Note to Subscribers
Please note that the last issue of CompliNEWS for this year will be published on Thursday, 14 December 2023.
The first CompliNEWS of the new year will be issued on Thursday, 11 January 2024.
Breaking news will still be posted on the website during this period.
We wish ...
Legislative Changes and Developments
South Africa to enhance financial market regulations in wake of rand manipulation scandal
South Africa is set to strengthen its financial market regulations following a high-profile case where a leading bank admitted to participating in the manipulation of the rand. The National Treasury announced plans on Friday to introduce legislation next year aimed at expanding oversight of over-the-counter derivatives and foreign currency trading ...
Board Notice 4101 – Proposed amendments to the licence conditions of Strate (Pty) Ltd; other capital markets changes
Under the provisions of section 49(4)(a) of the Financial Markets Act 19 of 2012 ('FMA'), an application has been submitted for the amendment of specific terms and conditions of the clearing house licence granted to Strate Proprietary Limited (Strate).
The current licence condition specifies Strate's main office ...
National Treasury plans legislation to combat state capture and improve governance
The South African National Treasury has announced its intention to introduce draft legislation aimed at tackling the issue of state capture and enhancing governance in key state entities. This move, expected to materialise as early as January, is a direct response to the findings and recommendations of the Zondo Commission ...
Commentary on Legislative Changes and Development
FSCA seeks public feedback on new Conduct Standards for CIS Managers; comments by 16 February 2024; concern over costs
The Financial Sector Conduct Authority (FSCA) has taken a significant step towards enhancing the regulatory framework for Collective Investment Schemes (CIS) in South Africa. In a recent announcement, the FSCA released a series of documents for public consultation, marking a pivotal moment in the country's financial sector reform.
Explaining the draft Conduct Standard for Managers of Collective Investment Schemes; outline of policies required by CIS Managers
The Financial Sector Conduct Authority (FSCA) plans to implement the standard under section 106(1)(a) and (2)(b) of the FSR Act. This section authorises the FSCA to establish conduct standards essential for fulfilling the objectives of the FSR Act and related financial sector laws, including the Collective ...
Businesses desperate to halt NHI Bill
In an unprecedented move, business organisations have written to the presiding officers of the NCOP as well as Deputy President Paul Mashatile – who is the leader of government business – with an urgent appeal to stop the National Health Insurance (NHI) Bill from being passed by Parliament ...
Environmental, Social & Governance
Just Share spotlights banks' decarbonisation failures
Standard Bank has seven directors that have potential conflicts of interest regarding their roles at fossil fuel companies and the bank’s commitment to managing climate risk issues, says Just Share in a new study that spotlights key roles that the South African financial services industry plays in the ...
The urgency of accelerated decarbonisation: A critical role for private sector entities in progress
Businesses are tasked with a significant challenge: integrating decarbonisation into their financial strategies and decision-making processes, according to a report by EY. They face hurdles such as inconsistent government policies. A systematic, evolving framework is essential for managing change and providing effective, large-scale transition support. Incorporating environmental considerations and ensuring ...
UK regulator sets up adviser working group on sustainable disclosure rules
The Financial Conduct Authority in the UK has initiated an intriguing development by forming a working group specifically for financial advisers. This group is designed to assist these professionals in understanding and implementing the new ESG (Environmental, Social and Governance) regulations effectively, reports FT Adviser.
Full FT Adviser report
FCA confirms major measures to boost trust and transparency in sustainable investments, tackling greenwashing
South Africa ranked seventh globally in criminal activity, leads in cocaine trade in Southern Africa
South Africa has been listed among the top ten nations globally for high levels of criminal activity, as per the recent Global Organised Crime Index published by the Global Initiative Against Transnational Organised Crime. In this assessment, South Africa holds the seventh position out of 193 countries, notes The Citizen ...
A deep dive into the world of Company Service Providers and their role in money laundering and terrorist financing
Money laundering, the process of making the proceeds of criminal activities appear legitimate, and terrorist financing, the funding of terrorist activities, are significant global concerns. The Financial Action Task Force (FATF), a key body in setting standards for combating these issues, has updated its recommendations in November 2023, emphasising the ...
FIC opens consultation on draft risk assessment report for Company Service Providers, comments by 7 December 2023
The Financial Intelligence Centre (FIC) has released a draft risk assessment report for company service providers, inviting public consultation. This report focuses on the money laundering and terrorist financing risks prevalent in this sector, particularly since its inclusion in item 2 of Schedule 1 of the Financial Intelligence Centre Act ...
FIC releases Draft Public Compliance Communication 44A for accountable institutions – Adhering to targeted financial sanctions; deadline for comments 11 January 2023
South Africa risks international sanctions with proposed Gazprombank deal for PetroSA gas plant revival
Emerging money laundering trends in the insurance sector
High Court rules on execution pending appeal
Gauteng High Court
Parties: Zero Azania v Caterpillar Financial Services
Date of Judgment: 21 November 2023
Keywords: Civil Procedure, Execution Pending Appeal, Jurisdiction, Court Discretion, Superior Courts Act
Zero Azania (Pty) Ltd, referred to as Azania, failed to comply with instalment payments for six construction vehicles purchased from ...
High Court rules in favour of Samchem Corporation in R16.3m insurance claim against Compass Insurance
Gauteng High Court
In a significant ruling, the Gauteng High Court has ordered Compass Insurance Company Limited to pay Samchem Corporation (Pty) Ltd a sum of R16 311 032,92, along with interest and costs, in a case revolving around indemnity insurance and alleged pre-contractual misrepresentation.
Background of the Case ...
Zinhle Kelly Hadebe v Assupol Life Limited (reconsideration application – debarment of financial services representative)
Financial Services Tribunal ('FST' or 'the Tribunal')
The following matter was handed down by the Financial Services Tribunal on 19 November 2023:
- Zinhle Kelly Hadebe (Applicant) and Assupol Life Limited (Respondent) – (case number: FSP50/2023)
Reconsideration application – Debarment of financial services representative – Procedural and substantive ...
News from the Regulators
FSCA warns public against impostors misusing the MitonOptimal (Pty) Ltd name
The Financial Sector Conduct Authority (FSCA) is issuing a caution to the public about engaging in any financial services activities with a group of individuals who are falsely representing themselves as part of the MitonOptimal (Pty) Ltd brand. These impostors are actively defrauding unsuspecting individuals on the social media platform ...
Regulator hands over medical schemes report
The medical schemes regulator says it has submitted its long-awaited report on cheap, pared-down medical scheme options to Health Minister Joe Phaahla, notes Business Day. The Council for Medical Schemes (CMS) has since 2015 overseen the development of a low-cost benefit option (LCBO) framework that will allow schemes to offer ...
Important notice – Compliance requirements and sanctions for accountable institutions under Directive 7; submission deadline 1 December 2023
The Financial Intelligence Centre (FIC) has issued a critical reminder to certain accountable institutions regarding compliance with Directive 7, under the Financial Intelligence Centre Act 38 of 2001 ('FiC Act'). This directive, released on 31 March 2023, mandates specific institutions listed in Schedule 1 of the FIC Act – including ...
National Treasury flags financial misconduct concerns relating to the trading of the Rands/US Dollars currency pair by Standard Chartered Bank
National Treasury unveils 'An Inclusive Financial Sector for All' policy framework, endorsed by Cabinet
Consequences for Standard Chartered Bank
‘The settlement agreement reached by Standard Chartered Bank and the Competition Commission is an important mantelpiece in dealing with the currency manipulation case.’ However, Dr Tinashe Kondo and Dr Precious Ndlovu, from the University of the Western Cape’s law department, note only once the settlement agreement has ...
Will offshore investment limit governed by Regulation 28 of the Pension Funds Act increase from 45% to 100%?
Key figures in the South African asset management industry discussed significant challenges and strategies during an Inn8 Invest webinar. Cheree Dyers, CEO of Prescient Investment Management, anticipates that the offshore investment limit governed by Regulation 28 of the Pension Funds Act might increase from 45% to 100%. CityWire reports that ...
Fresh attempts to force 3Sixty Life into liquidation
Khandani Msibi, the CEO of the investment arm of the National Union of Metalworkers of SA (Numsa), has embarked on a new strategy to force the end of the curatorship of 3Sixty Life, the underwriter owned by Numsa Investment Company's Doves Group Holdings (DGH), reports Fin24. Msibi ...
Johannesburg Stock Exchange revamps listing requirements to revitalise market
High Courts criticise B-BBEE Commission for non-compliance with regulation 15(4)
Post-black Friday – Ensuring your new purchases are properly insured – FAIS Ombud
Ithala unsuccessful in bid to avoid PA conditions
UK's FCA imposes ban on Nigel Lewis and Susan Jones for misguiding British Steel Pension Scheme clients
The UK's Financial Conduct Authority (FCA) has recently imposed a ban on Nigel Lewis and Susan Jones, previously associated with West Wales Financial Services Limited (WWFS, currently in liquidation), from providing any pension transfer or opt-out advice. Additionally, Mr Lewis is prohibited from holding senior management roles in any ...
FCA proposes new rules for personal investment firms to ensure 'polluter pays' for consumer compensation
On Wednesday, the Financial Conduct Authority (FCA) in the UK announced significant proposals aimed at enhancing the accountability of personal investment firms, often known as investment advisers. These proposals mandate that these firms set aside sufficient capital to cover compensation costs for any harm caused to consumers, effectively ensuring that ...
Leveraging culture and conduct for organisational strength: Insights from Emily Shepperd's FCA speech from the UK
At the recent City & Financial's Culture and Conduct Forum, Emily Shepperd, the Chief Operating Officer and Executive Director of Authorisations at the UK's FCA, delivered a compelling speech on the pivotal role of culture and conduct in enhancing organisational power. Her insights are particularly relevant for South ...
Financial planning trends: Embracing technology while valuing human skills
Dante de Gori, CEO of the Financial Planning Standards Board (FPSB), highlighted the significant impact of technology and AI on the financial planning profession during the 2023 Financial Planning Institute of Southern Africa’s (FPI) Convention. Despite technological advancements, he emphasised that human financial planners will remain essential.
Key points from ...
National Treasury introduces legislation to strengthen financial market regulation in response to currency manipulation allegations
The National Treasury has announced the introduction of new legislation aimed at strengthening the regulation of South Africa's financial markets, with a particular focus on the over-the-counter (OTC) markets. This move is in response to prevent unfair market practices, as highlighted during a parliamentary hearing into the Competition Commission ...
Shifting priorities in compliance – Regulatory policies now top concern, surpassing resource support – international survey
Embracing a growth mindset
By Lee Rossini
In the personal and professional development space, psychologist and academic Carol Dweck has written extensively about the power of mindset in her groundbreaking book Mindset: The New Psychology of Success. The book delves into the transformative idea that our beliefs about our abilities fundamentally shape our lives ...
South African government to reward whistle-blowers in anti-corruption efforts
Public Service and Administration Minister Noxolo Kiviet has announced a new initiative by the South African government to offer incentives to whistle-blowers who report corruption, reports The Mercury. This announcement, made during a session of answering oral questions in the National Assembly, highlights the government's increasing efforts in combating ...
Challenges and prospects in digital asset regulation and adoption in 2023 and into 2024
Current State of EU Regulation and Crypto Adoption
The EU is set to introduce the MiCA (Markets in Crypto Assets) framework in 2024, aiming to integrate crypto more closely with traditional finance.
MiCA will standardise regulations across the EU, covering aspects like marketing, user verification, and stablecoins, simplifying the ...
Binance CEO pleads guilty to money laundering
Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, agreed to resign from the company and plead guilty to money laundering this week. A report in The Guardian notes that as part of a guilty plea, Zhao agreed to pay a $50m fine and would be barred from any ...
FSCA sets 30 November 2023 deadline for crypto asset service providers to comply with new financial product regulations
On 19 October 2022, the Financial Services Conduct Authority (FSCA) issued a significant Declaration under the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act), categorising crypto assets as 'financial products'. This Declaration characterises a 'crypto asset' as a digitally represented value, not issued by a central bank ...
GDPR enforcement tracker – Some recent cases
The Spanish Data Protection Authority (DPA) has levied a fine of EUR 72 000 against Eurocollege Oxford English Institute S.L. for a data protection violation. The issue arose when an individual, who had signed a training contract with Centro De Estudios Aeronauticos, S.L. (CEAE), an affiliate of ...
Vuyo Ntoi appointed as new chairperson of Savca board
The Southern African Venture Capital and Private Equity Association (Savca) has announced the appointment of Vuyo Ntoi as its new chairperson, effective from 15 November 2023. This decision follows a majority vote by the board of directors, reports CityWire. Ntoi succeeds Ata Capital CEO Lelo Rantloane, who completed his three-year ...