It’s finally here – the end of 2024! We wish everyone a peaceful festive season and safe travels if you are going away.
We’ve rolled November and December into one Legislative Update, so you can get through everything before your office party.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)
Crypto-asset FSPs granted a regulatory exam (RE) extension
Key Individuals of crypto-asset financial services providers (FSPs) have been granted an extension until 30 June 2025 to complete their REs.
Let’s hope it’s because of a lack of preparation time rather than the difficulty of the exam!
Funeral insurance regulations review
The FSCA and the Prudential Authority released a joint standard to invite stakeholder comments and participation in a project to review the regulations governing the distribution of funeral insurance.
If you would like to take part in the review, contact the FSCA via FSCA.funeralins@fsca.co.za and provide the names, email addresses, geographical locations, designations, and organisations represented.
Regulatory action
The FSCA noted that it took action against Gundo Wealth Solutions (Pty) Ltd and its appointed representative and key person, Ralliom Razwinane.
The investigation was in respect of suspected breaches of financial sector laws regarding the advice rendered to clients to invest in Venda Building Society Mutual Bank Limited (“VBS Bank”).
The FSCA imposed an administrative penalty of R3 million on Razwinane and debarred him for 10 years. Razwinane is prohibited from:
- providing, or being involved in the provision of, financial services;
- acting as a key person of a financial institution; and
- providing specified financial services to a financial institution, whether under outsourcing arrangements or otherwise.
Gundo Wealth Solutions was finally liquidated on 17 August 2021 and its licence lapsed as a result of its liquidation.
Withdrawal of Banxso (Pty) Ltd licence
The FSCA provisionally withdrew the licence of Banxso (Pty) Ltd (FSP 37699) as preliminary investigations indicated its possible association with the Immediate Matrix deepfake advertisements.
The FSCA was concerned about the apparent aggressive and pressurised sales techniques used by Banxso agents when selling financial products to clients, promises of unrealistic returns, the failure to conduct the required risk and needs analyses prior to placing clients in specific financial products, and material losses suffered by clients.
In addition, the Financial Intelligence Centre placed a hold on seven Banxso bank accounts and the National Director of Public Prosecutions successfully applied for a preservation order of the funds in the bank accounts in terms of the Prevention of Organised Crime Act.
The High Court in the Western Cape subsequently set aside the preservation order, but added that Banxso may not withdraw any funds other than to migrate clients to an authorised FSP. It is a condition of the provisional withdrawal of Banxso’s licence that it must transfer all its clients to an authorised FSP.
The FSCA also noted that it is aware of allegations that Banxso is contacting clients and advising them that Banxso’s licence has been reinstated and that it may render financial services. The FSCA is also investigating statements from Banxso clients who maintain that Banxso is continuing to conduct financial services business. The information received by the FSCA indicates that clients are encouraged to commit more funds to Banxso to recover losses made in trading. As this is not the case, Banxso cannot lawfully conduct any financial services business or receive any deposits from clients.
Debarment and penalty of Kabelo Emanuel Mogale
The FSCA imposed an administrative penalty of R1 015 315.87 on Kabelo Emanuel Mogale and debarred him for a period of 10 years after receiving complaints that he may have been providing unauthorised financial services.
Mogale was using the name “Forex Private Jet Injectors” which was not a registered company, rather just the name that he attached to his scheme. The FSCA found that Mogale provided financial advice to clients when he published forex signals via Telegram and made recommendations to clients regarding their trades in forex currency pairs, which are financial products. As such, he was rendering financial services without being authorised to do so.
‘Providing signals’ refers to the practice of persons making recommendations to their clients in respect of trades and prices in financial products. The signal provider is remunerated through a subscription fee or a percentage of profits. Even in the instances of clients suffering trading losses, signal providers may benefit through commissions paid by brokers.
It is not unusual for signal providers to provide fictitious signals and display doubtful evidence of wealth to lure clients into participating.
Regulatory actions
The FSCA has imposed administrative penalties of R30 million each on Stephanus Cornelius Jansen van Rensburg and Frederick Young du Preez and debarred them for a period of 30 years each. A further administrative penalty of R8 million was imposed on Jeremia Jesaja Steyn Jansen van Rensburg who was also debarred for 20 years.
In addition, Elia Christiaan Janse van Rensburg has been debarred for a period of 10 years. The regulatory action followed an investigation by the FSCA in respect of Phahamisa Administrators (Pty) Ltd (previously N-e-FG Administrators (Pty) Ltd), N-e-FG Fund Management (Pty) Ltd, The Wealth Strategist (Pty) Ltd, and the key persons.
The FSCA investigation found that clients’ funds were invested without the requisite mandate from clients. The investments were made in entities that are not regulated by the FSCA. Furthermore, some of the key persons of the N-e-FG entities had an interest in the entities that the clients’ funds were invested in.
Before taking action, the FSCA handed its investigation report over to the National Prosecuting Authority and is aware that some of the complainants also opened criminal cases.
In another case, the FSCA took regulatory action against Maudi Martin Lentsoane and Lehumo Securities (Pty) Ltd. Lehumo Securities (Pty) Ltd was previously known as Regenesis Markets (Pty) Ltd.
The FSCA imposed a joint administrative sanction of R1 million on Lentsoane and Lehumo Securities and debarred Lentsoane for 12 years. This was as a result of investigations into complaints from clients who reported that they did not receive their investment funds despite submitting withdrawal requests.
Warnings
The FSCA warned the public against dealing with Juan Albert Mayer, Umvuzo Lifestyle Creators, AW Fund Management (Pty) Ltd, Dial A Mula Administrators, Hunters Wealth Empowerment, and Umvuzo Management Group.
The entities are soliciting investments from members of the public, promising high returns, and falsely claiming to be associated with Negroni Group (Pty) Ltd.
Negroni Group has confirmed it is not in any way associated with the entities and the FSCA’s view is that the entities are conducting unregistered financial services.
Seven more warnings were issued. One regarding Villion Trade “the people’s broker” where it is most likely that Villion Trade is impersonating Villion Brokers, a funeral policy broker. Villion Trade is offering to trade crypto assets on behalf of members of the public.
Another warns the public against individuals impersonating the FSCA and its Commissioner.
The FSCA received a complaint from an individual based in Germany, who had received correspondence purporting to have been issued by the Commissioner of the FSCA, Unathi Kamlana. The impersonators requested a fee of $10,769 for an “International Legitimacy of Qualification”, which would result in Standard Bank of South Africa releasing $28,154,926.84 to the individual. The complainant reported the matter to the FSCA which is currently investigating the matter.
In a continuation of a warning issued on 18 May 2018, the FSCA warned the public against doing financial services-related business with Donafin (Pty) Ltd and its representatives Sean Westcott and Leon Lincoln as they continue to render unauthorised financial services.
In 2018, the South African Police Service investigated the allegations against Donafin and its representatives, resulting in the arrest of Westcott. The FSCA has learnt that Donafin and Lincoln have continued to provide unauthorised financial services to members of the public in respect of unclaimed pension fund benefits. Donafin and Lincoln are alleged to be charging a fee of R1,500 to assist members of the public with their claims for pension fund benefits.
Then, the FSCA warns the public to be cautious of individuals or entities who are impersonating HF Markets (Pty) Ltd and fraudulently soliciting funds from members of the public. The impersonators are offering forex trading services and investment in crypto currency using the following names: Elite Wealth Consultants, Titans Trade, and Lucrativefxtmtrade; none of which are associated with HF Markets or are authorised in their own right.
There is also an ongoing investigation into the activities of Solis Markets and Eklavya Assets Management (Pty) Ltd. Solis Markets is neither an authorised FSP nor a juristic representative of Eklavya or any other authorised FSP. The FSCA notes that Eklavya advised that Solis Markets is a trading platform.
The public was advised to act with caution when conducting financial services business with FXNONSTOP (Pty) Ltd. The company is offering investment opportunities with guaranteed profits without being authorised to do so, and is promising returns of up to 40% per week.
A similar warning was issued regarding Tiger Agriculture which is offering returns of up to 257% per month. Tiger Agriculture uses referrals and videos on YouTube, TikTok, its website, and Facebook to solicit investment from members of the public into its scheme but is not a registered FSP.
Draft fees and levies for 2025/2026
The FSCA released its draft fees and levies for the 2025/2026 financial year.
The proposal is to increase fees and levies by 5% in general. The exception is that the representative and KI amount for Category I and IV FSPs that provide only Long-term Insurance Subcategory A products and/or Friendly Society Benefits will remain at R250.
Comments can be submitted to FSCA.RFDStandards@fsca.co.za by 10 December 2024.
FINANCIAL INTELLIGENCE CENTRE (FIC)
Financial Action Task Force (FATF) greylisting progress
The FATF Plenary sitting in October yielded some positive results for South Africa’s efforts to be removed from the grey list.
South Africa has one reporting cycle to address the six action items it still has to complete. Three of the items relate to demonstration of the investigation and prosecution of money laundering, terror financing, and unlicensed cross-border money or value transfer services.
One of the items that was to be dealt with was to complete the beneficial ownership registries of companies and trusts. Compliance with this was deemed to be too low to remove it from the list. At this point there is a simple request to industry to complete this information at CIPC.
It seems we can expect the relevant authorities to take action on companies that are not complying with the anti-money laundering requirements.
Jurisdiction monitoring changes
As usual after Plenary meetings, the lists of jurisdictions under monitoring change. The three jurisdictions considered to have significant deficiencies are: the Democratic Republic of Korea, Iran, and Myanmar. Transactions in or out of these jurisdictions require absolute scrutiny.
The jurisdictions under increased monitoring are Algeria, Angola, Bulgaria, Burkina Faso, Cameroon, Côte d’Ivoire, Croatia, Democratic Republic of the Congo, Haiti, Kenya, Lebanon, Mali, Monaco, Mozambique, Namibia, Nigeria, Philippines, South Africa, South Sudan, Syria, Tanzania, Venezuela, Vietnam, and Yemen. Algeria, Angola, Côte d’Ivoire, and Lebanon were added at this Plenary.
It should be noted that Senegal is no longer under increased monitoring and has been removed from the list.
Accountable Institutions (AIs) should ensure that their Risk Management and Compliance Plans (RMCP) are up to date to note these changes, and that their systems flag relevant transactions for investigation.
Extension for Directive to Provide Information (DPI) returns
The FIC extended the deadline for submission of the DPI returns for 2024 (DPI 2024). The return will again be made available for online completion and submission on the FSCA’s website from 4 November 2024 to 29 November 2024.
The communication notes that completion and submission of the DPI 2024 is mandatory for all AIs and that failure to submit the DPI 2024 by 29 November 2024 will be a contravention of the FIC Act and may lead to the imposition of administrative penalties by the FSCA.
R7.7 million fine for attorney firm upheld
The FIC Appeal Board dismissed an appeal by an attorney firm, Kunene Ramapala Incorporated.
Following an inspection in June 2023, it was found that the firm had not complied with FIC Act requirements to document, maintain, and implement an RMCP, and to scrutinise clients against the targeted financial sanctions (TFS) list. In addition, the firm had not updated its details on the goAML system, had shared its login details, and had not complied with Directive 6 (i.e. filing its risk and compliance return (RCR)).
The penalty was made up as follows:
- Failure to document, maintain, and implement an RMCP – R3 800 000;
- Failure to scrutinise clients against the TFS list – R3 922 000;
- Failure to comply with Directive 6 of 2023 by not timeously submitting its RCR – R50 000; and
- Failure to comply with FIC Directives 1, 2, and 4 in that the institution’s details were not updated on the goAML system and that the institution had shared its login credentials – R20 000.
The grounds of appeal were limited to the financial penalties arguing that the penalties were excessively harsh and punitive. The Appeal Board found that the firm was aware of its compliance obligations, that it had acted with gross negligence and wilfully failed to comply with its obligations under the FIC Act, and that the penalty issued was in line with the FIC sanctioning guidelines.
PRUDENTIAL AUTHORITY (PA)
Revision to Form BA700
The PA released a proposed Directive informing banks of its intention to revise Form BA700 which provides information on risk-based capital requirements.
The proposed Directive includes proposed revisions to the BA700 form to ensure that the revised form correctly captures the provisions of the amended regulations. The PA is comfortable that sufficient consultation has been conducted and that the Directive can become effective from 1 July 2025.
DEPARTMENT OF TRADE, INDUSTRY, AND COMPETITION (DTIC)
Consumer Protection Act
A draft amendment to the Consumer Protection Act was introduced during October. The amendments aim to empower consumers when interacting with direct marketing companies.
The draft tables an opt-out registry for consumers that do not want to be contacted. It will require consumers to complete the form annually to remain on the list. In addition, the amendment creates a requirement for direct marketers to register with the DTIC. The registration is a simple form involving the provision of contact details.
OMBUDS
Re-appointment of FAIS Ombud
The Minister of Finance, Enoch Godongwana, has re-appointed Advocate John Simpson as the Ombud for Financial Services Providers – known as the FAIS Ombud.
SOUTH AFRICAN REVENUE SERVICE (SARS)
The last release of information regarding withdrawals under the two-pot system showed that withdrawals have now exceeded R35 billion.
SARS notes that it has received an unprecedented number of tax directive applications in this regard – clearly the projections were incorrect, but SARS’ balance sheet will look very good next year!
A-PROOFED
Your business deserves a style guide – here’s why
Clear, consistent, and professional communication is essential in the South African financial services industry. Whether you’re popping off a quick email or drafting a formal letter, every piece of correspondence represents your company’s reputation and credibility. A company style guide is a useful tool to ensure that communication reflects professionalism, builds trust, and maintains compliance with industry and FAIS regulations. Imagine how much happier Bryan would be!
Professionalism is at the core of every interaction in your industry. Clients rely on your expertise to guide them through complex products and policies, and even small mistakes – like typos or inconsistent formatting – can undermine their confidence in your services. A style guide establishes clear standards for language, tone, and formatting, ensuring that everything your company sends out reflects a high level of care and attention to detail.
The technical nature of the industry means that industry-specific language is unavoidable. A style guide standardises how this terminology is used, making complex concepts more accessible to clients. For instance, it might clarify whether terms like sum insured should be capitalised, or outline the preferred phrasing for commonly-used expressions. By presenting information consistently, you minimise misunderstandings and help clients feel more informed and secure.
In addition to improving clarity and compliance, a style guide saves time and reduces errors. Without it, employees can spend unnecessary time deciding on formatting, tone, or even how to address recipients. A well-designed style guide eliminates this guesswork by providing clear guidelines and templates for common types of correspondence.
A style guide is essential for training new employees, providing clear communication and operational standards. It reduces onboarding time with examples and templates, helps produce high-quality work, minimises errors in interactions, and outlines preferred methods for common tasks like responding to queries, writing policies, or drafting marketing content.
The consistency a style guide brings to your company’s communications also enhances your brand identity. Clients begin to associate your business with professionalism and reliability when every email and letter reflects the same high standard. Over time, this consistency reinforces trust, which is so important in the insurance industry.
Developing a style guide may seem like a daunting task, but the benefits far outweigh the effort. It starts with identifying your company’s communication needs and setting clear rules for tone, formatting, and terminology. Tailoring it to your business – and what is required in terms of industry standards – ensures that it also addresses compliance requirements and technical language.
A style guide is more than a document; it’s an investment in your company’s reputation, efficiency, and compliance. By adopting one, you not only streamline communication but also strengthen your position in a competitive market where trust and precision are everything.
Clear, consistent communication doesn’t happen by chance. It requires careful planning and expertise. As a professional proofreader with experience in the South African insurance industry, I understand the unique challenges your company faces when it comes to maintaining a professional tone. I can help you develop a tailored style guide that ensures that your team communicates with clarity, consistency, and confidence. Contact me so that I can help you create a style guide that enhances your brand and keeps your communication error-free.
kim@a-proofed.co.za | 083 657 3377
