The Financial Sector Conduct Authority has again extended the exemption from the prescribed minimum visit and reporting intervals for compliance officers.
FAIS Notice 119 of 2017 exempted, until the end of December 2019, compliance officers from the minimum intervals for visits and reports prescribed in section 4(4) of Board Notice 127 of 2010, “Qualifications, experience, and criteria for approval as compliance officer”.
The exemption allows compliance officers to determine the frequency of visits and reporting based on the risk profile and circumstances of each FSP, rather than complying with the fixed minimum visit intervals prescribed in the Notice on Compliance Officers.
The Authority subsequently extended the exemption three times, and the extension granted in December 2023 had an expiry date of 30 June 2026.
In terms of FAIS Notice 40 of 2026, published on 30 June, the exemption will continue until 30 June 2029.
The exemption remains subject to a compliance officer’s adhering to the conditions set out in paragraph 2 of Notice 119 of 2017.
The conditions include:
- A compliance officer must conduct “sufficient” visits to an FSP’s business premises. The frequency and number of visits must be determined by considering:
- the nature, scale, and complexity of the provider’s business;
- the nature and range of financial services, activities, and ancillary services offered;
- the FSP’s compliance risks, having regard to the financial services, activities, and ancillary services offered, the types of financial products in respect of which the services are rendered, and the market in which the FSP operates;
- the availability and adequacy of off-site monitoring tools; and
- off-site access to data from the business premises, business units and/or branches of the provider.
- A compliance officer must implement a monitoring programme that covers all areas of the provider’s financial services, activities, and relevant ancillary services, to ensure that compliance risks and changes to those risks are comprehensively monitored.
- The compliance officer must review the monitoring programme regularly, as well as on an ad-hoc basis when necessary, to ensure that emerging risks are taken into consideration.
- The compliance officer must “regularly” report to the provider on at least the following:
- adequacy and effectiveness of the overall control environment for financial services and activities, including systems, policies, controls and procedures;
- the risks and deficiencies that have been identified; and
- the remedies undertaken or to be undertaken.
- The compliance officer must inform the provider to whom compliance services are rendered of the applicability of this exemption to those services.
A compliance officer who fails to adhere to any of the conditions will lose the exemption.
