As another month in lockdown rolls along, we’re just adding our voice to the cacophony of people reminding everyone to get their COVID-19 vaccinations. Every reputable report we have read says that a rapid and extensive vaccination programme is the best defence against another wave and further crippling of our economy. Don’t delay – get vaccinated.
Here’s a link to share with anyone in need of some guidance.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (THE FSCA)
FSCA Privacy Statement
The FSCA issued a POPIA Communication on 19 October in respect of its processing activities.
It provided a link to its updated Privacy Statement, which provides the purpose for how and why the FSCA processes our personal information, where it is collected from, why it collects personal information, the types of personal information it collects, publication and access to FSCA registers, third parties that the FSCA will share your personal information with, transborder information flows, your data subject rights, the FSCA’s security practices, IP tracking and retention policy, amongst others.
In a bid to ensure that the personal information that it has is complete, accurate, and up-to-date, the FSCA has requested that you ensure that your details are up-to-date. This is probably linked to the information request as described below.
For a copy of the full communication, click here.
FSCA Information Request 2 of 2021
The FSCA issued a “Request for Information” to all registered financial institutions on 11 October. There is a penalty for not submitting by 15 December 2021, so “request” is a bit of a misnomer.
We have noticed numerous information errors that have crept in during one of the FSCA’s data migration exercises, and have been correcting them as they are discovered.
Despite the system not actually functioning, we will resolve this with the FSCA and ensure that the relevant information is updated where we are the appointed compliance officers. See the notice here.
Universal life policies
The FSCA released a statement on universal life policies on 4 October. The document follows the lines of the statement the Regulator released regarding the funeral benefits industry premium increases.
The FSCA has noted increased complaints regarding universal life policies, and is engaging with life insurers to try to develop fair customer outcomes.
It seems that the FSCA is aligned with insurers’ premium determination methodology, and is engaging rather than implying that insurers should make all the compromises. This is most likely because it has been involved with these products for some time, has a handle on them, and has insight into the insurers – so much so that these products were part of the rationale for the Policyholder Protection Rules revisions.
As positive customer outcomes are the intention, we’re sure that the parties will work out an equitable solution.
Preparation guidelines for RE1 and RE5
The FSCA has once again updated the guide to the Regulatory Exams. Remember to use this version or pass it on to anyone preparing to write either of the exams.
FSCA Annual Report
The FSCA released its 2020/2021 Annual Report on 6 October. We’ve covered many of the topics over the past year, but should you want to see everything that went on at the Regulator, click here.
Tribunal cases
We’re sure you remember the Sharemax property investment debacle. Recently, two appeals were submitted to the FSCA Tribunal by brokers after the FAIS Ombud found in favour of the clients.
The Tribunal duly reviewed each case and dismissed each appeal. Unless there are incredibly motivating reasons, it’s unlikely that any brokers involved will be successful in having the decisions overturned.
NATIONAL TREASURY
Annual Report
National Treasury released its 2020/2021 Annual Report on 4 October.
The effect of the COVID-19 lockdown is clearly evident as earnings were down by R1,696 billion. This is attributed to a reduction in interest income as well as no-guarantee fees being paid by SAA (South African Airways) and SANRAL (South African National Roads Agency Limited). Like any organisation, there are offset costs as well, so it’s not all doom and gloom.
Read the full report here.
Sasria
National Treasury released a media statement regarding Sasria’s progress in paying claims arising from the social unrest in July this year.
Of significance was the indication that Parliament will be providing R3,9 billion to Sasria through the Special Appropriation Bill. At the time of release, over R5,8 billion has been paid to insureds. Sasria aims to continue with interim payments on claims over R30 million, and aimed to settle 80% of the claims between R1 million and R30 million by now.
Let’s hope that policyholders maintain their policies given the increases announced last month.
Financing a sustainable economy
National Treasury released an updated technical paper outlining foundational steps towards encouraging long-term investments in sustainable economic assets and projects. The intention is to spearhead the transition to a low carbon economy. South Africa is likely to be severely negatively affected by climate change and any practical changes will take many years to show results, so it’s good to see this being addressed despite the denialists.
The effects on businesses from a compliance perspective will once again be broad and invasive, and there are specific areas affecting the financial services industry in terms of the Financial Stability Board’s disclosure on the Task Force on Climate-related Financial Disclosures (TCFD), climate risk scenario stress test criteria for the financial sector and regulators, enhancing the use of sustainable finance mechanisms and building capacity, and compliance across the financial sector.
The paper includes a more holistic approach to sustainable finance, expansion of the list of sustainable finance instruments, and better addresses issues of biodiversity, circular economy, water, and environmental risk.
Read the full report here.
FINANCIAL INTELLIGENCE CENTRE (FIC)
FATF Mutual Evaluation Report
In August, we mentioned the Financial Action Task Force (FATF) Mutual Evaluation Report of South Africa’s Anti-Money Laundering (AML) and Terrorist Financing (TF) regime.
As we mentioned there were various findings by the FATF that South Africa has been given 18 months to remedy. We can expect to see a lot of activity by the FIC.
The full report is available here.
FIC advisory releases
The FIC released two advisory notices on 25 October. One dealt with jurisdictions under increased monitoring, and the other with high-risk jurisdictions that are subject to a call for action.
The FATF regularly updates the details of jurisdictions that require increased monitoring. Accountable and Reporting Institutions should update their Risk Management and Compliance Plans (RMCP) to conduct further due diligence on transactions originating or routing through the following jurisdictions: Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Jordan, Mali, Malta, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Syria, Turkey, Uganda, Yemen, and Zimbabwe.
Botswana and Mauritius have been removed from the further monitoring list and can be put on a lower risk rating used in your entity’s RMCP.
In a similar vein, the FATF issued serious concerns over the AML and TF standards of the following countries: Democratic People’s Republic of Korea (DPRK) and Islamic Republic of Iran (Iran).
Enhanced due diligence will be required for transactions with entities based in these jurisdictions, and RMCPs will need to be updated accordingly.
SABRIC crime statistics
SABRIC, the South African Banking Risk Information Centre, on behalf of the banking industry, released its annual crime statistics for 2020.
There were effects due to the COVID-19-necessitated lockdown, and these are visible in the statistics. The most obvious being that digital banking fraud increased by 33%, and debit card fraud rose by 22% – both of which seem attributable to changed consumer behaviour and criminals adjusting similarly.
The increases in robberies (42%) and burglaries (12%) seem counterintuitive until you factor in the sudden unemployment spike, and the effect of curfew and restricted travel.
It’s likely that crime syndicates will keep all of these options open and running, and it is imperative that individuals and companies decrease their cybercrime exposure and ensure that personal data is protected.
The full set of statistics is available here.
DEPARTMENT OF TRADE, INDUSTRY AND COMPETITION (DTIC)
Draft Amendments to the Companies Act
The DTIC released the second draft of the changes to the Companies Act on 1 October.
Many of the provisions mirror those of King IV, and introduce new disclosure requirements on public and state-owned companies.
Readers involved in financial services will already be coming to grips with remuneration and social and ethics committees as well as the applicable policies. Similarly, it goes on to define a “true owner” and “beneficial interest” which financial services has been grappling with for some time already.
Interesting cases will no doubt abound given the provisions regarding share repurchases, takeover provisions, and invalid share creation.
It is also proposed that changes to companies’ Memorandum of Incorporation will only take effect 10 days after they are filed. Some forward planning will therefore be required.
Another proposed change is a requirement to have the securities register updated annually, making the shareholding public knowledge through CIPC (Companies and Intellectual Property Commission) without submitting a request to the company.
Read the comprehensive explanation and draft bill here.
INFORMATION REGULATOR – PROTECTION OF PERSONAL INFORMATION ACT (POPIA)
New Information Regulator email addresses
The Information Regulator published a media release on 15 October 2021 detailing its new email addresses for general enquiries, complaints, and compliance.
Amended PAIA Guide
The Information Regulator has also amended its guide on how to use the Promotion of Access to Information Act (PAIA) and published it in the 11 official South African languages.
We’ve also noticed that some limited functionality has returned to the Information Regulator’s website, and we have provided the links below for the different languages.
The guide states that “there is no requirement to compile it in more than one language or in a specific language, although it is recommended that the PAIA Manuals of private bodies should be at least in English.” This is a great relief in terms of the number of languages a private body’s PAIA Manual should be published in. This contrasts with regulation 3(1) of the PAIA Regulations published on 27 August, which states that “an information officer must have a copy of the guide, in at least two of the official languages…” The requirement for publishing the guide in multiple languages is therefore only applicable to public bodies.
As PAIA is meant to give effect to a person’s rights of access to information and accountability, it is designed to empower people to use the law, and so helps to facilitate requesting access to information in different ways. One does not need a lawyer to make a request for access to information in terms of PAIA.
It’s important to note the process for PAIA requests, which is summarised diagrammatically in the guides. Particular attention is to be paid to the timelines.
Read the guides here:
Amended POPIA regulations
The POPIA regulations of December 2018 are to be amended. The invitation to comment to the amendments was published on 15 October 2021 and are to be submitted to the Regulator by 15 November 2021. We will be reading and responding to the proposed amendments.
The proposed amendments are as follows:
- Data subjects will be able to submit objections to processing of their personal information at any time and free of charge, by email, telephonically, by SMS, whichever method is expedient (this would probably include WhatsApp where applicable), and by fax.
- Data subject access request procedures for correction, deletion, or destruction will need to be responded to within 14 days on what has been actioned in relation to the subject access request.
- Deletion of the requirement of the responsibility of Information Officers to develop, monitor, maintain, and make available a PAIA Manual as it is an amended requirement in terms of the PAIA regulations.
- The words “private or public body” may be replaced with “relevant body/bodies” that draft sectoral codes of conduct such as the Credit Bureau Association.
- Processes for obtaining consent from data subjects to market to them by way of direct marketing. Written consent will be required to be obtained by way of an “opt-in”, which means consent must be explicit and the data subject should know what they are consenting to.
- A procedure for data subjects to lodge a complaint to the Information Regulator where a data subject’s personal information has been interfered with, by way of a breach of the processing conditions, non-compliance with the data breach notifications.
- Proposed payment terms for administrative fines served on responsible parties when issued with an infringement notice by the Information Regulator. It proposes that the Information Regulator will take into consideration the financial circumstances and relevant compelling reasons that may impact on the responsible party’s affordability to pay the administrative fine.
Read the draft amendments here.
Prior Authorisation
We will be attending the Information Regulator’s webinar on Prior Authorisation on 27 October 2021. It will focus on who should apply and how, as well as provide additional guidance on the criteria for Prior Authorisation applications.
The deadline for Prior Authorisation applications was extended to 1 February 2022, presumably because of the Information Regulator being flooded with applications as a result of responsible parties not being provided with adequate guidance.
We will report on the webinar in next month’s Legislative Update.
Registration of private bodies and Information Officers
The registration of private bodies will be by manual submission while the electronic portal is under construction.
When submitting your registration manually, we would suggest that you copy us in and request a read receipt. Please ensure that the completed forms are legible, or you may be required to submit a data subject access request to correct any errors.
PAIA and private body PAIA Manual template
A reminder that the PAIA Manual deadline for publishing private body PAIA Manuals is still 31 December 2021.
Please contact us should you require assistance with the drafting of your PAIA Manual.
A-PROOFED
It’s at this point of the Legislative Update where most of you stop reading. You’ve read all that Omega Compliance Solutions has to say about financial services compliance, and it’s enough reading for now.
And then there’s this random woman who writes something vaguely – well in your opinion anyway – interesting every month. What does she have to do with financial services compliance anyway?
How wrong can you be!
Picture the scene: you’ve put in the overtime to get your document as it should be. There’s always some sort of deadline anyway, right? By now you’re squint, and to top it all off you can’t even see the proverbial wood for the trees. But, to get it off your desk, you hit send, and it’s out there in the ether. As with most of these sorts of documents, it would have to go onto your website, and be around when Bryan does his quarterly compliance meeting.
Feeling relieved and rather self-satisfied, you pick up a hard copy and have a flick through, admiring your handiwork. But wait… It can’t be… Tell me it isn’t true! There’s a typo on page 2. Another on page 3. And the numbering’s gone funny on page 4. No!
Please don’t tell me it’s never happened to you. It’s almost impossible for someone to accurately proofread their own work and be consistently successful.
So, what to do? Is there a guaranteed way to spot those pesky typos and hard-to-perfect page layout? The real key to avoid this mess is to have someone else proofread your copy. This is where I come in – the real reason I get this space at the end of the Legislative Update.
At this point, you may be expecting me to tell you what it is that proofreaders do. How do I earn the Big Bucks? But that would mean giving away my IP, and you’ll never get in touch because you’ll have all my knowledge! So, I’m thinking that it’s probably best to end here with details of how to get hold of me should you decide that you need my help.
Kim Hatchuel
083 657 3377 | kim@a-proofed.co.za
www.a-proofed.co.za
OK, I lied. Here are a few things to consider.
- The first thing I do when you send me something to proofread is to create a style sheet, if you haven’t provided one. It’s similar to a “To Do List” and it’s used to track spelling and style choices specific to your company, and possibly to that particular document. It also lists recurring details, spelling of names and places, which conventions are being followed if there’s more than one acceptable option (e.g. OK vs. okay), and more.
- I will read your document at least three times – once for spelling and grammar, once for consistency, and once for layout.
- I’m also going to check punctuation because, while focusing on the words is good, punctuation can’t be neglected. My favourite thing to do is to check for misplaced apostrophes (yip, so many people get it wrong), too many commas, and semi-colons which people use incorrectly. It’s surprising how often a simple thing like incorrect punctuation can change the meaning of a piece of writing. (Think: “Let’s eat, granny”, and “lets eat granny.”)
- When it comes to figures in tables, it’s so important to check, double check, and triple check the numbers, and make sure that they add up correctly, etc. Stating that the value is R100,000 instead of R1,000,000 can land you in some very hot water.
You’ll get your document back with changes marked up using Word’s track changes feature. This is so you can see what I’ve changed.
Proofreading isn’t just about reviewing your words. I will make sure that the layout is correct in terms of established specs. I’ll also fix page numbering, column alignment, fonts and font size, headlines, sub-headings, captions, and footnotes if you have any.
All of this proves that when it comes to presenting a report, a brochure, a FAIS policy, or a company newsletter, you should always consider getting 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.
I’ve provided my contact details again. Just in case anyone missed them the first time.
Kim Hatchuel
083 657 3377 | kim@a-proofed.co.za
www.a-proofed.co.za
