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.
The current CPD cycle started on 1 June 2019 and will end on 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 the FSP, its KIs and Reps and addresses any identified needs or gaps, and that the required CPD hours are timeously obtained.
FSPs are reminded to ensure that the Rep Register is correct and up to date. 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 information is correct and to notify the FSCA or make changes on the FAIS ePortal before 31 August 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, based on a sustainable, long-term, risk aligned and liability-driven investment philosophy. Prudent investing should consider factors which affect the sustainable long-term performance of a fund’s assets, including environmental, social and governance risk factors.
The Financial Sector Conduct Authority (FSCA) recently published FSCA Communication 1 of 2019 (PFA) together with a Guidance Notice on Sustainability of Investments and Assets in the context of a retirement fund’s investment policy statement. The Guidance Notice provides guidance on some of the essential aspects of sustainable investments that the FSCA expects a fund to include in its investment policy statement. The Guidance Notice also sets out the FSCA’s expectations regarding certain disclosure and reporting requirements relating to sustainability.
FSPs that have been appointed by a fund to manage assets, in terms of a discretionary mandate, and FSPs that provide advice to clients relating to retirement, would be well advised to ensure that they understand the requirements and principles set out in Reg 28, and this Communication and Guidance Notice.
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 implementation of the FSCA’s supervisory program of financial products and service providers operating in South Africa, ensuring that they comply with the laws and standards addressing fair treatment of customers.
Read more about the appointment in the FSCA Press Release: FSCA appoint the new Divisional executive for Conduct of Business Supervision.
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 which sets out the format for the Notice of Appeal. The Notice of Appeal must set out the personal details of the Appellant, the particulars of the decision, the grounds of appeal and proof of payment for an amount of R10 000.
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. This auditor report must be submitted to the FSCA in the form and manner which the FSCA prescribes.
The FSCA recently published FSCA Notice 46 of 2019: Determination of form and manner of section 19(3) Auditor Report which sets out the form and manner of this auditor report. The determination took effect on 1 July 2019 and has also repealed Board Notice 85 of 2008.
The Auditor Report must contain the following information:
– Schedule A which sets out money and/or assets held on behalf of clients by the FSP at year-end.
– Schedule B which sets out work performed and findings in respect of the FSP’s key controls and procedures to meet the objectives of section 19(3) of the FAIS Act and section 10 of the General Code of Conduct for Authorised Financial Services Providers and Representatives.
FSPs that hold client money or assets should provide a copy of this Notice to their auditors to ensure that they are aware of the reporting format.
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 considering the needs of the business in 2020. The Business Plan should be reviewed and updated according to changes in the business. In this article we look at what to include in your Business Plan and important points to remember.
Creating a business plan is like thinking about and planning for a holiday. Planning and organising are necessary to make a holiday a success. You need to consider where you want to go, how you are going to get there, how much money you need, how long you will be away and what you need to do to make it happen. If you did not plan your holiday, would you actually go away, or would it remain a concept?
As Benjamin Franklin once said, “If you fail to plan, you are planning to fail!” Just as planning for a holiday is necessary, you need a business plan that will work for you and help you achieve your dreams.
Your business plan should include information such as:
– Strengths. List the strengths in your business, namely your competitive advantages, and how you can use them.
– Weaknesses. What are your weaknesses and how do you improve them?
– Opportunities. Looking outside your business, what are the opportunities for your business and how can you take advantage of them?
– Threats. These are things over which you do not have control, but you need to be aware of and understand how to respond.
When developing your business plan, keep it simple. A few written ideas are better than none.
Involve the right people in its development. These would be people involved in your business, people that can assist with information and best influence the process. Internally it could be, managers, staff members and representatives. It is also good to get an external view from your accountant, product suppliers, consultants and compliance officers.
There should be accountability for your business plan, so identify who is responsible for what and by when. You’ll also need to review and adjust it regularly, as a business plan is not something that is created and then tossed aside. Rather, it is a living, breathing document that should change in response to you and your business.
Masthead offers business planning seminars, which are CPD accredited, to assist you to draw up a business plan to suit the needs of your business. Masthead can also assist you with personal implementation of a business plan. Read more about this seminar or contact your regional office for more information.