November/December 2021 Legislative Update
December: “At last!” or “Already?”– it all depends on your perspective. However you feel about the end of the year, it’s definitely a time to slow down a little and reflect on the year that’s passed.
We hope you travel safely or stay safe at home, and if you’re allowed onto the beach – enjoy it!
Discovery Health’s analysis of the effects of the COVID-19 Pfizer vaccine on members of its schemes
We came across this article recently and, given that we love statistics and technical issues, it piqued our interest. It is so well presented that anyone can understand it. We’re sure the writers won’t mind us quoting their comprehensive review, and have included their conclusions below:
- The Pfizer vaccine’s effectiveness in protecting against COVID-19 admission risk is 73% in the 14 to 41 days post-dose one, and 92% between 14 and 99 days after dose two.
- The Pfizer vaccine’s effectiveness in protecting against COVID-19 mortality risk is 79% in the 14 to 41 days post-dose one, and 94% between 14 and 99 days after dose two.
- At 28 days after dose one and 14 days after dose two, stabilisation in the vaccine effectiveness in protecting against COVID-19 admissions and mortality was
- Encouragingly, in considering the effect of gender, type of chronic condition, and province/location, little to no variation in vaccine effectiveness in protecting from COVID-19 admission was observed.
- It noted a 5 to 7% decline in vaccine effectiveness in protecting against admission in people over the age of 80, and in individuals who have three or more chronic conditions.
- To date, Discovery hasn’t observed any waning in vaccine effectiveness over time (in the three-month data interval considered) for COVID-19 admissions and death.
Discovery Health concludes that the “data shows that being vaccinated with the two-dose Pfizer vaccine confers significant protection against serious COVID-19 illness (relative risk of admission to hospital) and death.”
For the last time this year, if you haven’t done so already, please go and get vaccinated, for yourself, your family, and for your community. Let’s try to stop the fourth wave.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (THE FSCA)
Submission of Representative registers
The FSCA notified industry of the changes to the Rep register automated submission process in FSCA Communication 19 of 2021.
FSP5 forms can still be submitted to the FSCA Licensing and Business Centre (i.e. as profile changes). Additions and removals will continue to be able to be loaded via the e-portal.
Where we are the appointed compliance officers, we manage register change notifications to the FSCA, so please continue to direct your requests to us and we’ll ensure they are suitably processed.
If you handle your own register, particularly if there are frequent changes or if you have many Reps whose data you manage via your electronic systems, you may want to join the test phase. This will involve submission via system-to-system integration or XML as a web service. The submission will have to be over a secure protocol (HTTPS), and the data will have to be encrypted. (Password protecting an Excel spreadsheet is NOT encryption! – Ed.)
Further technical guidelines are available here.
Request for Information (RFI)
We are still completing the RFIs for many of our clients as we have struggled with numerous system errors and issues outside of our control.
At this time, we’re not certain if the FSCA will grant an extension to the 15 December deadline, but certainly hope so given that there are still hundreds of outstanding submissions because of these issues.
Retirement fund economies of scale report
National Treasury and the FSCA published an updated joint economies of scale report on the retirement fund industry of South Africa on 17 November 2021. The original report was published in 2011.
The findings of the report show:
- A general decrease in the number of funds.
- An increase in the average fund size.
- An increase in average administrative expenses per member.
- The optimal size of funds is now 300 000 members (from 220 000 in 2011).
- Most funds in South Africa are below this optimal size, while only 0.4% are above this figure.
Of concern is that the report found that most funds operate inefficiently, with differing efficiencies across fund sub-type, class, and benefit structure. Fund managers should aim to use the information to become more efficient, before the regulators decide if there is cause to intervene.
PRUDENTIAL AUTHORITY (PA)
Withdrawal of temporary relief measure of the liquidity coverage ratio for banks
The PA issued a notification to banks, controlling companies, branches of foreign institutions, eligible institutions, and auditors of banks and controlling companies of the withdrawal of the temporary liquidity coverage ratio (LCR) relief measure.
The PA is comfortable that financial markets have normalised sufficiently and that banks have received increased deposits over the course of the last 19 months that the LCR should return to normal. At present it stands at 80% to accommodate the effects of COVID-19 on the economy. By 1 January 2022, 90% will be required and 100% by 1 April 2022.
This is a sign that we really are moving to a new ‘normal’ – at least economically.
Read the notice here.
Cessation of insurance licenses
The PA confirmed that the following insurers had not completed the license conversion process in terms of the Insurance Act, 18 of 2017, and that they were no longer licensed insurance companies with effect from 1 July 2020.
Long-term insurers
Netcare Life Limited (1994/005293/06)
Real People Assurance Company Limited (2001/028918/06)
Community Life Insurance Company Limited (1998/013068/06)
Relyant Life Assurance Company Limited (1995/003968/06)
Channel Life Limited (1969/012487/06)
Strategic Investment Service Life Company Limited (2006/037946/06)
Metropolitan Life International Limited (1991/005540/06)
Old Mutual Alternative Solutions Limited (1999/012567/06)
Short-term insurers
Orange Insurance Limited (2003/031307/06)
Shoprite Insurance Company Limited (1948/030484/06)
Intermediaries Guarantee Facility Limited (1989/007489/06)
Densecure SOC Limited (1992/001706/07)
Absa Insurance Risk Management Services Limited (1992/001738/06)
Nova Risk Partners Limited (1998/011947/06)
Momentum Alternative Insurance Limited (2001/027786/06)
Momentum Structured Insurance Limited (1991/005238/06)
Note that Shoprite Insurance Company Limited appeared on the PA’s list twice. We have removed the duplicate reference.
The official notice is here.
License conversion process
In a related release, the PA granted insurers 30 days from 26 November to make representations regarding their outstanding license conversion matters.
This is predominantly to allow insurers to align their classes and sub-classes in terms of their new licences.
Read the press release here.
SOUTH AFRICAN RESERVE BANK (SARB)
Monetary policy implementation framework
The SARB released a consultation paper on 26 November that proposes reforms to South Africa’s monetary policy implementation framework (MPIF).
Note that the MPIF is not the same as the monetary policy framework (MPF). The MPF sets the objectives for monetary policy and the MPIF provides the practical mechanisms for implementing them.
The SARB’s proposal is to amend the framework of the loans to banks via the shortage system (i.e. where banks borrow from the SARB and repay at the repo rate) with a tiered floor system. This entails allowing banks to have an excess supply in reserves which would earn interest at the repo rate. Essentially, the SARB would prefer banks to deposit with the SARB rather than borrow from them.
Would you put your money under the SARB’s care?
Methodology and policies governing the SARB-administered interest rate benchmarks
On 30 November, the SARB released a report summarising the public comments and the next steps in its process of transforming widely used interest rate benchmarks.
The affected benchmarks are as follows:
- South African Rand Interbank Overnight Rate (ZARIBOR)
- South African Secured Overnight Financing Rate (ZASFR)
- South African Rand Overnight Index Average (ZARONIA)
- Term Wholesale Financial Corporate Fixed Deposit Benchmark Rate
- Term Wholesale Non-Financial Corporate Fixed Deposit Benchmark Rate
Feedback by participants regarding the draft Technical Specification Paper (TSP), together with the outcomes of the benchmark back-testing exercise, has informed revisions to the specifications. The outcome of this exercise will guide decisions on the new benchmark rates. The final TSP will be published in due course, and is expected to coincide with the beginning of the observation period for ZARONIA, at which time the rate will be published daily.
Ending “Too Big to Fail”
The SARB issued a discussion document entitled ‘Proposed arrangements to support operational continuity in resolution’ on 30 November.
The document outlines proposals for arrangements to support operational continuity in resolution, including: designing arrangements to support operational continuity, identifying and assessing risks to operational continuity, mapping essential services, and mitigating risks to operational continuity. The proposals are aimed at improving the resolvability of designated institutions.
A regulatory instrument will be created based on the results of the consultation process and after promulgation of the Financial Sector Laws Amendment Bill (FSLAB). The promulgation of the FSLAB will empower the SARB to achieve the orderly resolution or winding down of a failed or failing designated institution.
Comments are due by 14 February 2022.
NATIONAL TREASURY
The South African Special Risks Insurance Association (SASRIA) – Civil unrest claims progress
SASRIA released a statement on 16 November which provided an update on the claims arising from the civil unrest in July.
At the time there were 14 051 claims valued at R32 billion which necessitated National Treasury providing a further R11 billion in support funds.
SASRIA aims to settle 80% of the claims before the end of the year, either directly or through agent insurers.
FINANCIAL INTELLIGENCE CENTRE (FIC)
Financial flows associated with illegal wildlife trade in South Africa
On 16 November 2021, the FIC released a report on the effects and methodology of illegal wildlife trade. The report was written by a working group of the South African Anti-Money Laundering Integrated Task Force.
The importance of the report is in creating awareness about the illegal wildlife trade in the financial services industry.
The research confirmed that cash is used extensively in this trade and that perpetrators include game rangers, vets, casino staff, construction and transport industry workers, as well as customs and other government officials. Payment methods and laundering tactics become much more sophisticated further up the supply chain.
Accountable Institutions will need to consider amendments to their Risk Management and Compliance Plans to include better assessment of source of funds and client risk profiling as this information should alter their risk profiling methodology.
INFORMATION REGULATOR (IR)
Promotion of Access to Information Act (PAIA)
A reminder that the manual as required in the PAIA must be completed and uploaded to company websites (if you have one) by 31 December 2021. Contact us if you want us to draft a specific version for your business, or if you just don’t have the time to get it done.
The IR published its PAIA manual in October and is available in three languages (English, Sesotho, and Afrikaans) in the documents section.
Information Regulator website domain
The Information Regulator has a new and secure website domain as of 2 December. This site mirrors the previous website, however the registration portal is still not available. Registration is being done manually for the time being.
Prior authorisation
The webinar hosted by the IR on 27 October shed some light on who should be applying to the IR for prior authorisation. Of the more than 300 applications received, the regulator is assessing approximately 200 applications.
The regulator acknowledged that there are some mistakes in the previous Guidance Note and application form, and that it will be releasing an updated application form and Guidance Note on prior authorisation.
Unless a further extension is given, from 1 February 2022 organisations that process certain types of information will have to apply for prior authorisation. The clear examples of these types of organisations are those that conduct credit and criminal background checks, transfer special personal information to third parties in foreign countries, and process child personal information.
Prior authorisation revolves around unique identifiers (such as identification, passport, employee, account, and policy and membership numbers), where a responsible party plans to process a data subject’s unique identifier for a purpose other than the one for which the identifier was specifically intended at collection, and with the aim of linking the information with the information processed by other responsible parties.
Where a responsible party wishes to conduct a credit or criminal check via organisations that offer these services, the responsible party is not required to apply for prior authorisation.
Another example is in banking. Banks use unique identifiers such as identification numbers to retrieve all the information related to a data subject.
Financial services providers will make use of policy, cell phone, and identification numbers to retrieve a data subject’s profile for the primary purpose of performance of the contract of insurance as intended at collection of the personal information, and are thus not required to apply for prior authorisation.
When the updated prior authorisation guideline has been published, we will provide a tool and guidance for accessing whether prior authorisation is to be applied for or not. It must be noted that, where an application for prior authorisation is submitted, the planned or current processing activity that makes use of unique identifiers must be suspended until authorisation has been obtained, and a Personal Information Impact Assessment will have to be undertaken in support of the application.
DEPARTMENT OF EMPLOYMENT AND LABOUR
Employment Equity Amendment Bill
On 17 November, National Assembly passed the Employment Equity Amendment Bill and sent the draft law to the National Council of Provinces.
The Bill will allow the Employment and Labour Minister to set employment equity targets for different business sectors. The minister can set targets for different occupational levels, sub-sectors, or regions.
At present we aren’t aware of the proposed targets.
FROM A-PROOFED
A few ways to manage your email inbox
What with sifting through spam, crafting the right responses, and keeping tabs on emails that require follow-up, staying on top of your inbox can feel like a job in itself.
And when a client asked me recently to resend an email I had sent just a week before as she couldn’t locate it, I thought it would be a great idea to share my secret to an efficient, organised inbox.
Only keep emails requiring immediate action in your inbox
Having an empty inbox may seem impossible, but I believe that by being ruthless about which messages get to take up real estate in your inbox, you can get pretty close.
Most days, my email inbox has fewer than five messages in it. This is intentional. I want to be able to open my inbox and immediately see what’s most urgent and requiring a response. This habit pushes me to take action on items in an extremely timely manner. I can’t function with an inbox that’s flooded with unanswered emails.
Make folders and sub-folders your new BFF
This is very definitely my favourite tool. I have many folders and sub-folders, so I can find what I need within seconds because I know where it is stored, and how to locate it quickly.
Set inbox rules or filters
Set up inbox rules or filters that will take action for you, and can help you quickly categorise emails into the really important stuff, and separate the everyday spam and marketing emails. Rules help you to ensure that you keep the clutter to a minimum.
Use your Outlook calendar to track emails that require follow-up
Because some emails might require more than a simple reply, I’d recommend adding a reminder on your Outlook calendar. If I receive an email that requires not only an immediate response but also some sort of follow-up action, I move the email to a designated sub-folder and put a reminder on my calendar which includes the folder location and the date when follow-up is required. If you’re using Gmail, you can click on the ‘More’” button in the toolbar and select ‘Create event’.
Don’t let junk mail languish in your inbox
If you get promotional emails, be swift with the unsubscribe button. Spam mails (which seem like an everyday occurrence in my inbox) need to be moved to the junk mail folder and permanently deleted from there. Click on Shift and Del, and it will be gone forever! Bear in mind that hitting ‘Unsubscribe’, or ‘Manage preferences’ in any spam email will only show the spammer that your email address is valid. It will not unsubscribe you; you’ll just get more spam.
Set aside time blocks for checking email—and stick to them
Some people suggest setting specific times during the day to go through each email and thoughtfully respond, archive, or save for later. This way, you won’t multitask, and you’ll be able to get through all your emails quicker because you’ll be focused on the task at hand. In addition to using time-blocking to stay on top of daily emails, I’ve read about people who recommend setting aside time once a week for inbox maintenance. Get rid of the irrelevant, archive what’s been done, and prioritise your to-do list.
Turn off email notifications
Even if you’ve resigned yourself to only checking emails in pre-designated blocks, the siren song of your inbox notification might be too great a temptation to resist. If that’s the case, the solution is simple: Turn off your notifications because they’ll distract you from doing what you were working on before that little ping. You can always set up an overriding alert that The Boss (or someone equally important) has sent you an email.
Email on your phone
This is something I’ve never done. I don’t get my emails on my phone. My reason – some emails can wait, and I don’t want to be a slave to my phone. I do, however, think I’m in the minority here! Remember, that if your email programme and your mobile device are set up to use POP3, then each device will download new mail from the server to that device. So when you delete an email on your computer, it will still be on your mobile device. And vice versa.
Do you have any other ways you maintain your inbox? I’d love you to send me an email about it. In this instance, I’d be happy to have an inbox full of emails to answer.
