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finance-laws

Enforcement Orders – Failure to comply proves very costly

The FSCA has an ongoing responsibility to take appropriate remedial and enforcement action where a financial institution has failed to comply with the law. A few of the latest enforcement orders issued by the FSCA make it very clear that transgressing the financial sector laws can be a costly mistake.

Malvern Trading CC t/a Malvern Guarantees

Marlvern Trading CC, a registered credit provider under the NCR, has been found guilty of issuing guarantee policies to a number of contractors between the period of April 2015 until October 2017. Guarantee policies constitute short-term insurance policies as per the Short-term Insurance Act (STIA). As a result of Malvern not being authorised under the STIA, or any other legislation administered by the FSCA, a penalty of R25 million has been imposed to be paid within 3 months of the order. The sole member of the CC has furthermore also been debarred.

GKF Finance (Pty) Ltd

In a similar case, GKF Finance (Pty) Ltd was found guilty of issuing guarantee policies to a number of contractors and not being authorised. A penalty of R5 million was imposed, to be paid within 3 months of the order. The two listed directors, Ms. Masiu and Mr. Mutangadula, were debarred for a period of 10 years.

Download the Malvern and GKF cases for more information.

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