It looks like December was all “fine” in the wrong sense as the FSCA took serious action against entities and individuals. While progress may not always be immediately visible, bringing criminals to book requires methodical and careful work.
THE FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)
FSCA imposes record penalties and debarments on Banxso and key individuals
The FSCA has issued one of its most significant enforcement actions to date, imposing administrative penalties totalling R2 billion on Banxso (Pty) Ltd and two of its directors, along with a further R16 million for additional contraventions. Several key individuals also received personal fines ranging from R5 million to R20 million, accompanied by lengthy debarments of up to 30 years.
The sanctions follow an extensive FSCA investigation which uncovered serious misconduct, including the misappropriation of client funds, misleading communications to clients and the regulator, promises of unrealistic returns, and failures to act in clients’ best interests. The FSCA found material breaches of multiple legislative frameworks, including the Financial Sector Regulation Act, the FAIS Act, the General Code of Conduct, the Protection of Funds Act, Fit and Proper Requirements, and the Financial Markets Act Regulations.
In determining the penalties, the FSCA considered the financial benefit gained through the misconduct and the significant impact on clients and market integrity. Due to the severity of the findings, the matter has been referred to the South African Police Service, with the FSCA committing to assist further where required.
FSCA imposes heavy penalties on Medbond entities for financial misconduct
On a similar note, the FSCA has levied a R197 million administrative penalty on Medbond Insurance Brokers (Pty) Ltd and Jacobus Meyer jointly, with additional R5 million fines each on Medbond Markets (Pty) Ltd, Medbond Fund Managers (Pty) Ltd, and Masjamplan (Pty) Ltd. Meyer has been debarred for 30 years, and Frederick Andries Jacobus van Heerden for four years, barring them from providing financial services or acting as key persons in financial institutions.
Following an investigation, the FSCA found violations including advising clients to invest in a non-existent Group Variable Annuity at Lombard International, misappropriating client funds, and rendering unauthorised intermediary services. The matter has been reported to the South African Police Service for further action.
FSCA revokes Afrimarkets Capital’s financial services licence
The FSCA withdrew the Financial Services Provider (FSP) licence of Afrimarkets Capital (Pty) Ltd. The provisional suspension, initially imposed on 4 July 2025, followed an investigation revealing multiple violations of financial sector laws.
Key findings included misappropriation of client funds, unauthorised provision of financial advice, dissemination of false or misleading information to clients and the FSCA, promises of unrealistic returns, and failure to prioritise clients’ best interests. The FSCA determined that Afrimarkets no longer meets the “fit and proper” requirements for operating as a FSP.
The authority has committed to providing updates to the public on any further developments. Industry stakeholders are advised to review client dealings with Afrimarkets and ensure compliance with regulatory standards to avoid similar enforcement actions.
FSCA imposes penalties on Bhaca Green and Associates for unauthorised financial activities
The FSCA announced regulatory actions against Bhaca Green (Pty) Ltd and individuals Songeziwe Mbalo and Lungile Mgilane following an investigation into unauthorised financial services.
Mbalo was debarred for 20 years, a R9 million administrative penalty was imposed jointly on Mbalo and Bhaca Green, and Mgilane received a R50,000 penalty.
The probe revealed that Mgilane provided financial services on behalf of the unlicensed Bhaca Green and Mbalo. From January 2019 to December 2020, the entities collected investor funds for forex trading but misused most for Ponzi-like payouts and personal expenses.
The FSCA is referring the case to the South African Police Service for further action.
FSCA imposes heavy penalties on Relocations Group and its executive for unlicensed insurance activities
In a significant enforcement move, the FSCA has fined The Relocations Group (Pty) Ltd and its controlling figure, Kyle Bary Tiltman, R12.6 million jointly and severally. Additionally, Tiltman has been debarred for 15 years from involvement in financial products or services, serving as a key person in financial institutions, or providing outsourcing arrangements to such entities.
The action stems from an investigation triggered by client complaints, which uncovered that South African Relocations (Pty) Ltd and its successor, The Relocations Group, unlawfully offered marine insurance policies without proper authorisation. The entities operated as unlicensed insurers and issued policies to the public.
Compounding the violations, Tiltman obstructed the FSCA’s probe by failing to cooperate, breaching requirements for compliance with investigative notices and requests.
Warnings
The FSCA issued a public warning against Oaken Financial Services (Pty) Ltd, Divan Dixon, SMD Capital (Pty) Ltd, Stephen Gregory Hall, and Michael Jacobs. All the parties are linked in some way but are not authorised to provide financial services.
Individuals are purporting to be associated with Old Mutual on a WhatsApp Group called OMIG (Old Mutual Investment Group) and an application called OMIG and are soliciting investments from the public. Old Mutual confirmed that it is not associated with the administrators or the OMIG application.
It has come to the attention of the FSCA that 4XC MetaTrader is using the details of 4xCube Ltd and the name of its employee, Daina Malta, to offer financial services on Telegram. 4xCube Ltd is a foreign entity regulated by the Financial Supervisory Services in the Cook Islands to provide financial services. 4xCube Ltd has confirmed that it is not associated with 4XC MetaTrader and that it and Diana Malta are being impersonated.
FINANCIAL INTELLIGENCE CENTRE
Draft amendments to Anti-Money Laundering (AML) and Combating Terrorism Financing (CTF) laws
The Draft General Laws (AML and CTF) Amendment Bill, 2025 was released on 15 January 2026. It represents a wide-ranging strengthening of South Africa’s AML/CTF framework. The Bill is primarily aimed at addressing outstanding deficiencies identified by the Financial Action Task Force (FATF) during South Africa’s greylisting process, ahead of the country’s next mutual evaluation expected in 2027.
The Bill amends four core statutes: the Nonprofit Organisations Act, 1997 (NPO Act); the Financial Intelligence Centre Act, 2001 (FIC Act); the Companies Act, 2008; and the Financial Sector Regulation Act, 2017 (FSR Act).
The amendments expand regulatory oversight, enhance enforcement powers, and significantly increase information-sharing across the state.
The Bill materially strengthens oversight of NPOs by expanding the powers of the NPO Directorate to monitor and enforce compliance, not merely register organisations, empowering the Director to impose administrative sanctions for non-compliance, introducing a clearer appeal mechanism to an Arbitration Tribunal against refusals to register or administrative sanctions and increasing criminal penalties to a maximum fine of R1 million and/or five years’ imprisonment.
The Bill significantly expands the powers and reach of the FIC, including: allowing the FIC to conduct lifestyle audits to assess whether a person’s lifestyle is consistent with known lawful income, expanding information-sharing to include bodies such as the Public Procurement Office and the Border Management Authority, enabling the FIC to request information and database access from public entities and municipalities, extending the record-keeping period for accountable institutions from five to seven years, strengthening reporting obligations relating to terrorist financing, United Nations sanctions, and High Court orders and broadening statutory protection for institutions and individuals who share information or report in good faith.
Accountable institutions will also be required to more explicitly assess risks arising from new products, delivery mechanisms, and emerging technologies, including fintech and digital platforms.
Important changes are proposed to improve corporate transparency:
- The Companies and Intellectual Property Commission (CIPC) will be empowered to deregister companies that fail to submit securities or beneficial ownership registers for two consecutive years.
- The CIPC may impose administrative fines, potentially up to the greater of 10% of turnover or R10 million.
- Affected companies may apply to the Companies Tribunal to review such fines.
The Bill refines and expands the scope of financial regulation by: clarifying that “financial products and services” include arrangements that have similar outcomes, regardless of technology used, as well as enabling regulators to license financial institutions under the FSR Act, even where other legislation also imposes licensing requirements. The Bill strengthens regulators’ powers to obtain information from significant and beneficial owners and broadens the circumstances under which regulators may initiate investigations.
The Bill signals a clear move towards deeper scrutiny, stronger enforcement, and wider information-sharing across the financial system, corporate sector, and nonprofit space. Insurers, banks, intermediaries, corporates, nonprofit organisations, and fintech firms should expect higher compliance expectations, increased regulatory engagement, more robust enforcement, greater exposure for failures relating to AML/CTF, sanctions compliance, and beneficial ownership reporting.
Although the Bill’s commencement date is awaiting presidential proclamation, affected entities should begin assessing their governance, reporting, and risk frameworks in anticipation of its enactment.
PRUDENTIAL AUTHORITY (PA)
Strengthening South Africa’s financial system: key risk insights for banks and life insurers
The PA has released its latest Sector Risk Assessments for the banking and life insurance sectors, covering the period January 2022 to December 2024. These reports provide a comprehensive view of money laundering (ML), terrorist financing (TF), and proliferation financing (PF) risks, highlighting sector-specific vulnerabilities and control effectiveness.
Banking sector: elevated residual risk
Banks remain the primary gateway for financial flows, making them highly exposed to illicit finance.
- Inherent risks: Large domestic banks face high ML, TF, and PF risks, driven by transaction scale, cross-border connectivity, and complex client structures. Smaller banks and foreign branches show medium to high exposure, particularly in ML and TF channels.
- Residual risks: Despite broadly adequate controls, residual risk remains medium-high for ML and TF, and medium for PF, underscoring persistent vulnerabilities in areas such as beneficial ownership transparency, sanctions screening, and trade finance oversight.
- Emerging threats: Informal remittance systems, crypto-asset activity, and illicit gold trade continue to challenge compliance frameworks.
Life insurance sector: moderate but complex risks
While life insurers exhibit lower systemic exposure than banks, their product features introduce unique risks.
- Inherent risks: The sector is rated medium-high for ML, medium-low for TF, and low for PF. Vulnerabilities stem from investment-linked and cash-value products, third-party premium payments, and non-face-to-face onboarding.
- Residual risks: After controls, ML risk remains medium, with TF and PF risks assessed as medium-low and low, respectively.
- Control gaps: Smaller insurers struggle with governance, risk assessments, and event-triggered due diligence, while larger players show improvement but face challenges in beneficial ownership verification and transaction monitoring.
Common themes across sectors
- Governance and risk management: Both sectors need stronger enterprise-wide risk assessments and consistent application of risk-based approaches.
- Beneficial ownership transparency: Persistent gaps in identifying ultimate controllers increase exposure to ML, TF, and PF.
- Technology risks: Digital onboarding and automation improve efficiency but heighten identity fraud and monitoring challenges.
- Regulatory expectations: Enhanced due diligence for high-risk clients, robust sanctions screening, and timely reporting remain critical priorities.
The PA emphasises risk-based compliance, improved data-driven monitoring, and sector-wide collaboration to address evolving threats. Institutions are urged to invest in advanced analytics, staff training, and governance frameworks to safeguard the integrity of South Africa’s financial system.
NATIONAL TREASURY (NT)
South Africa removed from European Union (EU) High-Risk Jurisdictions List
National Treasury has welcomed the EU’s decision to remove South Africa from its list of “High-Risk Third Country Jurisdictions”, with effect from 29 January 2026. This follows South Africa’s removal from the FATF greylist and the United Kingdom’s high-risk list in October 2025.
South Africa was originally added to the EU list in August 2023 as a direct consequence of its FATF greylisting. Inclusion on the list required EU financial institutions to apply enhanced due diligence to transactions involving South African counterparties, increasing compliance costs, and friction for trade, payments, and investment flows.
The EU has acknowledged that South Africa has strengthened the effectiveness of its AML and CTF regime and addressed the strategic deficiencies identified by the FATF. As a result, EU financial institutions are no longer legally required to apply enhanced due diligence to South Africa-related transactions, although individual institutions may continue to apply their own risk-based assessments.
National Treasury cautioned that the delisting does not imply that all AML/CTF challenges have been resolved. Further work is required to improve the prevention, detection, investigation, and prosecution of financial crime. South Africa will also undergo a new FATF mutual evaluation cycle, with a final report expected in October 2027, and preparations for this process are already underway.
.
A-PROOFED
If you’re reading this, you’ve either got excellent attention to detail or a strong sense of professional obligation.
Either way, you’ve made it to the very bottom of a legislative update, which is no small feat. You’ve just worked your way through pages of dense regulatory material without throwing your laptop across the room, rereading the same sentence five times, or wondering whether a paragraph was secretly written in another language. You may not even have noticed how smoothly it all went. That, inconveniently, is the point.
Good proofreading is spectacularly unremarkable.
Nobody reaches the end of a clean, well-written document and thinks, “Ah yes, outstanding proofreading”. They think, “That was clear”, and move on with their day. Which is why proofreading is often treated like an optional extra rather than the quiet infrastructure holding everything up.
There’s a popular belief that proofreading exists to catch obvious mistakes. The kind you could spot if you were half asleep and mildly annoyed. In reality, those are the easy ones. The real work happens in the sentences that are technically correct but slightly off. The phrasing that sounds fine until it lands badly with a regulator. The paragraph that’s accurate but unclear. The tone that unintentionally suggests more than it should.
None of that jumps out at you while you’re drafting. You’re too close to the content. You know what you mean. Your brain politely fills in the gaps and smooths over the awkward bits. Spellcheck applauds your efforts and sends you on your way.
This is usually the moment someone says, “We don’t need a proofreader. We proofread internally.” Which is a bit like saying you don’t need an editor because you reread your own emails. Possible, yes. Advisable, no.
There’s also the assumption that tools can do this job now. And yes, I’ll say it out loud. I use AI. I use it the same way I use a calculator. Helpful, fast, and completely unconcerned with whether something’s appropriate, precise, or defensible in a regulated environment. AI’s very good at sounding right. It’s less good at being right in the ways that matter.
Which brings us back to this legislative update.
If you didn’t stumble once while reading it, that wasn’t luck. If nothing felt ambiguous, clumsy, or quietly risky, that didn’t happen by accident. If you reached the end without thinking about the writing at all, congratulations. You’ve just experienced proofreading doing exactly what it’s supposed to do.
And if you’re now thinking, “Well, I still don’t need a proofreader”, that’s fine too. Most people only notice the value when something slips through.
Thank you for reading to the bottom. It turns out that even here, words still matter.
083 657 3377 | kim@a-proofed.co.za
www.a-proofed.co.za
