Welcome to 2025! We hope it’s a fruitful year for you and your business endeavours. As South Africa and the rest of the world (well a lot of it) adjusts to the results of their elections, we hope to see industry and businesses thrive.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)
False licence claims
The FSCA issued a warning to the public regarding four individuals falsely claiming to be licensed in terms of FAIS.
It was confirmed that Balla Jeno, Kosir Ziga, Sandus Brunkevics, and Bertolucci Florentin are conducting unauthorised financial services business by using financial services provider (FSP) licence numbers that have been cancelled, lapsed, or rejected. They are using social media platforms to promote investment or trading offers and presenting false credentials to create an impression of legitimacy.
Other than always verifying that entities are licensed, consumers should be dubious when considering investment or trading offers via social media platforms or any unsolicited offers.
Warnings
The FSCA started 2025 by issuing yet more warnings. One involved Johannes Lodewicus Du Plessis who, through his entity JLD Investments CC, allegedly offered to render financial services and promised unrealistic returns of up to 36% per annum to members of the public.
Furthermore, Du Plessis allegedly misrepresented himself as a representative or broker for Sanlam Private Wealth (Pty) Ltd. Sanlam Private Wealth informed the FSCA that Du Plessis is not authorised to act as its representative. The FSCA notes that Du Plessis and JLD Investments are not authorised FSPs.
In another case, Mareo Nel was debarred for 15 years and fined R1 million for offering to trade in forex derivates on behalf of clients while not registered as an FSP.
The public has been warned about trading with Magoda Funeral Parlour (Pty) Ltd as a complaint has been received that Magoda may be issuing insurance policies to members of the public which were possibly not underwritten by an authorised long-term insurer.
Similar warnings were issued about Finworth Direct (Pty) Ltd t/a Finworth Funeral Insurance and Grant Julius Funeral Directors (Pty) Ltd who may be may be issuing insurance policies which were possibly not underwritten by long-term insurers.
The FSCA provided details of another case regarding a Felicitie Jacobs. Jacobs is soliciting funds from members of the public for investment purposes, while promising unrealistic returns (as usual – Ed.). It appears that she may be offering financial services by presenting investment opportunities with guarantees of profit. Jacobs has described herself as “a trader in volatility and synthetic indices” but is not an authorised FSP.
The FSCA cautioned the public when dealing with CMC Markets Investment. CMC Markets Investment may be offering financial services to members of the public without the required authorisation and is using Telegram groups to solicit investment, offering guaranteed and unrealistic returns. Specifically, the entity has been promising returns of up to R448,800 from an initial investment of R48,500 within four days. A similar caution was issued regarding Thabiso Comfort Chepape and Outlaws Holdings (Pty) Ltd who are offering unrealistic returns of R23,000 from an initial investment of R5,000 by offering to trade in forex. The entity is not an authorised FSP, and it is common knowledge that trading cannot guarantee returns.
Investify360 is alleged to be providing unlicensed financial services and offering daily returns of 75%, which is completely unrealistic. Investify360 claims to be regulated by the FSCA despite this not being true.
Similarly, Future Traders solicits funds from the public by offering to trade in crypto currency on their behalf, with the promise of guaranteed and unrealistic returns and claims to be an authorised FSP with FSP number “02543045”. (That would mean them come from nearly one hundred years in the future if we follow the FSCA licence allocation system – Ed.)
It would appear that 4Sight Holdings Limited is being impersonated on Telegram. Individuals are using Telegram groups to solicit funds from members of the public by claiming to be associated with 4Sight Holdings and Tertius Zitzke (4Sight’s chief executive officer). Members of the Telegram groups are promised unrealistic returns of up to R20,000 from an initial investment of R5,000 within 24 hours.
Rand Swiss (Pty) Ltd has been a victim of the same type of impersonation through Telegram, with the impersonators offering the unreasonable return of R16,000 from R2,000 within three days.
Impersonators have even gone so far as to represent themselves as Dartcom SA (Pty) Ltd, which is a communications and energy solutions provider and in no way connected to the provision of crypto trading as the impersonators state on Telegram.
Update on licensed crypto asset service providers
The FSCA confirmed that it has approved 248 crypto licence applications and declined nine. A total of 106 applications were withdrawn by the applicants following engagement between the applicants and the FSCA.
The nine licences were declined as the applicants failed to provide clear and comprehensive business plans and business model descriptions outlining crypto asset activities and key business and operational frameworks to support the activities. Another reason was that key persons failed to demonstrate the requisite knowledge and practical experience pertaining to crypto assets.
False RE certificates
The FSCA notified industry that Mulalo Rakhadani is selling fraudulent Regulatory Exam 5 (RE5) certificates via Facebook.
Moonstone Information Refinery (Pty) Ltd is the only entity authorised to provide Regulatory Examinations. Any person providing potential employers or the FSCA with false RE certificates will no doubt face criminal charges.
FINANCIAL INTELLIGENCE CENTRE (FIC)
Draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill
National Treasury released a draft bill aimed at further enhancing the anti-money laundering and terrorist financing laws in South Africa.
It proposes amendments to the Financial Intelligence Centre Act, 2001; the Financial Sector Regulation Act, 2017; the Companies Act, 2008; and the Nonprofit Organisations Act, 1997.
FIC issues travel rule for crypto asset transactions
The FIC issued Directive 9 related to the travel rule for those accountable institutions engaged in crypto asset transfers.
The “travel rule” is the term used to describe the application of the Financial Action Task Force’s (FATF’s) Recommendation 16 requirements regarding wire transfers or electronic funds transfers of crypto asset transfers.
Transfers and receipts of crypto assets by accountable institutions for or on behalf of their customers must have information provided relative to the transactions and related records must be kept. This information must be made available to appropriate authorities upon request.
The purpose for implementing the travel rule is to help ensure that the transfer or receipt of crypto assets via crypto asset service providers (CASPs) is not used for money laundering, terrorist financing, and proliferation financing purposes. In addition, the travel rule meets international standards for combating money laundering, terrorist financing, and proliferation financing set by the FATF.
The Directive outlines the obligations and information requirements of CASPs involved at the ordering, intermediary, and recipient stage of crypto asset transactions and will come into effect on 30 April 2025.
Guidance on the interpretation of credit providers
The FIC has published the updated draft public compliance communication 23A (PCC 23A) to provide guidance on the interpretation of credit providers as accountable institutions.
Any entity that is (or should be) registered with the National Credit Regulator falls under the definition. Entities taking up a role in this space should do proper research before actively providing services.
Administrative sanctions
The FSCA imposed administrative sanctions on Sunlight Financial Services (Pty) Ltd and Tana Africa Capital Managers (Pty) Ltd in its capacity as the regulatory authority of FSPs.
Both institutions failed to: develop, document, maintain, and implement a risk management and compliance programme (RMCP) for anti-money laundering and counter-terrorist financing; scrutinise client information against the United Nations Security Council Targeted Financial Sanctions Lists; and provide ongoing training to their employees.
Sunlight was fined R600,000, of which R300,000 was conditionally suspended for three years, and Tana was fined R2.9 million, of which R1 million was conditionally suspended for three years.
The FSCA also imposed administrative sanctions on Prime Collective Investment Scheme Management Company (RF) (Pty) Ltd and Wealth Portfolio Managers (Pty) Ltd.
Prime Collective Investment Scheme Management Company is a licensed collective investment scheme manager and Wealth Portfolio Managers is a licensed FSP.
The FSCA found that:
- Although both institutions had developed RMCPs, they were deficient and failed to outline how the institutions would comply with various FIC Act requirements.
- Both institutions failed to conduct the customer due diligence.
- Wealth Portfolio Managers failed to scrutinise client information against the United Nations Security Council Targeted Financial Sanctions Lists.
- Wealth Portfolio Managers’ senior management failed to ensure that the company and its employees complied with the provisions of the FIC Act and the RMCP.
The FSCA imposed administrative sanctions of R1.6 million on Prime Collective Investment Scheme Management Company and R200,000 on Wealth Portfolio Managers respectively. A portion of the sanction imposed on Prime Collective Investment Scheme Management Company, totalling R600,000, was conditionally suspended for three years. Wealth Portfolio Managers also received a caution and a formal reprimand.
These sanctions serve as reminders that accountable institutions must properly implement their RMCPs and conduct targeted financial sanctions screening as well as ensure that annual training is conducted.
In addition, Capitec Bank joined the list of banks the FIC issued fines to. Capitec was fined R56.25 million, of which R10.5 million was conditionally suspended for three years from 30 July 2024.
Capitec’s FICA onboarding processes, Cash Transaction Reporting, Suspicious Transaction Reporting, and RMCP implementation were all found to be deficient.
Consequences of not filing risk and compliance returns
In a media release early in December 2024, the FIC noted the number of businesses that had not submitted the risk and compliance returns as required under Directives 6 and 7.
The FIC also provided the amount of the fines levied. Initially, entities were given an opportunity to complete the return and an admission of guilt slap on the wrist of between R10,000 and R50,000. Entities that completed the returns but did not pay the fine are liable for a further fine, and entities that continue to ignore the request are in line for more serious penalties.
(Money easily saved by appointing a capable compliance team – Ed.)
PRUDENTIAL AUTHORITY (PA)
Operational risk conditions, interpretation, and reporting
The PA released a proposed Directive to adjust the operational risk conditions, interpretation, and completion of form BA 400 (you’ll know what this is if deal with banks).
The proposed Directive was published for comment on 22 April 2024, and as such there is no opportunity to provide further comments. The revised reporting will become effective from 1 July 2025.
Supervisory Guidance for Business Risk Assessment
The PA issued Guidance Note 5 of 2024 to banks.
The comprehensive document sets out the PA’s expectations of banks in terms of the anti-money laundering and terror financing control requirements – no doubt as a consequence of recent findings of non-compliance by banks.
Banks’ auditors and chief executive officers are required to complete and return this document to the PA.
Proposed amendments to form BA 340 for banks
The PA proposed amendments to the Regulations relating to banks when completing and submitting form BA 340, which relates to equity risk in the banking book (ERIBB) exposures and to ensure consistency in terms of ERIBB reporting across banks by providing specific instructions for the completion of the form BA 340.
Comments can be submitted to SARB-PA@resbank.co.za by 31 January 2025.
PA fees
The PA released its schedule of fees to take effect from 1 February 2025.
It should be noted that no material comments were received by the PA.
SOUTH AFRICAN RESERVE BANK (SARB)
Revised calibration calculation
The SARB released Circular 2 of 2024 to replace Directive 3 of 2013. The Circular provides clarity to banks regarding the calibration and reporting of the output floor requirements. As usual, banks’ auditors and chief executive officers are required to confirm receipt.
CORPORATION FOR DEPOSIT INSURANCE (CODI)
Fund liquidity contribution size
The SARB declared the size of the of banks’ fund liquidity contribution on an annual basis as 3% of the total covered deposits held and maintained for the period 1 April 2025 to 31 March 2026.
This percentage is reviewed every December.
CODI handbook
The CODI also released a handbook for banks that outlines the data requirements, structures, formats, and submission channels for banks to submit data to CODI on a monthly, quarterly, and ad hoc basis.
A-PROOFED
Who said that spring cleaning only needs to be done on 1 September? I believe that the new year is the perfect opportunity to give your company documents a makeover. These documents aren’t just a bunch of words on paper; they’re the glue holding your regulatory and professional credibility together. Let’s face it, a sneaky typo or messy page layout can cause chaos faster than you can say “audit”.
Rules change all the time, and what was relevant last year might already be yesterday’s news. Miss an update, and you’re looking at penalties, fines, or a less-than-friendly visit from the regulators. Even small errors in things like insurance policy wordings or financial reports can cost you big time, both in cash and credibility. Why not start the year by giving these documents a thorough once-over and preventing problems before they start?
You’ll agree with me that your documents need to make an impression. Sloppy compliance paperwork can raise eyebrows and plant seeds of doubt. Clients, partners, and regulators expect professionalism, and your documentation is often their first clue about how seriously you take compliance. Clear, accurate documents, on the other hand, make audits smoother, reduce internal confusion, and scream, “We’ve got this!” It’s not just about avoiding disaster; it’s about looking like the pros you are.
Now, let’s talk about the internal side of things. Clear and accurate compliance documents aren’t just for show – they’re a roadmap for your team. Ambiguities, errors, or outdated information can lead to missteps and wasted time, which no business can afford. By starting the year with spotless documents, you’re setting up your team for success and ensuring that everyone is on the same page – literally.
This is where I come in. Proofreading isn’t just about dotting the i’s and crossing the t’s; it’s about understanding the quirks of your industry, the jargon, and those tiny details that make a world of difference. With 20 years of experience under my belt, I’ve seen it all and fixed it all. Whether you’re in insurance, financial services, or another compliance-heavy field, I’ve got the skills to make sure your documents are perfect and error-free.
Drop me a line today, and let’s make sure your documents are as polished as your business deserves.
Kim Hatchuel
kim@a-proofed.co.za
083 657 3377
