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Can a FAIS CO also be a AI’s FIC Compliance Officer? – Clarity on important matter

Draft Public Compliance Communication No. 12A (PCC 12A) that provides guidance on outsourcing of compliance activities to third parties, has raised a few questions. Carolee Reyneke-Minnaar of Moonstone Compliance provides some clarity on one.

PCC states the following with regards to outsourcing of a compliance function:

“7.1. Section 42A of the FIC Act requires that an accountable institution have a compliance function to assist the board of directors or the senior management in discharging their compliance obligations and that a person be assigned with sufficient competence and seniority to ensure the effectiveness of the compliance function.

7.2. Accountable institutions may seek assistance and advice from third-party service providers. However, the compliance function cannot be outsourced. The accountable institution must discharge their obligations in terms of section 42 of the FIC Act.”

Therefore, where the AI has an internal FAIS Compliance officer (“FIC CO”), there is nothing to prevent the FSP from also appointing that same person as the FIC CO to assist the board with their obligations under the FIC Act. The obligations as FIC CO will then be an addition to the employees’ obligations as FAIS Compliance officer (“FAIS CO”).

What the draft PPC 12A is trying to clarify, is that the FIC CO will consequently always be an internal senior person with the necessary knowledge to assist the board. The function cannot be filled by an outside party, such as an external FAIS CO. Assistance may be provided by a third party, but the position of the FIC CO may not be filled by an outside party.

Click here to download draft PCC 12A.

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