Secondary

Compliance

Exemption for Compliance Officers

FAIS Notice 119, published on 13 September 2017, contains details of changes to the minimum prescribed intervals of visits and reports by compliance officers as contained in Section 4(4) of the Notice on Compliance Officers. These changes are as a result of feedback from the industry in response to an invitation by the Regulator.

In essence, the exemption places the onus for determining the number of branch visits and reports on the compliance officer, who has to have due regard for a FSP’s specific circumstances which include:

  1. the nature, scale and complexity of the provider’s business and nature and range of financial services, activities and ancillary services offered;
  2. compliance risks of the provider having regard to the financial services, activities and ancillary services offered, as well as the types of financial products in respect of which the services are rendered and the market in which it operates;
  3. availability and adequacy of off-site monitoring tools; and
  4. off-site access to data from the business premises, business units and/or branches of the provider;

The CO is also obliged to establish and implement a monitoring programme that takes into consideration all areas of the provider’s financial services, activities and any relevant ancillary services to ensure that compliance risks and changes to those risks are comprehensively monitored;

The CO should also review the monitoring programme on a regular basis, as well as ad-hoc when necessary, to ensure that emerging risks are taken into consideration and, on a regular basis, report to the provider on at least the following:

  1. adequacy and effectiveness of the overall control environment for financial services and activities, including systems, policies, controls and procedures;
  2. the risks and deficiencies that have been identified; and
  3. the remedies undertaken or to be undertaken.

Finally, the CO must inform the provider to whom the compliance officer renders compliance services of the applicability of this exemption to such services.

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Please click here to download FAIS Notice 119 of 2017.

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