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In 2022, the Financial Sector Conduct Authority (FSCA) published the Discussion Paper on a Framework for Unclaimed Financial Assets in South Africa (the Discussion Paper) and invited public comment on it. This legal note summarises the comments received, sets out the FSCA’s response to key themes and outlines the FSCA’s next steps for advancing the recommendations outlined in the Discussion Paper.

This legal note is a continuation of the MAY 2024 legal note, which continues the feedback received from respondents regarding the 13 recommendations outlined in the Discussion Paper is summarised. These recommendations are grouped according to the following themes and are not discussed in a sequential order.

Recommendation 1: Assets to be included within the scope

The FSCA recommend a holistic and consistent approach to the treatment to unclaimed financial assets. They proposed that the following financial products and financial instruments be incorporated into the suggested Unclaimed Assets Framework:

  • Retirement fund benefits

  • Bank deposits, irrespective the term and including foreign currency deposits

  • Participatory interests in CIS

  • Life and Non-Life Insurance policies

  • Securities

  • Any investment, return, income, dividend or other proceeds in respect of or derived from the financial products listed above that are payable or due to customers or their beneficiaries by financial institutions, including assets held by central securities depository participants (CSDPs). Consideration to be given for crypto assets to be included in the framework’s scope so as to align with the stated objective. The FSCA will engage with stakeholders in this regard.

Not all potential pools of unclaimed assets are included in its scope. There were also proposals to include unclaimed assets within stokvels, medical schemes and trusts with no identifiable beneficiaries.

Respondents are of the view that assets such as pension funds, insurance and investments should be excluded as those assets are governed under their own legislative and industry frameworks. It was argued that unclaimed benefit preservation funds should be excluded from the proposed framework as provision for treatment of these assets has already been made through the establishment of these funds

Recommendation 6: Reporting by financial institutions should be standardised in terms of regularity and form

The FSCA proposed that all financial institutions maintain records of dormant accounts and unclaimed assets. Additionally, financial institutions should document their efforts in tracing and verifying beneficial owners, along with the effectiveness of these efforts. These records should be routinely submitted to the FSCA in a prescribed format for monitoring purposes.

Additionally, it was proposed that financial institutions be required to retain records of the unclaimed assets transferred to the Central Fund and that they be responsible for validating claims. The FSCA asked financial services providers whether it would assist them if the information that they must report on is included in the conduct of business returns (CBRs). There were differing opinions among institutions.

Some respondents raised concerns about the frequency of reporting. While the CBR is proposed to be facilitated quarterly, institutions suggested that reporting on unclaimed assets might require less frequency, possibly annual reporting.

Most respondents said that should unclaimed assets be transferred to the Central Fund; the latter should be responsible for validating claims. Financial institutions cannot be expected to remain responsible for records, claims validation and costs associated with the aforementioned, once the institution has no remaining interest. The estimated costs to validate a claim can vary significantly depending on the nature of the claim, complexity of the case, and specific requirements.

Recommendation 7: Establish a centralised database to assist in the tracing of persons in respect of all industry segments across the financial sector

The FSCA proposed that financial institutions populate a central database with information as prescribed by the FSCA and that this database informs the FSCA’s unclaimed retirement benefit search engine.

Respondents support extending the central database to cover all financial products within the scope of the Discussion Paper. Many respondents highlighted the importance of compliance with the POPI Act, obtaining customer consent, and ensuring the privacy and security of the data. Respondents also proposed enriching the central database by sourcing data from other entities such as SARS, the Department of Home Affairs and Credit Bureaus.

Recommendation 8: Identify a minimum threshold for unclaimed assets below which a financial customer will not be actively traced

In terms of this recommendation, the FSCA proposed that when a financial institution confirms an asset as unclaimed and the value falls below a specified threshold (initially proposed at R1 000 for retirement funds older than 20 years and R100 for other assets), it should be immediately categorised as ‘untraceable’ and transferred into the Central Fund. Though active tracing will not be undertaken for these assets, they must remain in the database, allowing owners or beneficiaries to claim them indefinitely.

Respondents supported the concept of a de minimis value, where assets below a certain value-threshold would not require extensive tracing. There were also suggestions for different thresholds to be applied to different types of financial products and sub-categories.

Recommendation 9 & 10: Prioritise the tracing of members of high impact retirement fund and product providers

The FSCA recommended that the tracing of beneficiaries by retirement funds with a high concentration of unclaimed benefits be more closely monitored. In the first phase, it was proposed that funds with more than R500 million total unclaimed assets, or funds with average unclaimed assets per beneficiary exceeding R45 000, be prioritised.

Respondents expressed support for the proposed approach of prioritising high-impact funds in addressing unclaimed benefits. However, there were different opinions on setting thresholds for high-impact funds. Respondents further suggested that factors like the age and complexity of unclaimed assets in older funds should be considered. They proposed an age analysis of the assets. Respondents also noted that other than the retirement fund sector that has the highest level of unclaimed assets, specific financial product categories (including credit life policies, retirement annuities, preservation funds, retail transactional banking, unclaimed dividends, and underwritten life policies) may also have high numbers of unclaimed assets.

Recommendation 12: Coordinated consumer awareness campaigns

The FSCA suggested shared responsibility between financial customers and institutions to maintain updated contact information and proposed an ongoing awareness campaign, in collaboration with financial institutions and employers, to emphasise the importance of keeping personal information current and the consequences of failing to do so.

Respondents agreed that it is of critical importance to create awareness and educate the public about unclaimed assets.

The following are some of the suggestions on how best to create public awareness:

  • A central database of unclaimed assets that is easily accessible to the public.

  • Mainstream and social media platforms can be used to reach a wide range of customers.

  • Awareness messages should be integrated into various communication channels, such as brochures, marketing materials, application forms, sales scripts (point-of-sale), bi-annual re-minders, ad-hoc training materials, and minimum standards for member communication.

  • Financial product education should be included in school curriculums, particularly in life orientation subjects.

  • Collaboration with industry bodies and supervisory authorities:

  • Coordinated awareness strategies and campaigns between industry and government to improve consumer understanding and awareness of unclaimed assets.

Recommendation 13: Regulation of tracing agents

The FSCA recommended that steps be taken to regulate the activities of tracing agents seeing that concerns have arisen due to certain practices. Tracing agents are currently not regulated, which may potentially pose risks for consumers.

Most respondents were in favour of regulating tracing agents, but raised concerns about the potential increase in compliance costs that may result from such regulation. Most respondents were of the view that the FSCA should be responsible for regulating tracing agents. Respondents had divergent views on the regulation of tracing fees with some promoting regulation – including providing for maximum caps – and others arguing against it.


The FSCA’s proposed approach and immediate next steps for progressing the work on unclaimed financial assets, are set out below:

Establishment of a central unclaimed assets fund

The transfer of unclaimed assets to a central fund and/or the NRF presents various complexities, especially with regards to the liquidation of non-cash assets, customers’ legal and contractual rights, limited restitution and tax neutrality. As the authority to establish a central unclaimed assets fund and transfer unclaimed assets into such a fund lies with the National Treasury, the FSCA will continue to support the National Treasury in its decision-making process, by investigating and assessing solutions.

As identification and monitoring of unclaimed benefits is materially more advanced in the retirement funds industry than in the rest of the financial sector, the establishment of a central fund for retirement fund benefits (as proposed by the National Treasury) can progress. The general lack of reliable data regarding the value of unclaimed assets and the number of affected beneficial owners, as well as the absence of age analyses of unclaimed assets, creates system design and implementation challenges.

Alternative proposals

Respondents proposed various alternatives to creating a central fund. Deferring a final decision on the establishment of a central fund will enable further consideration and assessment of the feasibility of the alternatives proposed by respondents. Transfer of central unclaimed retirement benefit fund from the Pension Funds Act to the Financial Sector Regulation Act.

The FSCA intends to proceed with the recommendation to transfer the establishment of the central unclaimed retirement benefit fund from the Pension Funds Act to the Financial Sector Regulation Act. Additionally, it is proposed that the legislative provisions be made flexible enough to expand the scope of the central unclaimed retirement benefit fund to accommodate the inclusion of other assets.

Developing an unclaimed assets identification, management and reporting framework

It is proposed that the immediate focus should be on developing a framework for the identification, monitoring, tracing (including creating consumer awareness) and reporting (to the FSCA) of all unclaimed assets. Creating a standardised framework for unclaimed assets is important as it will assist all stakeholders to have a clear understanding of what constitutes an unclaimed asset across various product categories. The framework is expected to enhance the overall transparency and accountability of financial institutions in handling unclaimed assets. It will facilitate the reporting of such assets to the FSCA, enabling better oversight and regulatory compliance.

The FSCA also intend for the framework to address conflicts of interest. They noted from the comments received, that some respondents were concerned that transferring unclaimed retirement fund benefit assets to the Central Fund may directly affect service providers (including administrators, asset managers, trustees, auditors, and tracing agents), impact their income, the capital of prudentially regulated entities and potentially resulting in job losses. This raises questions about the way financial institutions currently manage conflicts of interest. Another approach is to impose tracing requirements and to penalise institutions who do not comply with those requirements (including naming and shaming).


The immediate next step according to the FSCA, will be to develop a framework that outlines the requirements relating to the identification, monitoring, management, tracking and reporting of unclaimed assets. The framework is an important component of their objective to enhance transparency, accountability and effectiveness of managing unclaimed assets, and reflects their commitment to address unclaimed assets in a systematic and well-structured manner.

To ensure the success of this work, the FSCA will continue to actively engage all relevant stakeholders to obtain their insights, expertise and perspectives. The FSCA intend to approach industry representative bodies for assistance in developing an unclaimed assets taxonomy and further aim to solicit input and feedback from the broader public and relevant stakeholders on the proposed framework for unclaimed financial assets in South Africa before the end of 2024. A collaborative approach is vital in ensuring that the framework is practical, recognises the unique characteristics of the various types of assets and achieves its intended purpose.

In parallel with the above, the FSCA will continue to support the National Treasury in its efforts to establish a central unclaimed retirement benefit fund.


Source: A Framework for Unclaimed Financial Assets in South Africa – FSCA Response to comments on Discussion Paper – March 2024.

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