Alan Holton, an independent compliance practitioner and associate of Moonstone, recently shared the following information regarding amendments to the Financial Services Laws General Amendment Act of 2013.
Financial Services Board Act 1990 and Inspection of Financial Institutions Act 1998
In terms of the amended definition a financial institution in the Financial Services Board Act, 97 of 1990, any person that performs an activity regulated under a law referred to in paragraph (a) or (b) of the definition is now defined as a financial institution. Paragraph (a)(xii) provides that “financial institution” means any authorised financial services provider or representative as defined in section 1 (1) of the Financial Advisory and Intermediary Services Act, 2001. (sic)
Compliance Officers are regulated under the FAIS Act, 2002 and accordingly, in terms of the amendment, are now also financial institutions as defined for purposes of this Act.
In terms of the Inspection of Financial Institutions Act 1998, a “financial institution” means (inter alia) any institution referred to in the definition of “financial institution” in section 1 of the Financial Services Board Act, 1990 (Act No. 97 of 1990).
The upshot of these amendments is that Compliance Officers and Compliance Practices, in their capacity as financial institutions, are now subject to the same FSB inspection and enforcement provisions as their clients.
FAIS Act 37 of 2002
Section 4 of the FAIS Act, 2002 has been amended and the registrar may now by notice direct an authorised financial services provider, representative or compliance officer to furnish the registrar, within a specified period, with specified information or documents required by the registrar for the purposes of the Act.
Previously, notice could be given only to authorised financial services providers or representatives. Section 17(1) has also been amended and any authorised financial services provider with more than one key individual or one or more representatives must appoint one or more compliance officers who now have the added responsibility to oversee the provider’s compliance function. This is in addition to the original duty to monitor compliance with the Act by the provider any representatives.