In FSB Newsletter 12, the regulator expresses concern that the duty of a compliance officer to report real, or suspected irregularities, does not always receive the attention it should.
Section 17(1)(c) of the FAIS Act read together with section 19(4) provides that the compliance officer of an authorised Financial Services Provider (FSP) must inform the Registrar in writing of any irregularity or suspected irregularity in the conduct or the affairs of the authorised FSP concerned, of which the compliance officer became aware in performing functions as compliance officer, and which, in the opinion of the compliance officer, is material. …in many cases the compliance officer utilised the annual compliance report as the platform on which to report irregularities.
The article lists transgressions that are deemed irregularities, and which should be reported forthwith:
- An FSP continuing to conduct business after its authorisation has been refused, suspended or withdrawn, or after the authorisation has been voluntarily lapsed.
- An FSP rendering financial services in respect of a category or product for which the FSP is not authorised, e.g. furnishing advice in respect of shares when the FSP is not licensed to do so.
- Where the accreditation of a FSP with the Council for Medical Schemes lapsed or was suspended and the FSP continues to render financial services in respect of Health Services Benefits.
- An FSP conducting financial services related business with a person rendering financial services, if that person is not authorised/licensed as an FSP or representative to render financial services.
- False or misleading declarations in respect of the fit and proper status of a key individual.
- Non-declaration of an adverse change in a key individual’s status in respect of compliance with the Fit and Proper Requirements in terms of FAIS, e.g. the key individual is sequestrated.
- A person who, in fact, acts as a key individual but is appointed as a director/shareholder to conceal the fact that such person does not meet the fit and proper requirements for a key individual.
- A debarred representative rendering financial services on behalf of the FSP.
- Failure to debar representatives.
Newsletter 12 also contains the latest e-mail addresses for specific enquiries. We advise readers to download and save a copy of these addresses to avoid delays.
P.S. It appears that the FSB’s Circulars are sent to all licensed entities, but not its Newsletters. Please click here to download Newsletter 12. We intend placing the other Newsletters on our website, too, for easy access to readers.