Secondary

FAIS-Ombud-Settlements

FSCA fines Product Provider R30 000

– Timely warning to industry about new advertising regulations

Section 106(a) of the Collective Investment Schemes Act No.45 of 2002 states:

No person may make a statement or disseminate information which he or she knows, or ought reasonably to know, is false or misleading or is likely or intended to –

a) Induce other persons to purchase or deal in a participatory interest; or
b) Have the effect of inflating, depressing or maintaining the price of a participatory interest

The Financial Sector Conduct Authority (FSCA) recently imposed an administrative penalty of R30 000 on Prime Collective Investment Schemes Management Company Prime CIS (RF) (Pty) Ltd for contravening section 106(a).

During the period 1 February 2018 to 14 November 2018, when advertising and marketing its financial products on its website 10X made a statement that the Fund earned a 10-year performance return of 11.3% per year. This performance figure was inaccurate and misleading, in that it related to a retirement product offered by 10X. The performance of the Fund since its inception in December 2015 was 4% in the first year and 6.1% in the second year.

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