As ESG (Environmental, Social and Governance) becomes an increasingly important consideration, financial service providers (FSPs) have an opportunity to shift their thinking. Rather than treating ESG as another administrative burden, early adopters can embed it into governance, advice and risk management – and in doing so, build trust, reduce risk and create long-term value.
FSPs are rethinking how they approach value, risk and responsibility in a world where ESG principles have become more mainstream. Although ESG reporting isn’t a formal requirement for all FSPs yet, it’s becoming a key part of how businesses are expected to operate. Starting the journey now can ease future compliance and support long-term sustainability.
What Is ESG reporting?
At its core, ESG reporting is about transparency. It’s the process of disclosing how an organisation performs against key environmental, social and governance indicators in a structured, responsible way.
In the South African context, these indicators are shaped by local frameworks like the King V Report on Corporate Governance (2025), the JSE Sustainability Disclosure Guidance (2022) and even the Companies Act – especially for listed or public companies. These frameworks guide companies to report on areas such as:
While these reporting obligations typically apply to larger corporates, they also offer valuable guidance for smaller firms looking to future-proof their practices.
Why ESG matters for FSPs
Clients are increasingly seeking products and solutions that reflect their personal values. While younger investors and clients have helped drive this trend, interest in ESG extends well beyond that group. Across all demographics, clients are showing greater awareness of environmental and social impact. As this demand grows, FSPs are weaving ESG considerations into their advice processes – not just to meet client expectations, but also because ESG can strengthen long-term risk management and enhance portfolio resilience.
At the same time, regulators are paying closer attention. In 2023, the FSCA launched its Sustainable Finance Programme of Work, aimed at aligning the financial sector with global ESG standards and climate goals. It also released the 2024 Sustainable Finance Consumer Risk Report and Roadmap, as well as the FSCA Sustainable Finance Update Report 2025. A new guidance notice is expected in 2025 to clarify how current legislation (such as requirements for fair, accurate and non-misleading information) applies within a sustainable finance context. The regulator has also consulted on possible mandatory climate-related disclosures and labelling standards to prevent greenwashing.
Understanding the legal framework
Although there’s no single ESG law that applies to all FSPs, several existing legal and governance frameworks are relevant and can help guide FSPs who want to implement or improve ESG practices:
– Section 2: Acting in the client’s best interest includes considering ESG-related factors where they could materially affect product performance.
– Section 3: Managing conflicts of interest, particularly if a recommended product claims ESG alignment but doesn’t live up to it.
– Section 7: Disclosure and transparency require accurate, non-misleading product representations. This includes avoiding greenwashing and ensuring ESG claims are factually substantiated.
– Section 8: When it comes to suitability of advice, if a client indicates ESG preferences, these must be factored into the advice process.
– Outcome 1: Customers can be confident they are dealing with firms where TCF is central to the culture. Embedding ESG into a firm’s values and governance demonstrates a commitment to fairness, responsibility and ethical conduct.
– Outcome 2: Products and services are designed to meet the needs of identified customer groups. ESG factors help guide product design and advice to align with client values and long-term sustainability goals.
– Outcome 3: Customers are provided with clear information and are kept appropriately informed before, during and after the point of sale. Accurate ESG disclosures help prevent greenwashing and ensure that clients understand the characteristics, benefits and limitations of ESG-linked products.
How to get started: A practical guide for FSPs
Whether you’re a large financial institution or a small advice practice, integrating ESG doesn’t have to be overwhelming. The key is to take a structured, phased approach:
– Update responsible investment and environmental impact policies
– Assign ESG accountability – either through a dedicated ESG committee or the board
– Ensure ESG becomes part of business strategy and risk management
Pitfalls to avoid
As you implement ESG, keep these common risks in mind:
Why ESG is worth it
Like any new regulatory focus, ESG can feel like extra work at first. But by getting ahead of the curve, you can build resilience, protect your clients and unlock real value.
Early adopters will be better positioned to comply with future reporting obligations, provide advice that aligns with client values and engage confidently with regulators.
Most importantly, ESG isn’t just about compliance – it’s about building a practice that is responsible, forward-thinking and equipped for long-term success.
For more information on how new industry developments, like ESG, is shaping the financial services industry, speak to your Compliance Officer or get in touch with us.
The Financial Sector Transformation Council (FSTC) has issued Reporting Notice 01 of 2025, formally calling on financial institutions to submit their annual verified B-BBEE compliance reports for issue dates between 1 January 2025 and 31 December 2025.
This requirement, in accordance with Section 10(4) of the B-BBEE Act 53 of 2003 and Statement FS000, Paragraph 8.5 of the Financial Sector Code (FS Code), ensures that institutions operating within South Africa’s financial sector remain transparent and accountable in their transformation efforts.
All financial institutions are expected to submit verified documentation reflecting their progress in implementing the FS Code. Entities are classified as follows:
To ensure validity, all affidavits must be fully completed, clearly indicating the financial year-end, contain matching deponent and commissioner dates, and be issued within the 2025 reporting period.
All required documentation must be submitted by close of business on the 27 February 2026. Submissions should be emailed to reporting@fstc.org.za with the subject line: “FSTC 2025 Reporting – [Name of Entity]”.
The Ombud Council’s Annual Report for 2024/25 provides a comprehensive overview of the Council’s achievements, strategic priorities, and operational highlights. This article summarises the key points, offering practical insights for financial institutions.
Strategic priorities and achievements
The Ombud Council’s mandate is to ensure an accessible, effective, independent, and fair financial sector ombud system. The Council’s strategic priorities for 2024/25 included building a well-governed institution, supporting financial inclusion, enhancing ombud system coverage, and contributing to regulatory reforms.
1. Operational Independence: The Ombud Council achieved operational independence from the Financial Sector Conduct Authority (FSCA) in 2024/25, finalising its own financial, supply chain, and human resources policies. This transition was marked by the successful implementation of internal audit functions and the achievement of a clean audit opinion for the financial year.
2. Consumer Awareness Initiatives: The Council made significant strides in promoting consumer awareness of the ombud system. This included a multi-phase, multi-media advertising campaign, participation in Money Smart Week South Africa, and collaboration with the FSCA and other stakeholders. These efforts aimed to enhance financial literacy and support financial inclusion.
3. Ombud System Reform: The Council actively contributed to the structural and policy reforms of the financial sector ombud system. A highlight was the first anniversary of the National Financial Ombud (NFO), which replaced four industry ombud schemes. The Council also worked closely with the National Treasury, FSCA, and World Bank to develop new legislative proposals to strengthen the ombud system.
Key takeaways for financial institutions
Good to Know
The Ombud Council conducted four on-site inspections of ombud schemes during the year, ensuring compliance and performance monitoring. Financial institutions should be prepared for such inspections and maintain robust internal controls to meet regulatory standards. The Council finalised a comprehensive complaint data reporting framework, setting consistent and comparable reporting requirements across ombud schemes. Financial institutions must ensure accurate and timely reporting of complaint data to comply with these requirements.
The Ombud Council’s new five-year Strategic Plan for 2025-2030 focuses on consumer education and awareness while continuing to fulfil its mandate.
The Ombud Council’s Annual Report 2024/25 highlights significant achievements and strategic priorities that directly impact financial institutions. By staying informed and aligning with the Council’s initiatives, financial institutions can enhance consumer trust, ensure regulatory compliance, and contribute to a more robust financial sector.
The Financial Intelligence Centre (FIC) reaffirmed its pivotal role in safeguarding South Africa’s economy through robust supervision and a strong compliance culture, as detailed in its 2024/25 Annual Report. The FIC’s efforts have been instrumental in supporting law enforcement and other partners to combat financial crime and move South Africa off the Financial Action Task Force (FATF) grey list.
A cornerstone of the FIC’s mandate is the supervision of institutions under the FIC Act. In the past year, the FIC adopted a risk-based supervision approach, focusing on institutions at higher risk of money laundering and terrorist financing. Out of 556 inspections conducted, most targeted medium and high-risk entities. Accountable institutions with the highest number of inspections by the FIC were Legal Practitioners (242), followed by Estate Agents (165), while the Financial Sector Conduct Authority (FSCA) issued 95 inspection reports on Financial Service Providers (FSPs). Following these inspections, 330 institutions were required to implement remedial actions for non-compliance, with further enforcement or monitoring for those failing to comply. The FIC imposed 25 administrative sanctions, amounting to R2.2 million, underscoring its commitment to enforcement.
Over 55 000 institutions registered with the FIC submitted more than 13.4 million regulatory reports, including over 570 000 suspicious transaction reports. These reports form the backbone of the FIC’s financial intelligence, which in 2024/25 contributed to the recovery of nearly R144 million in criminal proceeds.
Other general highlights from the past year include the FIC’s leadership in national initiatives such as the Reformed Fusion Centre and Asset Recovery Hub, which expedited asset recovery and facilitated multi-disciplinary investigations. The FIC also continued to provide guidance and awareness activities to enhance compliance and understanding of anti-money laundering and counter-terrorism measures.
Through targeted supervision, rigorous compliance monitoring, and impactful intelligence, the FIC continues to play a vital role in protecting the integrity of South Africa’s financial system.
Masthead can assist you with FICA compliance, preparation for FIC inspections and FICA training
We offer a wide range of services to all institutions that require FICA compliance, including assistance with registration, FICA training for your employees, hands-on assistance with the implementation of FICA requirements in your business and support services when preparing for a FIC inspection.
Speak to your Masthead Compliance Officer or get in touch with us for more information on how Masthead can assist you to be compliant in terms of the FICA requirements.
National Treasury issued a media statement regarding South Africa’s formal removal from the Financial Action Task Force (FATF) greylist on 24 October 2025; this marks a pivotal development for the country’s financial system and its global reputation. The FATF’s decision, announced after its plenary in Paris, that it recognises the extensive reforms undertaken by the South African government and regulators to strengthen anti-money laundering (AML) and counter-financing of terrorism (CFT) frameworks.
This development brings relief for Accountable Institutions (AIs) as they have faced heightened scrutiny from international partners, increased compliance costs, and delays in cross-border transactions since South Africa’s greylisting in February 2023. Exiting the list indicates restored confidence in South Africa’s regulatory integrity whilst paving the way forward for smoother global financial interactions.
However, the National Treasury cautioned, this milestone does not mark the end of its reform efforts as it is “only the start of a broader process” by the FIC to ensure lasting institutional resilience.
The FATF requires ongoing demonstration of compliance through measurable outcomes such as successful investigations, prosecutions, and sanctions related to AML/CFT breaches. This AIs must maintain vigilance and embed sustainable compliance cultures across their operations.
Enhanced due diligence, continuous staff training, and effective transaction monitoring remain crucial. Regulators like the Financial Sector Conduct Authority (FSCA) and the Financial Intelligence Centre (FIC) are expected to continue with intensified supervision, ensuring that improvements achieved during the greylisting period are not reversed.
The upcoming FATF Mutual Evaluation (2026–2027) will test the durability of reforms. AIs that strengthen governance and invest in AML capabilities, tools or technologies will not only support national compliance but also enhance South Africa’s competitiveness in a now, more trusted, financial environment.
Do you need assistance with your FICA compliance?
Masthead has been helping businesses implement and comply with FICA requirements since 2004. We provide tailored FICA compliance solutions to help accountable institutions meet regulatory requirements efficiently and effectively. Our services include:
- FICA Implementation
- FICA Compliance Monitoring
- FICA RMCP Implementation
- FICA Risk and Compliance Return
- FIC Inspection Preparation and Support
- FICA Training
Get in touch with us for more information and assistance, or contact your nearest Masthead Regional Office.
FSCA budget and levies 2026/27 – What FSPs need to know
The Financial Sector Conduct Authority (FSCA) has published its proposed budget, estimates of expenditure, and levies and fees for the 2026/27 financial year, inviting public comment as required by the Financial Sector Regulation Act, 2017 (FSR Act). These proposals are of particular importance to Financial Services Providers (FSPs) and other financial institutions, who are directly affected by the levies that fund the FSCA’s operations.
The FSCA’s mandate and funding model
The FSCA’s mandate is to enhance the efficiency and integrity of South Africa’s financial markets, promote fair customer treatment, provide financial education, and support financial stability. To fulfil this mandate, the FSCA is primarily funded by levies imposed on supervised entities, including FSPs, as well as certain fees for specific services. The Levies Act and the FSR Act together regulate how these levies are calculated and imposed.
For the 2026/27 financial year, the FSCA is budgeting for gross revenue of R1.231 billion, with levies accounting for 94% of this amount. The remaining revenue comes from fees (3%) and other sources. The FSCA’s operational expenditure is budgeted at R1.230 billion, resulting in a modest surplus. Staff expenses, as is typical for a regulatory body, are the main cost driver, representing 65% of total expenditure.
Proposed changes to levies for FSPs
The FSCA proposes to increase the levy variables by 4% for 2026/27, which is slightly below the average Consumer Price Index (CPI) increase of 4.4% for 2024. This decision reflects an attempt to balance the FSCA’s funding needs with the economic realities facing regulated entities. Notably, the FSCA is not proposing any increase in the fees charged for specific services in the upcoming year.
The levies payable by FSPs are detailed in Schedule 2 of the Levies Act and are structured according to the type and size of the FSP. The calculation typically involves a base amount plus a variable amount, which is often linked to the number of key individuals and representatives, or the value of assets under management, depending on the FSP’s category.
For example, for Category I or IV FSPs, the proposed base levy for 2026/27 is R4,167.07 (up from R4,006.80), with a variable levy of R601.91 per key individual or representative (up from R578.76). The maximum levy for these FSPs is set at R2,893,800. Category II, IIA, and III FSPs face a higher base levy of R8,681.40, with variable components based on both personnel and assets under management. For FSPs focused solely on long-term insurance subcategory A or Friendly Society Benefits, the base levy is R4,167.07, but the variable component remains unchanged at R250 per individual.
FSPs, micro-insurers, collective investment schemes, and other supervised entities each have their own levy formulas, with most categories seeing a uniform 4% increase in both base and variable components. Regardless, the cumulative effect of levy increases, compliance costs, and technology investments is placing significant pressure on small and start-up FSPs.
Masthead, has submitted detailed commentary on the proposals, acknowledging the levy increase to 4% rather than the full CPI-based adjustment. However, noting ongoing challenges faced by smaller, independent FSPs, who are particularly vulnerable to rising operational costs, regulatory complexity, and constrained economic conditions.
The FSCA’s 2026/27 budget and levies proposals reflect a careful balancing act between funding effective regulation and supporting the resilience of the financial services sector. While the proposed 4% increase is below inflation, the industry may require an even greater sensitivity to the challenges faced by the smaller FSPs and other industry participants.
To access the annexures, click here.
JOLEEN JOHN
Managing Director
Joleen is a seasoned professional with over 22 years of working experience across a range of industries. She started her career in Corporate Finance within the IT and engineering sector and moved into the financial services sector in 2005. As the Head of Marketing Finance at Discovery Holdings she was responsible for the finance function of the distribution channels and marketing.
Joleen’s move to Old Mutual in 2011 gained her experience in strategy as part of the Personal Finance: Broker Distribution and Franchise executives. This included the management of the Old Mutual Black Distributors Fund. Key to managing this function was a comprehensive understanding of the regulatory impacts on financial advisors and the operational aspects that affect FSPs and tied advisors.
Beyond general management, Joleen specialises in strategy development, business advisory, distribution management and economics and is well-versed in organisational development areas like diversity, team formation and performance management. Joleen has a BCom Accounting undergraduate degree from Witwatersrand University and an MBA from the UCT Graduate School of Business.
LAURENCE MULLER
Finance Director & Chief Operating Officer
Laurence joined Masthead as Head of Finance in 2007. Two years later he was appointed to his current position as Financial Director and has since served as a director on the Masthead board. During 2021 he was also appointed as COO.
Laurence has a BAcc and BCompt Honours degree and is a Chartered Accountant (CA(SA)). He holds a Post Graduate Diploma in Financial Planning through the University of Stellenbosch Business School and is a Certified Financial Planner (CFP) and member of the Financial Planning Institute (FPI). He has also successfully completed the FSCA’s RE 1 and 5 Examinations.
ANRI DIPPENAAR
Head of Compliance
Anri has a wealth of experience having been involved in the financial services industry since 2012. From 2014 to 2017, she worked at Masthead as a Compliance Officer.
Anri then moved into the corporate space where she held various compliance roles such as Group Compliance Monitoring Manager, Group Compliance Specialist and most recently as a Senior Group Compliance Manager before returning to Masthead as the Head of Compliance.
Anri has an LLB degree and completed her Master’s degree in Insurance Law. She also completed the Senior Management Development (Advanced Peak Performance Programme (APPP) through GIBS.
SHERLENE NEETHLING
Head of Operations
Sherlene has more than 25 years’ experience in Financial Services having worked in the Employee Benefits, Linked Product and Life Assurance environments prior to joining Masthead in 2006.
Sherlene has a wealth of experience having worked in many areas including, product marketing, traditional marketing, and operations. As Head of Operations at Masthead, she leads the IT, marketing, operations and learning centre teams.
Sherlene has a marketing qualification and a Certificate in Journalism.
ANDRIA HIBBERT
Head of Corporate Accounts and Regional Manager
Andria has been in the financial industry for more than 33 years having worked in banks and insurance companies. She joined Old Mutual Broker Distribution in 1995 as an Admin Manager in Durban and later joined Masthead when they opened their doors in October 2004 as the Regional Services Manager for KwaZulu-Natal. Five years later she was appointed as the Regional Manager in KwaZulu-Natal and in 2014 she was transferred to Johannesburg as the Regional Manager.
In 2020, she took on the additional role of National Key Account Manager and was responsible for managing all Corporate Accounts. In 2022, Andria was promoted to Head of Corporate Accounts and transferred to the Western Cape as Regional Manager.
Andria has a BCom in Industrial Psychology degree. She is also a registered Compliance Officer with the FSCA for CAT I, II, IIA, and IV and has successfully completed the FSCA’s RE 1 and RE 3 Examinations.
MAQBOOL SONDAY
Head of Finance
Maqbool joined Masthead as a Financial Accountant in 2008. Seven years later he was appointed as Finance Manager and then appointed to his current position as Head of Finance in 2022.
Maqbool has a BCom Accounting degree from the University of the Western Cape. From 2003 and 2005, he completed his articles at SizweNtsalubaVSP and in 2006 he went on to complete his BCom Honours degree from the University of KwaZulu-Natal.
HEIDI DE LANGE
Regional Manager and Compliance Officer
Heidi has more than 33 years’ experience in the financial services industry. In 2004, she moved from Old Mutual to Masthead as a Regional Service Manager. Nine years later she was appointed as Regional Manager of the Gauteng North, Limpopo and Mpumalanga region and went on to become a Compliance Officer to complement the management offering.
Heidi has a BCom Entrepreneurs degree from Unisa and she is approved as a CAT I and CAT II Compliance Officer. She has also successfully passed all the FSCA’s Regulatory Examinations.