Failure to submit report leads to R100 000 penalty

The Financial Sector Conduct Authority (FSCA) imposed an administrative penalty of R100 000 on a division of a leading bank for failing to meet a licence condition.

The company was granted a licence to operate as an Over the Counter Derivatives Provider (ODP) on 01 September 2020. One of the licence conditions stipulates that an ODP must submit a report from its independent auditors regarding its systems, processes, procedures and capacity to report all its OTC derivatives transactions to the Authority, within six months of licensing, thereafter annually.

On 01 March 2021, the company failed to comply with this condition.

The FSCA notes that it did make the ODP aware of this requirement in 2019. In the determination of the enforcement action, the FSCA also considered the fact that the ODP did not request any extension to comply with this licence condition.

The company accepted the administrative penalty.

If even the big ones get it wrong, how will smaller FSP’s manage?

FSPs are liable for so many returns and deadlines that it becomes almost impossible to conform by merely operating a standard diary or, worse, relying on memory.

In fact, an FSP is legally required to establish and maintain internal systems and monitoring mechanisms to ensure that all its staff, including Key Individuals and Representatives are competent to perform their functions.

Moonstone’s Fit & Proper Manager allows you to assess on-boarding criteria, track competency profiles and manage your staff members’ CPD training requirements.

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