FICA Exemption

The Financial Intelligence Centre published Public Compliance Communication (PCC) 29 to provide guidance on the application of Exemption 4 of the FIC Act which provides for the reliance by one accountable institution (the secondary accountable institution) on the identification, verification and certain record keeping requirements required by the FIC Act by another accountable institution (the primary accountable institution).

PCC29 should be read with PCC12 which deals with outsourcing of the performance of compliance activities to third parties.

PCC12 provides for the following:

Accountable institutions may utilise the services of a third party to perform activities relating to the establishing and verifying of clients’ identities as well as the collection of required documents to establish and verify the identity of their clients, and for record-keeping purposes as required in terms of the FIC Act and the Regulations to the FIC Act.

However, an accountable institution remains liable for compliance failures associated with and/or caused by such an outsourcing arrangement.

While I was trying to decipher all of the above, a message appeared on the screen: your current session has expired due to an extended period of inactivity.

I was very tempted to respond: the feeling is mutual.

I will ask our compliance division to provide me with a practical example of what this is all about as I find it rather difficult to extract the essence of what it being conveyed from the legalese in which it is wrapped.

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