As you read this, South Africa teeters on the brink of a COVID-19 third wave. As a nation we’ve been fortunate to hold it off for this long, but without a concerted vaccine drive and take-up by the population, it seems inevitable.
Don’t let COVID-19 fatigue get you, and please maintain your precautions. As winter looms, stay warm and stay safe.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (THE FSCA)
Submission of Financial Statements
An important reminder that financial service providers (FSPs) with February year-ends must submit financial statements to the FSCA by 30 June. The extension granted last year no longer applies, so please make sure that your accountants and auditors are properly up-to-date and that they will be able to meet the deadline.
If your FSP desperately needs an extension we will assist, but applications have to be submitted to the FSCA by no later than 15 June.
Continuous Professional Development (CPD)
Remember that the deadline to complete CPD hours is 31 May. You may have a few hours left to finish in time if you missed anything over the last cycle.
Log on to your CPD portal (we recommend AC Develop) and get it done.
Conduct of Business Returns
The FSCA released revised reporting requirements on 29 April for insurers required to submit Conduct of Business Returns (CBRs).
The changes align the terminology of the reports to that of the Policyholder Protection Rules, as well as add definitions and questions regarding arrangements with distribution channels, add-on benefits, and claims management.
Affected insurers will need to amend their reporting arrangements to draw the information.
It’s worth noting that the Extensible Markup Language (XML) submission process has been postponed to allow for the reports to harmonise the reporting requirements with those of the cross-sectoral CBR which would include FSPs. The consultation on these reports is only likely to happen in 2022, which means that the financial services industry can expect occasional focused reports but not an Annual Report for some time yet.
Download the FSCA’s communications and the new template here.
Proposed Fees and Levies
The FSCA notified industry of its draft fees and levies for 2021. In general, the proposed levies have been increased by just under 4% which is in line with inflation.
Click here for the draft notice and the comments submission form if you’d like to have your say.
We’ll provide an update once the final amounts are released.
Demarcation Regulations – Escalation of Policy Benefits
As per the requirements of the Demarcation Regulations under Section 72 of the Long-term Insurance Act, 52 of 1998 and Section 70 of the Short-term Insurance Act, 53 of 1998, the Minister of Finance published the Annual Policy Benefits Escalation.
The notice was published on 21 April, and the CPI (consumer price index) published on that date was 3.2% but the amended tables have 3.3% escalations. Nonetheless, the published tables are now set and are effective from 1 April 2021.
Download the updated tables here and ensure that the benefits of any accident and health policies you write or market are correct.
RE 1 and RE 5 Preparation Material
The FSCA once again released an amended preparation guide to the Regulatory Exams for prospective Key Individuals and Representatives.
If you are registered or plan on registering for the Regulatory Exams, make sure you use the correct material in your preparation.
The new guide is available here.
FSRA Draft Administrative Action Procedures
The FSCA released draft procedures for administrative action under the Financial Sector Regulation Act, 2017 (FSRA) and invited comment from industry. The deadline for comments is 21 June 2021.
The draft procedure follows a balanced three-step process:
- The Authority (i.e. FSCA in most cases) must provide a Notice of Intent in writing to the affected party (which includes juristic entities) which clearly describes the proposed administrative action, the reasons therefore, its terms and conditions, any consequences, the grounds for the action (i.e. the applicable legislation), evidence, and pertinent factors.
- The affected person then has the opportunity to make representations including presenting and disputing information. They may be assisted by a legal representative in their responses as well as should they appear before the Authority. Reasonable time to make representations will be determined on a case-by-case basis.
- A final decision will be issued once all the information and representations have been reviewed. The decision must clearly state the reasons and provide for notice of internal remedy as well as provide for the affected person to request reasons should they not have been provided.
The draft makes provision for people who cannot be contacted, entities that are not licensed or required to be licensed, as well as specific conditions relating to debarment that align with the FSRA and FAIS Fit and Proper debarment requirements.
The right to apply to the Financial Services Tribunal for reconsideration is also expressly included as is a provision for departure from the procedures based on urgent or extenuating circumstances.
Read the draft procedures here and comment if you feel the need.
FSCA Imposes Administrative Penalty on Absa Bank Limited
On 19 May, a FSCA press release confirmed that Absa had been penalised R100,000 for failing to meet a licence condition in respect of its Over the Counter (OTC) derivatives products.
The licensing condition required that Absa submit a report by its independent auditors regarding the systems, processes, procedures, and reporting capacity on all its OTC derivatives transactions within six months of its approval for the category and annually thereafter. The deadline of 1 March 2021 was not achieved and no extension application was submitted.
We can only reiterate that the FSCA is serious about conditions and deadlines – make sure you meet them to avoid costly penalties!
FINANCIAL INTELLIGENCE CENTRE (FIC)
The extended deadline for submissions in terms of the Directive to Provide Information is 31 May 2021. It is highly unlikely that any further extension will be granted. If you haven’t submitted the return yet, you may still have a few hours (provided you’re reading this on the day of release!).
Submissions are to be made via the e-portal on the FSCA website.
OMBUD’S COUNCIL
Minister of Finance Appoints Ombud Council Board Members
The Minister of Finance, Mr Tito Mboweni, appointed the Board of the Ombud Council and an interim Chief Ombud as implementation of the requirements of the Financial Sector Regulations Act 9 of 2017.
The board members are:
- Deanne Wood – Chairperson
- Adv Dikeledi Chabedi – Vice Chairperson
- Emmanuel Lekgau
- Silindile Kubheka
- Adam Horowitz
- Charmaine Soobramoney
- Katherine Gibson (Acting FSCA Commissioner to be replaced by Unathi Kamlana once duties are taken up)
Eileen Meyer has been appointed as the interim Chief Ombud.
The Ombud Council has jurisdiction over the statutory and industry Ombuds, i.e. the Pension Fund Adjudicator, the FAIS Ombud, the Credit Ombud, the Ombudsman for Long-term Insurance, Ombudsman for Short-term Insurance, the Ombudsman for Banking Services, and the Johannesburg Stock Exchange Ombud.
The Ombud Council’s aim is to harmonise the dispute resolution mechanisms across the financial services sector.
We wish the new appointees well in their new roles.
The official press release is here.
The CVs of the board members are available here.
INFORMATION REGULATOR – POPIA (PROTECTION OF PERSONAL INFORMATION ACT)
On 1 June 2021, there will only be 30 days until 1 July 2021 where public and private bodies need to be POPIA compliant!
If you need assistance in conducting your analysis and developing the necessary policies, contact us and we’ll tailor a solution to fit you.
Guidelines on the Registration of Information Officers (IOs)
Last month we summarised the guidelines on the registration of IOs. We feel it’s important to mention that our recommendation for the registration is to ensure that your company is fully in control. To achieve this, we would recommend the registration of the IOs and Deputy Information Officers (DIOs) be made through the Information Regulator’s online portal – that way nothing will get lost in the mail, and typos can only have been made by the party completing the application!
To read the entire guidance note again, click here.
Omega Compliance Solutions (OCS) successfully registered its IO and DIO in what turns out to be a very straightforward process.
To access the registration portal, click here.
Below is a summary of what is required so that you can prepare prior to the registration.
Organisation information
- You will need to enter the “type of body” from the drop-down list, which in most instances will be “Private”.
- Type in your company registration number.
- Type in the full name of your company.
- From the “select main business activity” dialog box, look for the description that best describes your business. We chose “other” and typed in “professional services” as the main description. For Underwriting Managers, it would probably be best to use the “insurance” activity. Should you wish to use the name “Financial Services Provider, Insurance Broker, Financial Adviser”, or similar, you need to select the “other” option and type in the description.
- Select the “Juristic Person”.
- Complete the company’s postal and/or physical address section.
Click on the “next step” button.
Information Officer
- Complete the applicant details with the details and position of the Information Officer.
- Complete the Information Officer’s physical (home) address and postal details.
- Complete the contact details section.
Click the “next step” button.
Deputy Information Officer
- Should you wish to add a Deputy Information Officer select “yes”.
- Enter the Deputy Information Officer’s details. This will be limited to their name surname and identity or passport number.
Click the “next step” button.
Declaration
- Complete the declaration page.
Click the “submit” button.
An email will be forwarded to the Information Officer’s email address confirming the entity’s registration with the Information Regulator.
Please save a copy for your records in your POPIA compliance folder and forward a copy to us for our records.
Let us know if you need any assistance in completing and submitting the application.
Promotion of Access to Information Act (PAIA)
The exemption for small companies from compliance with the requirement to draw up and publish PAIA manuals comes to an end on 30 June 2021.
The draft regulations were recently published for comment. We are busy analysing the regulations to assess what has changed and what the new requirements involve. Of note is the fees that can be charged for the fulfilment of an information request. We will provide further guidance once the regulations have been gazetted.
It’s important to note that there may be an extension to the exemption. The Information Regulator advised us, that it has applied to the Minister of Justice for an extension of the exemption and that it is awaiting feedback from the Minister.
Should the exemption extension be declined, all private bodies will be required to draft and publish their PAIA Manual by 1 July 2021.
We’ll keep you posted.
SOUTH AFRICA RESERVE BANK (SARB)
Debit Order Mechanism Changes
On 28 April, the SARB released a letter confirming the implementation of the final changes to the South African electronic debit order system in the Authenticated Collections/DebiCheck project. The changes have been implemented in stages since 1 August 2018, and the deadline to implement the revised model was 1 November 2019.
The final step now ensures that early debit orders will only be collected through the DebiCheck system, while normal debit orders will still be processed later in the day as per current arrangements.
The DebiCheck system works on the basis that consumers provide a verified authorisation to their bank to release the funds from their account.
The obligations to ensure the safety and efficiency of the collections industry has been taken seriously by all members and it seems the change has been quite smooth.
Read the press release here.
A-Proofed: What you need to consider in your POPIA policies
Top of mind right now is the deadline to get your POPIA policies done and dusted by 1 July 2021. This article isn’t about how to use Microsoft Word’s various features, as I have written about that all before. I’m specifically looking at the design aspect of documents, which makes them easy to read and understand.
There’s only a month left, and if you’re going to need help with this, please remember that I am able to make sure that you’ve included everything in your policies, and that they fit your company style.
Keep it simple (less is more)
The driving force behind your design decisions should be simplicity, and if you remember only one thing from this article, let it be this: When creating a document, the content should be the main focus. The formatting exists to make that content easier to read and digest. Eliminate the temptation to introduce eye-catching elements that only serve to distract.
Document layout
Your paper size should be set to the appropriate size for your country. In South Africa, it’s A4 (210mm x 297mm). As for margins, it’s best to go for a 1-inch (2.54cm) margin on all sides.
Language
This might seem obvious, but it’s important to ensure that your MS Word is set to the language that’s appropriate for your country. There’s no point in referring to your organization (using the American spelling), when in South Africa it’s your organisation.
Company logo
If it’s a company document, it needs the company logo. Make sure that you have the correct version, and whatever you do, don’t stretch it to fit into a particular space.
Appropriate font
Your first big design decision should be which font you’re going to use. If your company has a standard font for documents, use that. If not, stick with a font which is easy to read such as Arial or Calibri. Whatever you end up using, use the same font throughout. Whatever you do, don’t use Comic Sans!
Standard font size
The best font size to use is between 10 and 12 points. If you go below 10, you may need to provide a magnifying glass, and anything above 12 looks unprofessional. Headings are usually one or two sizes bigger than text, which means that 10 and 12 is a perfect combination.
Line spacing
Business documents tend to be single-spaced, but you can go up to 1.5 lines at the most. Nothing more.
Headings
The longer the document, the more important it is to include headings. Would you rather read a 10-page document that’s only text from start to finish, or a 15-pager that’s organised into proper sections, subsections, and headings? I choose the latter every time. Keep the formatting of headings consistent. I prefer to use bold and italics, but you might prefer bold or underlined. Please resist the temptation to use bold and underlined together. That only serves to distract, as mentioned earlier.
Don’t leave your reader hanging
Make sure that you don’t have a heading on the bottom of one page and the content on the top of the next.
Numbered lists
Use numbered lists so that your reader can easily refer to 1.2.1 instead of bullet point number 13. If you must use bulleted lists, don’t use too many and please make them simple (no one wants to see fancy symbols).
Page numbers
I’m a big fan of including page numbers, as it makes a document much easier to navigate. Word allows you to insert an automatic number, and the best version is page 1 of 6. A good place for this is in the document footer.
Version date
Documents aren’t always perfect first time around, and change is inevitable, so it’s handy to put in information that will let readers know that they’re reading the most recent version, especially in terms of changes and/or amendments to legislation. You’ll therefore know if your document is updated with the latest amendments or not.
Proofread before you publish
Catch and correct spelling and grammar mistakes before you publish. It’ll take more time and effort to undo the problems caused by a hasty, poorly-written document than to get it right the first time. Make sure you check for grammatical errors and typos.
A reminder
When it comes to presenting a document as important as your POPIA policy, it’s prudent to call in the aid of a proofreader to make sure that your finished work shows you and your organisation off in the best possible way. Sure, you have the confidence that your work is good, and no doubt it is, but there is always the possibility that you may miss an error. Don’t risk it; call me to find out how I can make your work look great.
Kim Hatchuel
083 657 3377 | kim@a-proofed.co.za
www.a-proofed.co.za
