May 2024 Legislative Update
As you read this, you are either desperately trying to complete your CPD hours for the 2023-2024 cycle (not again!) or are realising just how stressful it could have been…
There are numerous changes the financial services industry will have to implement over the next few months as detailed below, so make sure you take a look to keep up to date.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)
Continuous Professional Development (CPD)
If you’ve left it a bit late, you may still have a few hours to complete your CPD hours before the 31 May deadline. Remember to record them in your financial service provider’s (FSP’s) Competence Register by 15 June, but make sure to get them done before time runs out!
2024 Financial Statements Submission
Since the majority of FSPs have a February year end, they are due to submit their financial statements to the FSCA four months after year end – so by 30 June.
Many FSPs have already submitted, but it is likely there will be a bottle neck given the volume and the new requirement that statements may only be submitted electronically. We would recommend FSPs aim to submit a little earlier this year.
As usual, we will submit the financial statements on behalf of our clients.
More unrealistic crypto asset return warnings
In the seemingly endless stream of entities and persons abusing consumers naïveté when it comes to crypto assets, another warning has been released regarding a group calling itself “Coin Max” purporting to be associated with Bybit FTZE. As much as Bybit FTZE has submitted an application for approval as a Crypto Asset Services Provider and is permitted to continue trading, it is not linked to Coin Max. As usual, Coin Max is offering unrealistic returns.
Scammers impersonate the FSCA
In one of the most brazen cases we have seen, scammers are impersonating one of the FSCA’s staff members, contacting members of the public and requesting that they pay over funds so that their investment monies will be released. It seems the scammers are aware of the FSCA’s investigations and are targeting the victims of the scams!
A warning about an alternate investment provider
Another warning about an entity calling itself RNI Aquaculture which offers unlicensed financial services through YouTube, TikTok, and Facebook.
… and one impersonating SpaceX
This warning is about individuals using the Facebook pages SpaceX Investment and SpaceX-Shares-Investment to offer members of the public investment products while promising unrealistic returns. Of importance is the fact that the entities are not authorised FSPs as required.
The FSCA has clearly noted the prevalence of online scams and that South Africans lose millions of rands every year to fraudsters. Illegal operations are often well-disguised as legitimate operations.
The FSCA expanded on the usual warning by reminding consumers and investors that they should not accept any financial advice, assistance, or investment offers from persons who are not authorised by the FSCA to conduct financial services to avoid becoming a victim of a scam.
Authorised financial services providers must display the fact that they are authorised on their documentation. The public is advised to be on the lookout for danger signs when dealing with persons offering attractive investment opportunities. These red flags include unrealistic returns, claims that the entity or person is not required to hold a FAIS licence, and vague information about the investment product. The FSCA also advised the public to take care when dealing with entities offering financial products on social media platforms as the platforms are popular locations for illegal operations and scams.
FINANCIAL INTELLIGENCE CENTRE (FIC)
NPO assessed for terrorist financing exposure
The FIC released a report detailing its assessment of the non-profit organisation (NPO) sector in relation to the sector’s terrorist financing risk.
The report will result in additional controls being applied to NPOs to reduce the money-laundering risks that affect the sector.
Draft directive for crypto transferring Accountable Institutions (AIs)
The FIC intends issuing Directive 9 that will require AIs that engage in crypto asset transfers for or on behalf of their clients to share information with the FIC when they facilitate transactions involving digital assets.
The FIC is inviting written comments at consult@fic.gov.za by 31 May 2024.
FICA Booklet
The FIC released an updated version of the FICA Booklet which now reflects the various updates and changes that have been implemented. This is an essential document for anyone responsible for anti-money laundering controls, reporting, or monitoring. We wouldn’t recommend you print the 312 pages though!
PRUDENTIAL AUTHORITY (PA)
Guidance notes on climate-related governance and risk practices
The PA released guidance notes for insurers and banks, as well as related disclosures for each of them.
An integrated approach is used and the requirements cover all areas of operations of the entities, including the risk management, compliance, actuarial (for insurers), internal audit, control functions, outsourcing and transition planning. The results will need to be included in the ICAAP and ORSA returns respectively.
As usual, the companies’ chief executive officers and auditors are required to provide written acknowledgement.
Outsourcing by insurers
The PA and FSCA released Joint Standard 1 of 2024 which sets out the minimum expectations on insurers who outsource any of their material functions.
As per the previous GOI5 which the standard replaces, insurers are required to have a documented policy and procedures to assess and mitigate any risks when outsourcing. The intention is that insurers must assess the risks posed by outsourcing a function and then ensure that they are outweighed by the benefits. The standard provides the contractual requirements of any outsourcing arrangement.
In addition, insurers must inform the authorities at least 30 days prior to entering into such arrangement.
The standard also notes that any outsourcing arrangements entered into prior to the commencement of the Joint Standard must be reviewed and aligned to the standard when the contract comes up for renewal or within 24 months (i.e. by 15 May 2026). Insurers are required to implement the standard within six months (15 November 2024), which essentially means they will need to update their outsourcing policies by then.
Cybersecurity and cyber resilience
The FSCA and PA released Joint Standard 2 of 2024 which sets out the requirements for sound practices and processes relating to cybersecurity and cyber resilience for financial institutions.
The specific financial institutions affected are: banks, insurers, market infrastructures (stock exchanges, central securities depository, clearing house, or trade repository), discretionary FSPs, administrative FSPs, category I FSPs that provide investment fund administration services, retirement funds registered under the Pension Funds Act (PFA), over-the-counter derivative providers, administrators approved in terms of the PFA, and credit rating agencies.
The Joint Standard is envisaged to commence on 1 June 2025, but affected entities are encouraged to start implementing the requirements already.
Draft changes to banking returns
The PA released two draft Directives to inform banks of the draft changes to the offshore operations (BA600 and BA610) and the capital adequacy and leverage (BA700) returns.
The PA plans to implement the changes from 1 July 2025. Comments can be submitted to SARB-PA@resbank.co.za by 21 June 2024.
INFORMATION REGULATOR (IR)
2024 annual returns
The IR has requested that entities complete their annual returns detailing the number of requests for access received, access granted in full, access granted in terms of mandatory disclosure in the public interest, access refused fully or partially, cases extended, internal appeals to relevant authority, and the number of internal appeals that were refused.
The eServices portal for submission can be accessed here. The portal will close on 30 June 2024. To be able to submit the return, the Information Officer or Deputy Information Officer must be registered with the Regulator and it may be necessary to complete the registration again if the officer’s details have not been migrated (so you’ll need to re-register – Ed.).
The report is comprised of a few questions and should take a few minutes to complete.
NATIONAL CREDIT REGULATOR (NCR)
Appointment of acting CEO
The NCR has appointed Lynette de Beer as the acting chief executive officer of the Regulator with effect from 1 May 2024. Nomsa Motshegare has served as the NCR’s chief executive officer for more than 10 years and has chosen to retire on 30 April 2024.
Ms de Beer is a chartered accountant and served as the chief financial officer of the NCR prior to this appointment.
A-PROOFED
Have you noticed how words are starting to get a little too cozy with each other? Lately, there’s a trend that’s bringing them closer than ever, like they’re besties who’ve decided to become roomies. Yes, we’re talking about the delightful phenomenon of mashing two words together into one, creating adorable – or possibly annoying – new neighbours.
It’s like words have suddenly decided they don’t need personal space anymore. Take “a lot”, for instance. Traditionally, “a lot” was the go-to for indicating abundance. But now, it’s as if “a” and “lot” had a chat over coffee and decided, “Hey, let’s be one word.” And voilà, we now see “alot” making appearances in texts and social media posts, looking oh-so-content in its singularity. (You wouldn’t talk about apeach, or agiraffe, would you?)
Next up, “thank you” has been a staple in polite exchanges for centuries. But why waste time and space with a space? Here comes “thankyou”, the ultimate expression of gratitude for those in a hurry. It’s quick, it’s efficient, and it’s got a certain charm to it. Imagine receiving a “thankyou” note – it’s like the writer is so genuinely appreciative, they couldn’t even pause for a breath.
Then there’s “every time” versus “everytime”. The former is a classic, reliable duo used to express repetition. However, “everytime” feels like it’s one step ahead, prepared for action in a single bound. It’s like the superhero version of “every time”, swooping in to save the day with linguistic efficiency.
And who could forget “every day” versus “everyday”? “Every day” refers to the daily occurrence of things, (I have a coffee every day), while “everyday” describes something ordinary or routine (my morning coffee is an everyday occurrence). But in the world of word amalgamation, lines blur, and “everyday” seems to be taking over both roles.
Mashing words together like “a lot”, “thankyou”, “everytime”, and “everyday” when they aren’t meant to be combined can create confusion and detract from the clarity of your message.
Errors like these can make your writing appear unpolished and unprofessional. Imagine sending an important email or a business proposal littered with these mistakes—it’s likely to leave a less-than-favourable impression. Proper grammar not only ensures clarity but also demonstrates your attention to detail and respect for the language.
This is where a professional proofreader can be invaluable. Hiring someone like me can save you from making these embarrassing mistakes that might otherwise slip through the cracks. I have a keen eye for detail and an in-depth understanding of grammar rules, so I’ll ensure that your writing is clear, correct, and effective. Whether it’s for a business document, a blog post, or a simple email, having me proofread your work can make all the difference in maintaining professionalism and credibility.
So, next time you’re tempted to join the word-mashing trend, think twice. Embrace the help of a proofreader to keep your writing sharp and error-free. Count on me to make your work look outstanding. After all, good grammar never goes out of style.
Kim Hatchuel
kim@a-proofed.co.za
083 657 3377
