A recent media release by the FSB highlights the importance of ensuring that the requirements of an accountable institution as envisaged by the Financial Intelligence Centre Act (FICA) are adhered to.
The Registrar of Securities Services referred a case against an accountable institution to the Enforcement Committee of the Financial Services Board relating to a contravention of Section 21(1)(a) and 21(2)(a) of FICA. These Sections require that an accountable institution establish and verify the identity of clients (or where a client is acting on behalf of another person, the identity of that other person).
The accountable institution admitted the contravention and agreed to settle the matter. The accountable institution concerned made an effort to correct the areas of non-compliance and co-operated willingly with the Registrar.
The Enforcement Committee has not made a determination and the Registrar agreed to a penalty of R500 000.
FSPs who are accountable institutions would be well-advised to review their own internal processes to make sure that they cannot be found guilty of a similar contravention of the requirements of FICA. All staff should also be trained on at least an annual basis to ensure that they remain up to date with what is expected. Doing what is required upfront is always easier than trying to fix a mistake at a later stage. Implementing appropriate procedures and checks within your business will help to reduce the risks of non-compliance.
Click the link below to download the full media release.
FSB Media Release – Thebe Stockbroking gets R500 000 fine – FIC Contravention
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