The Financial Sector Conduct Authority (FSCA) is requesting and gathering information relating to the ownership of certain FSPs and CIS managers that are also designated as accountable institutions in terms of FICA. Impacted financial institutions must submit the requested information to the FSCA by 30 September 2022.
Background
The Request for Information (RFI) 6 of 2022 is aligned with the Financial Action Task Force (FATF) Recommendation 26, which states that “Countries should ensure that financial institutions are subject to adequate regulation and supervision and are effectively implementing the FATF Recommendations. Competent authorities or financial supervisors should take the necessary legal or regulatory measures to prevent criminals or their associates from holding, or being the beneficial owner of, a significant or controlling interest, or holding a management function in, a financial institution.”
The FATF sets international standards that aim to prevent illegal activities, relating to money laundering and terrorist financing, and reduce the risk of harm they cause to society. As a member of the FATF, South Africa must adhere to the FATF Recommendations. Failure to adhere to these Recommendations could have severe negative impacts for the South African economy, including in respect of foreign investments.
To meet these requirements, it is necessary for the FSCA to scrutinise the ownership information of its supervised entities more closely to help mitigate the risk of financial institutions being used to facilitate criminal activity. Accordingly, the FSCA is gathering information as described in the RFI to help identify owners of certain financial institutions more effectively.
Who does the RFI apply to?
The RFI 6 of 2022 applies to:
- Managers as defined in the Collective Investment Schemes Control Act (CISCA)
- Authorised FSPs as defined in the FAIS Act
However, the following FSPs are excluded:
- Sole proprietors and partnerships, as these businesses are not separate legal entities. They are owned and operated by the individuals directly licensed by the FSCA.
- FSPs that are authorised for non-life insurance and/or health service benefit products only, as these entities are not designated as accountable institutions in terms of FICA.
- Banks, mutual banks, and insurers licensed by the Prudential Authority (PA). These entities will be required to provide ownership information directly to the PA.
Submission and Requirements:
Submissions must be done online via the FSCA’s FAIS or CIS/Hedge Fund e-portal (as applicable) using the FSCA E-Services link
Once logged in, users must select the “Beneficial Ownership” option, click “submit” and proceed to complete all required fields.
Impacted financial institutions are required to submit two levels of ownership information, one relating to direct ownership and the other to indirect ownership.
There is also a requirement to upload an organogram depicting the total ownership and control structure of the institution to enable verification of the ownership information by the FSCA.
The FSCA has issued a step-by-step user guide on how to submit the required information. Any incomplete submissions will be rejected by the FSCA and be regarded as a failure to comply with the RFI.
All enquiries relating to the RFI must be sent to the FSCA Business Centre at RFI@fsca.co.za
For assistance with FSCA e-portal login credentials FSPs may contact Akashen Rampersadh at Akashen.Rampersadh@fsca.co.za and CIS Managers may contact Annelize Slabbert at Annelize.Slabbert@fsca.co.za