As South Africa prepares for the change of seasons (everyone loves autumn…), intermittent loadshedding (not so much love here), and an incremental VAT increase (depends on where you sit), it’s important to remind ourselves that the only guarantee is change. Let’s embrace change and go with it as the regulatory changes start to flow.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)
Warnings
As has now become the norm, we mention another list of warnings issued by the FSCA. The first is a warning about persons impersonating RCS Cards (Pty) Ltd and Bridge Finance CC. The impersonators are using the details of Bridge Finance and RCS on loan application forms.
Next is a warning about an individual impersonating BCS Markets SA (Pty) Ltd trading as Brokstock. An individual named Jennefer McDonald is impersonating the Brokstock brand to defraud unsuspecting financial customers on Facebook.
Another warning was issued about persons impersonating Goldsure Financial Consultants (Pty) Ltd on Facebook. As usual, the return on investment is impossible.
In an issue that has been brewing for some time, the FSCA issued a warning to the public regarding Ubomi Unlimited Projects (Pty) Ltd t/a Ubomi Fire Protection Insurance. The FSCA notes that it received a complaint that Ubomi Fire Protection may be issuing insurance policies which are possibly not underwritten by an authorised short-term insurer.
Banking sector complaints management review report
The FSCA has published the findings of a thematic review conducted across the banking sector.
The key findings include:
- Inconsistencies in the categorisation of complaints resulting in inaccurate reporting.
- Deficiencies in record-keeping impacting effective oversight and decision-making.
- Failure to keep complainants informed, and a lack of transparency in decisions.
- Limited disclosure regarding the availability of ombuds’ redress mechanisms, reducing the ability of complainants to pursue alternative recourse options.
The percentages that give rise to the findings are significant, and it would be prudent for banks to upgrade their complaints handling procedures prior to the authorities issuing Directives on the matter.
Enforceable Undertaking on A2X (Pty) Ltd
The FSCA conducted a two-year-long investigation into the A2X exchange following a complaint regarding the admission process utilising an “opt-out” process.
A2X initiated an admission process of issuers by sending them correspondence; the issuer was then required, within a specified period, to either accept or decline the inclusion of its securities on A2X’s list of securities. Where an issuer failed to respond to A2X’s request to accept or decline to have its securities listed on A2X, A2X proceeded to list the securities of that issuer on the date specified in the “opt-out” letter.
A2X was given a list of actions to undertake – including obtaining agreement from the affected issuers – and was fined R700,000.
FINANCIAL INTELLIGENCE CENTRE (FIC)
Risk Management and Compliance Programme submissions
We can scarcely believe that the FIC had not thought of it before, but it has finally requested that accountable institutions (AIs) provide copies of their RMCPs.
A further document describing the method of submission was released. Submissions needed to be made through the goAML portal by 12 March 2025.
Before you panic, the entities affected were legal practitioners, trust and company service providers, estate agents, credit providers, SA Postbank, high-value goods dealers, SA Mint Company (RF) (Pty) Ltd, and crypto asset service providers.
Two days before the deadline, the FIC noted the poor submission rates, and sent out a mail to note the unusually high volume of requests for assistance to log in to the goAML portal. It looks like most people got the message.
It may occur that the FIC requests copies of RMCPs from other categories of AIs in future, so always ensure that your RMCP is up to date.
International Funds Transfer Reports (IFTRs) submission failure protocols
The FIC published draft Directive 3A and draft Public Compliance Communication (PCC) 50A for public consultation.
Draft Directive 3A and draft PCC 50A have been updated to include the IFTR reporting obligation, and apply to all AIs which are required to file a report with the FIC.
In addition, draft Directive 3A provides for the process to be followed should a reporting failure occur or if defective reports are submitted. Draft PCC 50A, read in conjunction with draft Directive 3A, expands on measures to mitigate the loss of intelligence data due to reporting failures and provides guidance on mitigating defective reports.
AIs should make themselves aware of the protocols to be followed and update their RMCPs where necessary.
SOUTH AFRICAN RESERVE BANK (SARB)
Credit risk threshold amendment
The SARB released a draft Directive to amend the threshold amounts to be used by banks when implementing the requirements of the revised standardised approach and internal ratings-based approaches for credit risk.
The proposed Directive is intended to replace Directive 1 of 2016 (dated 12 April 2016) and withdraw Directive 8 of 2023 (dated 28 September 2023).
PRUDENTIAL AUTHORITY (PA)
Administrative sanctions
The PA imposed administrative sanctions on three financial institutions in March.
A suspended penalty of R1,65 million was imposed on Professional Provident Society Insurance Company Limited for granting intercompany loans without the necessary approvals.
Imvelo Agricultural Co-operative Financial Institution Limited was fined R1,000 for failing to submit statutory returns and not making itself available to the PA for meetings.
An administrative penalty of R7,64 million was imposed on Escap SOC Limited for:
- Conducting business other than insurance without the approval of the PA as per section 5(4) of the Insurance Act.
- Failure to notify the PA of the outsourcing of a material function as required under section 4.10 of the Prudential Standard GOI 5.
- Failure to have a contract for outsourcing a material business activity as per section 8.1 of Prudential Standard GOI 5.
- Failure to manage and review the outsourcing arrangement as per sections 9.1, 9.2, and 9.3 of the Prudential Standard GOI 5.
- Failure to adopt, implement, and document an effective governance framework in terms of section 30(1)(a) of the Insurance Act by outsourcing a material business activity without the contractual requirements.
- Contravention of section 31(1) of the Insurance Act for failing to have procedures in place to identify any non-compliance with section 30(1) of the Insurance Act (i.e. not noticing the flaws in its governance framework).
- Contravention of section 8.2(f) of the Prudential Standard GOI 2 due to the failure of the board to provide oversight over senior management.
Proposed replacement Directive for Domestic Systemically Important Banks
The PA invited comments from parties in the banking sector regarding proposed plans to implement additional reporting requirements on credit-related statutory returns. This proposed Directive is intended to replace Directive 6 of 2023 released on 28 July 2023 and aims to guide Domestic Systemically Important Banks (D-SIBs) on the BA 200 and BA 210 returns.
Comments can be submitted to SARB-PA@resbank.co.za and RSD-CreditRisk@resbank.co.za by 16 April 2025.
South African insurance sector data
The PA released the consolidated insurance sector data during March.
As of December 2024, the results look quite positive for the insurance component of the financial services sector.
GOVERNANCE
King V Code
South Africa once again is at the forefront of detailing good governance standards for companies and government bodies, and The Institute of Directors has released the draft King V code for comment.
The draft code now encompasses emerging issues such as artificial intelligence, more disclosure regarding climate change, and has been simplified to be more accessible.
Comments on the draft code can be submitted by 4 April 2025.
INFORMATION REGULATOR (IR)
Annual returns
The IR issued a release to the media to remind all public and private bodies to submit their Annual Reports for the year 2024-2025 on access to information requests received and processed.
The submission period will open on 1 April 2025 and close on 30 June 2025. Reports can be submitted via the eservices portal.
If you are an Information Officer or Deputy Information Officer, now is the time to make sure that your login credentials are in place.
COUNCIL FOR MEDICAL SCHEMES
Draft National Health Insurance (NHI) Act fund regulations
The Minister of Health released draft regulations to set up the governance controls of the NHI Fund.
As with so many laws, it says all the right things, but will those involved actually deliver?
Comments are due by 6 June 2025 via regcomments@health.gov.za or here (scroll to the bottom).
A-PROOFED
Have you ever skimmed over a sentence, convinced you knew what it said, only to reread it and realise you were completely wrong? Our brains are remarkable at filling in gaps, autocorrecting mistakes, and seeing what we expect to see rather than what’s actually there.
Now, imagine that happening in a high-stakes compliance document.
Let’s test it. Read the following sentence:
The financial report was reveiwed by the compliance team to ensure it meets all regulatory standrads before being submited.
Did you spot the mistakes? If not, you’re not alone. When we read familiar content, our brains skim and assume accuracy. But those errors – “reveiwed”, “standrads”, and “submited” – would stand out immediately to a fresh pair of eyes.
This phenomenon is called “perceptual filling-in” or “word superiority effect”. Your brain is so familiar with the content that it processes words as a whole rather than letter by letter. Instead of carefully reading each word, your brain predicts what should be there based on context, past exposure, and pattern recognition.
This is why it’s so hard to catch your own mistakes, especially in documents you’ve reviewed multiple times. Your brain essentially autocorrects the errors in your mind, making them invisible to you.
Want to test it? Read this:
It deosn’t mtater in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer are in the rghit palce.
Most people can read that sentence fluently, despite the jumbled letters because the brain fills in the gaps!
In financial services and compliance, precision is non-negotiable. A minor mistake can lead to costly misunderstandings, reputational damage, or even regulatory penalties. But when you’ve spent hours drafting, editing, and revising the same documents, your brain starts to auto-correct errors, making it nearly impossible to spot them yourself.
This is where professional proofreading comes in. It’s not just about checking for typos, it’s about ensuring clarity, consistency, and accuracy in the documents that keep your business compliant.
A single word out of place in a policy document can change its meaning, leading to unintended breaches of compliance. A misplaced comma or an omitted word in a contract could expose your company to legal disputes. Clients and stakeholders expect professionalism, and sloppy documents can undermine confidence in your company’s credibility.
Even internal communications aren’t exempt from scrutiny. A poorly-worded email or report can lead to confusion among employees, or misinterpretation by management, which in turn affects decision-making. Errors in training manuals or procedural documents can result in staff following incorrect guidelines, creating compliance risks that could have been avoided with a simple proofreading step.
Automated spellcheckers and grammar tools can catch some mistakes, but they lack the ability to understand context, tone, and industry-specific terminology. They might not flag an incorrect but plausible word or notice inconsistencies in phrasing across multiple documents. This is why a human proofreader remains an invaluable asset in compliance and financial services.
As a professional proofreader with years of experience in the industry, I specialise in reviewing compliance and financial services documents, ensuring they are clear, accurate, and free from errors. My fresh perspective could be the difference between a flawless document and an expensive oversight.
If you’d like to ensure your compliance materials are not just correct but thoroughly polished, let’s chat.
Kim Hatchuel
083 657 3377 | kim@a-proofed.co.za
www.a-proofed.co.za
