2025 is winding down, and everyone is starting to focus on the final stretch to December and their holiday plans. The year is not over yet, and we are always given some interesting reading or development by the regulators in the last few months of the year.
We can expect the FIC to be very active this month as it pushes to get South Africa off the ‘grey list’ and a step closer to investment grade. Let’s hope we’ve done enough…
We’re also very proud to note that this September marks Omega Compliance Solutions’ six-year anniversary. It feels like only yesterday and we thank you for joining us.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)
Warnings, impersonations, and general malfeasance
The unfortunate trend of having to warn the public of parties impersonating financial services providers continues:
iFX Brokers Holdings (Pty) Ltd and its CEO, Hannele de Necker, are being impersonated on Telegram and through a website that closely resembles that of iFX. TCEPMA CC is being impersonated to solicit investments illegally from the public.
Two cases involve entities that are not authorised financial service providers (FSPs) soliciting funds from members of the public: Hlalani Rocken Nkuna is using an Instagram profile to do so, as well as to provide trading signals, and Capital40 is offering clients unrealistically high returns on investments.
FSCA proposes levy amendments
National Treasury has issued Government Notice No. 6590, inviting public comment on proposed amendments to several levies.
Most levy components are proposed to increase by 5%, reflecting inflationary and operational cost considerations. The amendments will affect the base and variable levy amounts for various supervised entities, including banks, insurers, exchanges, and FSPs.
The levy for the Ombud Council will increase automatically as a result of these changes.
Stakeholders are encouraged to submit written comments on the proposed amendments within 30 days of publication to: CommentDraftLegislation@treasury.gov.za.
FINANCIAL INTELLIGENCE CENTRE (FIC)
Administrative sanctions
The FSCA imposed administrative sanctions on DSL Solutions (Pty) Ltd and Opes Trust for non-compliance with FICA requirements.
The usual list of shortcomings was cited: Insufficient Risk Management and Compliance Programme (RMCP), Client Due Diligence, Targeted Financial Sanctions, Suspicious Transaction Reporting failures, and no compliance structures in place.
DSL was fined R200,000 and Opes R500,000, of which half was suspended for two years.
Revised Anti-Money Laundering (AML) guidance
The FIC published the Revised Guidance Note 7A (Revised GN 7A), which offers Accountable Institutions guidance on compliance with the Financial Intelligence Centre Act, 2001 (FIC Act).
Revised GN 7A entirely replaces Guidance Note 7A (published 13 February 2025) as well as Guidance Note 7 (published 2 October 2017).
The revised GN brings it in line with the General Law (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act and the FIC’s Public Compliance Communication 59 (PCC 59) which sets out the latest guidance on beneficial ownership.
Essentially, GN 7A is the new reference document for practical anti-money laundering compliance in South Africa. Accountable Institutions should ensure they have aligned their practices to meet with its requirements.
Strengthening AML compliance: Recent FSCA sanctions underscore urgency for intermediaries
The FSCA imposed administrative sanctions on two FSPs for significant failures to comply with the FIC Act. These enforcement actions serve as a stark warning to all Accountable Institutions, particularly intermediaries, to ensure their AML, counter-terrorist financing (CFT), and proliferation financing (PF) controls are not only documented, but also actively implemented and maintained.
Across the inspections, the FSCA found that the sanctioned firms lacked effective RMCPs as required under section 42 of the FIC Act. Specific failures included:
- No documented or implemented ML/TF/PF risk assessment at business or client level;
- RMCPs that omitted core elements such as risk-rating clients, ongoing due diligence processes, and mechanisms for identifying politically exposed or prominent influential persons;
- Failure to establish and verify client identities in line with sections 21 and 22 of the FIC Act with 100% of sampled client files lacking adequate documentation;
- Lack of information on the source of funds (section 21A) and absence of ongoing monitoring (section 21C);
- No screening of clients against targeted financial sanctions lists as required under section 28A; and
- Ineffective governance and compliance functions, with inadequate senior management oversight and insufficient competence or training.
In one matter, the RMCP was only approved two days before the inspection and had not been embedded in day-to-day operations. Remedial directives were either ignored or insufficiently implemented.
Taking into account the severity of the breaches and the importance of AML/CFT compliance to the integrity of the financial sector, the FSCA imposed:
- Financial penalties amounting to R200,000;
- Directives to immediately remediate the deficiencies, including revising RMCPs, conducting risk assessments, risk-rating clients, performing full customer due diligence, and sanctions screening;
- A formal caution and reprimand; and
- Requirements to strengthen governance, including appointing or upskilling compliance officers.
The FSCA has made clear that failure to comply with such directives can result in further enforcement, including civil judgements.
These cases underscore that AML/CFT obligations are not a “tick-box” exercise. The RMCP is the cornerstone of compliance and must be operationalised, not left on paper. Key takeaways for intermediaries include:
- Develop and maintain a robust RMCP: Ensure it covers all section 42(2) requirements, is approved at the highest level and implemented across operations.
- Conduct business and client risk assessments: Risk-rate clients and document the methodology.
- Perform and evidence customer due diligence: Verify identities, understand sources of funds, and ongoing transaction behaviour.
- Screen against sanctions lists: Implement a reliable and auditable process for screening all clients.
- Invest in training and governance: Senior management and compliance officers must be competent, trained, and proactive.
The FSCA views non-compliance with AML/CFT obligations as a serious regulatory breach that undermines the integrity of the financial system. Intermediaries should urgently review their AML frameworks, remediate any gaps, and ensure all policies are not only up to date but effectively implemented.
FIC urges daily checks of goAML message board for compliance updates
The FIC has issued a notice reminding all Accountable Institutions to consult the goAML message board daily. Dated 25 August 2025, the advisory emphasises that this platform is the primary channel for direct communication, including entity-specific operational instructions, regulatory reporting requests, and broader advisories on legislation, guidance, and critical compliance matters.
Institutions are advised to ensure proper registration on goAML, promptly address any outstanding FIC directives, and make daily access a standard business practice to stay compliant.
Feedback on AML/CFT/CPF supervision
The Prudential Authority (PA) has published its first 2025 communication to banks on anti-money laundering, counter-financing of terrorism, and counter-proliferation financing (AML/CFT/CPF) compliance. Covering supervisory activities from April 2022 to March 2024, the PA highlighted recurring deficiencies in areas such as:
- RMCPs: inadequate policies, outdated reviews, and weak client risk scoring.
- Customer Due Diligence: incomplete onboarding records, poor verification of beneficial ownership, and inconsistencies in client data.
- Ongoing/Enhanced Due Diligence: missed reviews, insufficient monitoring of transactional behaviour, and delays in completing enhanced due diligence.
- Regulatory Reporting: weaknesses in cash threshold, suspicious transaction, terrorist property, and international funds transfer reporting.
- Training and Governance: inadequate training material and limited board-level oversight of financial crime risks.
The PA expects banks to address these shortcomings by strengthening their frameworks and improving the effectiveness of their AML/CFT/CPF controls to ensure compliance with the FIC Act.
PRUDENTIAL AUTHORITY (PA)
Proposed levies for 2026/27
The PA has published its draft fees and levies for the 2026/27 financial year (not to be confused with the FSCA levies mentioned above). All categories of supervised entities will see a 3.3% increase compared to 2025/26.
- Banks, insurers, and microinsurers will continue to pay a base levy plus a variable levy linked to liabilities or gross premiums, subject to maximum caps.
- Exchanges and clearing houses will pay quarterly levies based on trade and clearing volumes.
- Specialist entities such as trade repositories, OTC derivative providers, and the Road Accident Fund will pay flat base levies only.
- Reinsurers are levied in line with life or non-life insurers, depending on their business.
Comments can be submitted to PA-Finance@resbank.co.za until 16 October 2025.
South African insurance sector snapshot – June 2025
The PA released updated figures on the performance and financial position of the South African insurance industry for the year to June 2025. The data continues to reflect steady growth in assets, investments, and profitability across most insurer categories.
Key highlights:
- Industry size: 159 registered insurance entities (up from 155 in June 2024). Growth was mainly in microinsurers and captive insurers.
- Balance sheets: Total industry assets rose 13.1% year-on-year to R4.8 trillion, while total liabilities grew 14% to R4.45 trillion.
- Investments: Industry investments increased by 13.5%, with strong growth in corporate bonds (+17.5%), government bonds (+15.8%), and investment funds (+13.8%).
- Profitability: Net profit before tax and dividends jumped 53.4% to R25.2 billion, supported by higher investment income (+114.2%).
- Premiums and claims: Net premiums grew 7% to R179.7 billion, while net claims rose only 2%, helping to improve profitability.
- Policy base: The number of in-force policies rose 8.1% to 55.5 million, although the number of schemes declined by 19.4%.
- Capital adequacy: The industry maintained solid solvency, with the median SCR cover ratio at 1.8 and the MCR cover ratio at 4.3.
Segment performance:
- Life insurers: Stable, with strong asset growth but slightly lower lapse ratios.
- Cell captives: Mixed results; some insurers saw higher expenses and volatility in reserves.
- Non-life insurers: Primary insurers reported steady premium growth and profitability, while some captives improved results after prior losses.
- Reinsurers: Composite reinsurers showed contraction due to restructuring, including the conversion of a major reinsurer to a foreign branch.
Overall outlook:
The sector continues to demonstrate resilience, supported by solid investment performance and improved profitability. Growth in microinsurers highlights ongoing efforts to expand insurance access, while capital adequacy ratios remain healthy across the industry.
Draft Joint Notice on IT and cyber incident reporting
The PA and the FSCA have published a draft Joint Notice under the Financial Sector Regulation Act. The notice sets out the required notification template, submission process, and timelines for financial institutions to report material IT and cyber incidents under Joint Standard 1 of 2023 – IT Governance and Risk Management, and Joint Standard 2 of 2024 – Cybersecurity and Cyber Resilience.
Submissions will be made either through the Umoja Portal (for banks, insurers, and market infrastructures) or via email to the FSCA (for fund managers, FSPs, pension funds, administrators, and credit rating agencies). The new requirements will come into effect once the final notice is issued later in 2025.
Comments can be submitted by 5 October 2025 to PA-Standards@resbank.co.za for the attention of Kalai Naidoo and FSCA.RFDStandards@fsca.co.za for the attention of Andile Mjadu.
INFORMATION REGULATOR (IR)
Correspondence regarding incorrect forms
In typical regulator fashion, the IR sent excessively strongly worded correspondence to all registered Information Officers (IO) and Deputy Information Officers (DIO) to inform them of its displeasure at entities using incorrect forms.
The consternation created caused a small amount of chaos, only to subside as IOs and DIOs came to understand the IR would like to remind them to use Form 2 when handling information requests.
Now, wouldn’t that have been simpler?
A-PROOFED
Spring-clean your documents
September is officially spring, even if South Africa seems to have skipped straight to summer. That doesn’t mean your documents should skip their seasonal spring-cleaning. Commas out of place, confusing sentences, and tiny inconsistencies are like dust bunnies in the professional world. Ignore them and they multiply faster than fans queuing outside Newlands for a Springboks test match.
Working with FSPs has shown me that small details matter. Regulators spot inconsistencies, incomplete forms, and vague wording the same way I notice a sentence that sounds like it was written after a few Castle Lites. One tiny mistake can spark questions, delays, or even fines. Yet in the rush of daily work, these issues are easily overlooked – like a sock hiding behind the washing machine.
I often feel like a spring-cleaning detective. I catch repeated phrases, unclear instructions, and sections that could be unintentionally amusing or confusing. Fixing them isn’t just tidying up. It’s about credibility, clarity, and peace of mind. Polished documents mean colleagues, clients, and regulators understand them immediately. No misinterpretation, no endless back-and-forth.
This September, why not let someone else tackle the mess? I can review your policies, procedures, and reports – correcting errors, clarifying ambiguities, and making sure everything reads smoothly. The result: documents that impress and reduce the risk of red flags at the worst possible time. Think of it as hiring a professional dust-buster for your paperwork.
A fresh pair of trained eyes quickly spots inconsistencies and small errors, turning a scary pile of papers into something that actually works for you. Let me spring-clean your documents so that the rest of your year feels lighter, simpler, and far less stressful. Your future self – and anyone who reads your documents – will thank you.
Let’s talk.
083 657 3377 | kim@a-proofed.co.za
