The Registrar of Collective Investment Schemes (“the Registrar”) referred a suspected contravention of Section 65(3) of the Collective Investment Schemes Act, No 45 of 2002 (CISCA) to the enforcement Committee. It was alleged that the FSP solicited investments in an unregistered foreign collective investment scheme.
The Registrar considered the mitigating factors, which included:
- The FSP did not receive remuneration for the introduction of clients to the fund;
- No loss was suffered by investors as a result of the contravention;
- The FSP fully cooperated with the Registrar during the enforcement process;
- The FSP removed the name of the fund on its business premises and ceased to do presentations on the fund;
- Only 5 clients entered the fund due to the FSP’s presentations, and only an amount of approximately R200 000 was invested.
Consequently, the Registrar agreed to a penalty of R10 000 and a contribution to the costs of the Registrar in the amount of R114 000 in settlement of the matter.
A subsequent article in Die Burger states that referral arose after a routine visit by the FSB to the premises of the FSP, where the name of the unregistered scheme was affixed on the premises of the FSP. The latter denied that he promoted the fund, and stated that the only investors he referred to it were family and friends who had approached him.
The article states that the FSB’s view is that the FSP “actively” promoted the scheme by placing a sign board in his office, and involving members of the public.