Penalties for late submissions

The FSB’s FAIS Newsletter 16 was published on 13 December 2013.

The second article states that a decision was taken to implement punitive measures available to the Regulator when FSPs fail to submit financial statements and/or compliance reports by the deadline dates. A penalty of up to R1 000 per day may be imposed.

The relevant regulation states:

  1. A person who fails to furnish the Registrar with a return, information or document, as provided by this act, within the period specified or any extension thereof, is, irrespective of any criminal proceedings instituted against the person under this Act, but subject to paragraph (b), liable to a penalty not exceeding R1000 or any greater amount prescribed, for every day during which the failure continues, unless the Registrar, on good cause shown, waives the penalty or any part thereof.
  2. The penalty may be imposed by the Registrar by notice to the person concerned, and such imposition must be preceded by a procedure giving such person a reasonable opportunity to be heard, and takes effect on a date specified in such notice which may be a date prior to the date of the notice.

A few years ago, letters of demand were issued to those who, according to the FSB’s records, did not comply with the requirements. Although the penalty imposed was “only” R100 per day, the amounts involved were quite hefty, and led to a huge outcry from the industry, particularly from those who were of the view that they were not guilty.

The FSB’s systems are a lot more jacked-up today, and FSP’s should ensure that they meet the deadlines. On-line submission is the preferred route, and also provides proof of compliance in case of a dispute.

The article further states:

  • No extensions will be considered or granted on the submission of the annual compliance reports;
  • In terms of section 4(1) of the FAIS Act, FSPs may apply in writing to the Registrar for an extension to the period in which they must submit their financial statements. An application for extension must be fully motivated as to why the extension is required.

Please click here for a copy of the relevant newsletter.

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