account the matters raised, be made available. Click on … Continued
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
Posted on 1 Nov 2016
Section 42 of the current Act refers to the ‘formulation and implementation of internal rules’. The Amendment Bill will look to replace this with the amended section 42 ‘Risk Management and Compliance Framework’. The substituted section 42 will require an accountable institution (AI) to develop, document, maintain and implement a programme for anti-money laundering and … Continued
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
Posted on 18 Oct 2016
On 12 October 2016, the Registrar for Short-Term Insurance instituted an urgent application at the Johannesburg High Court for the liquidation of SaXum Insurance Limited (SaXum). The application is based on the fact that SaXum is insolvent and the Registrar is satisfied that the liquidation is in the best interest of its policyholders. SaXum is … Continued
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
Posted on 18 Oct 2016
This week we take a look at the amendments that are proposed to sections on Due Diligence in Chapter 3 of the Bill. Before delving into the amendments let’s first highlight the changes to the chapter’s name which will be amended from ‘Control measures for money laundering and financing of terrorist and related activities’ to … Continued
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
Posted on 6 Oct 2016
The FIC Amendment Bill is currently with the President for approval and signature. The amendments to Schedules 1, 2 and 3 of the Financial Intelligence Centre Act, 2001 (FICA) are also being reviewed as part of the review process of the Act. The amendment of the Schedules to the FIC Act will broaden the application … Continued
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
Posted on 20 Sep 2016
Tax Ombud, Judge Bernard Makgabo, will have his term of office extended by another three years, commencing on 1 October 2016. This announcement made by Minister of Finance, Pravin Gordhan, was recently published in media statement from the National Treasury. Click here to read the media statement
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
Posted on 20 Sep 2016
The South African Reserve Bank (SARB) has launched a national campaign to raise public awareness of illegal deposit-taking and advance-fee schemes. The campaign, themed ‘Easy come. Easy go’, aims to provide South Africans with steps on protecting themselves against illegal schemes. Illegal deposit-taking includes the sending of documents, which seem to be official, and promises … Continued
Posted on 20 Sep 2016
In the last issue of Mastering Compliance, we published the developments of the FIC Amendment Bill by looking at the Issue Papers published by the FIC. This week, we provide you with a status update of the Bill, where it currently stands and an overview of the changes it will bring. In the coming weeks, … Continued
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
Posted on 6 Sep 2016
The FSB has issued an invitation to comment on the proposal of exemptions of sections of the FAIS Act and General Code of Conduct The Registrar of the FSB has published the following proposed exemptions for public comment: Exemption from Section 13(1)(c) regarding Juristic Representatives Exemption from Section 19(3) regarding the Audit Report Liquidity Requirements … Continued
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
Posted on 6 Sep 2016
The Financial Intelligence Centre (FIC) has published an Issue Paper on guidance required to implement the FIC Amendment Act of 2016. The Issue Paper has been released in consultation with National Treasury, the South African Reserve Bank and the Financial Services Board. The Issue Paper provides clarity on the Amendment Bill and is meant to … Continued
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
Posted on 23 Aug 2016
On 10 August 2016 the Financial Services Board (FSB) of South Africa issued a press release announcing it’s signing of a Memorandum of Understanding (MoU) with the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). The aim of this agreement is to facilitate a partnership that promotes and maintains the integrity of … Continued
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
Posted on 23 Aug 2016
The South African Reserve Bank (SARB) has issued administrative sanctions on five banks after it found that the banks had inadequate control measures. The SARB made this finding after conducting an inspection of the banks in terms of the Financial Intelligence Centre Act (FICA) which mandates the SARB to ensure that banks have adequate controls … Continued
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
Posted on 11 Aug 2016
The complainant is a pensioner who lost R125 000 in Realcor, a failed property syndication, based on the advice provided by her financial advisor. She contacted the FSP after hearing their marketing campaign on the radio. The investment was promoted as ‘safe’ and it guaranteed that there was minimal risk regarding loss of capital as the … Continued
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
Posted on 11 Aug 2016
The FSB has warned the public to act with caution if contacted by entities purporting to be acting on behalf of Alexander Forbes, regarding the recovery of unclaimed pension benefits and surplus funds. These entities are tracing members of pension funds who have unclaimed benefits and surplus funds payable to them and are offering to … Continued
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
Posted on 26 Jul 2016
The FSB has issued a media statement to warn the public against doing financial services related business with Olmen Finance Services, which is purporting to be an authorised FSP, but has not been granted a licence by the FSB. Click here to read the media release
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
Posted on 12 Jul 2016
In our Mastering Compliance issue of 28 June 2016, we published FAIS Notice 51 on the Bi-annual Compliance Reports for CAT II and IIA FSPs. An error was noted in the numbering on the Statistical Information Sheet in the Reports of the initial notice (FAIS Notice 51 of 2016) and has therefore been repealed and … Continued
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
Posted on 12 Jul 2016
Background The matter started when clients of a financial advisor invested into the purchase and sale of sugar in Brazil, alledgedly on the advice of their financial advisor. Despite the advisor assuring them that the investment carried no risk, the clients lost all their money. They lodged a complaint with the FAIS Ombud, but this … Continued
Posted on 28 Jun 2016
On 23 June 2016, the FIC issued a revised goAML Notice, replacing Notice 01 which was issued on 25 April 2016. The revised Notice relates to existing registrants who have received an ‘Org ID’ and need to file a report with the FIC. Currently, the Centre is validating registrants who applied for access using the … Continued
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
Posted on 28 Jun 2016
The FSB has issued a warning to the public after a South African based client fell victim to investment fraud. The client was approached directly by OffshoreEast Private Wealth Managers which operates from Asian countries. The FSB has stated that the Wealth Managers are not registered to render financial services in South Africa. Read the … Continued
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
Posted on 13 Jun 2016
Appointing a representative to your licence is not something which should be taken lightly. The FSB officially approves the licence of a financial services provider (FSP) and the Key Individuals who have been appointed to oversee the rendering of financial services in respect of that FSP. But the responsibility to “approve” a Representative rests squarely … Continued
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
Posted on 13 Jun 2016
Levies are calculated and payable annually to the FSB based on the market value of investments under management. The levy is applicable to: Category II & IIA FSPs – the investments under the discretionary management of all Cat II discretionary FSPs, as well as that of Cat IIA Hedge Fund managers. The investments under administration … Continued
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
Posted on 30 May 2016
On 17 May 2016, the Registrar of Financial Services Providers published the compliance reports for the 2016 reporting period. FAIS Notice 50 of 2016 is the compliance report for a Category I FSP with a compliance officer. This notice sets out the manner in which the compliance report for such an FSP must be submitted … Continued
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
Posted on 30 May 2016
The Financial Intelligence Centre Amendment Bill has been passed by the National Assembly in Parliament. The Bill has been sent to the National Council of Provinces for concurrence, to establish whether or not the house of parliament agrees with the Bill as it currently stands. The Bill seeks to enhance South Africa’s ability to combat … Continued
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
Posted on 16 May 2016
The FSB has communicated that the initial RDR Phase 1 implementation plan will be delayed. The reason is that it was initially anticipated that the drafts of subordinate legislation to give effect to the majority of the RDR Phase 1 proposals, would be published for comment in April 2016. However, the legislative timetable has been … Continued
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
Posted on 16 May 2016
Although replacements generally have a poor reputation in the financial services industry, one must always measure a replacement against what is best for the client. Arguably there are cases where clients are led to believe that it is in their interest to replace when this is not the case. But, one cannot overlook the fact … Continued
Posted on 3 May 2016
The FAIS Act creates a duty on FSPs to submit their financial statements to the Registrar. We discu