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LEGAL NOTE: Recap of recent updates from the FSCA

Updated: Apr 20, 2023

FSCA: Revised draft Conduct Standard on requirements relating to the provision of a benchmark.

  • Comment is invited on a revised draft Conduct Standard on the requirements relating to the provision of a benchmark, published by the Financial Sector Conduct Authority.

  • The main objective of the Conduct Standard is to propose a regulatory framework in terms of which benchmark administrators will be supervised.

  • The framework aims to ensure the accuracy, robustness, and integrity of benchmarks and the way in which benchmarks are determined.

Status: Comments due 6 February 2023

FSCA: Amendments to General Code of Conduct for FSP.

Amendments have been made to the General Code of Conduct for Authorised Financial Services Providers and Representatives, 2003. The amendments provide, among others, that:

  • a provider who provides products or services to a client other than financial products or financial services, must disclose to the client the fact that the additional products or services are not regulated under the Financial Advisory and Intermediary Services Act 37 of 2002;

  • a provider, excluding a representative, an insurer or a bank must, if, and to the extent, required by the registrar maintain in force suitable guarantees or professional indemnity or fidelity insurance cover.

Status: Effective 2 December 2022

FSCA: Conduct Standard on requirements related to the payment of pension fund contributions.

  • The final conduct standard on the requirements related to the payment of pension fund contributions has been published by the Financial Sector Conduct Authority.

  • The Conduct Standard provides, among others, that:

  • A fund must notify every employer prior to the commencement of such employer’s participation in the fund, and on an annual basis thereafter, of the employer’s duties, obligations and liability;

  • The minimum information to be furnished to a fund by an employer with regard to payments of contributions made by the employer must contain, where an employer has multiple pay-points, the pay-point which made the deduction; and

  • Compound interest on late payments or unpaid amounts is prescribed to be the prime rate plus 2%.

  • NT has published proposed repeal of Regulation 33 of the regulations in terms of section 36 of the Pension Funds Act, we are awaiting the gazetting of the repeal.

Status: effect on 20 February 2023

FSCA: Submission of valuation reports in terms of section 16(1) ito Pension Funds Act.

Retirement funds are requested to submit information to the Financial Sector Conduct Authority, through a spreadsheet, which summarises the financial position of the fund together with the valuation report.

Status: Published 3 November 2022

FSCA: Draft Prudential Standard – Regulation 28 Quarterly Reporting Requirements (Retirement Funds).

  • The draft Prudential Standard prescribes quarterly reports for retirement funds and incorporates a revised and updated quarterly reporting format.

  • In addition, the draft Prudential Standard provides enhanced details, and the specific paragraphs of the quarterly reports are expanded on in line with recent amendments to Regulation 28 of the Regulations.

  • The draft Prudential Standard also includes quarterly reporting in respect of infrastructure, overall limit for infrastructure across all classes, and overall limit

  • for all instruments per entity or issuer.

  • There is also a proposal to include reporting on matters related to environmental, social and governance issues.

Status: Comments were due by 7 December 2022

FSCA: Draft Prudential Standard – Requirements related to Regulatory Reporting and Audited Financial Statements for Pension Funds.

  • The draft Prudential Standard proposes to consolidate all audit and regulatory reporting requirements into one instrument and incorporate both the regulatory reporting requirements and the format of the financial statements into one document.

  • It is proposed that the existing exemption exempting specific funds from the requirements to appoint an auditor and to have its financial statements audited and reported on by an auditor, be removed. This means that the draft Prudential Standard will be applicable to all funds, including funds with total assets below R50 million.

Status: Comments due by 18 January 2023

FSCA: A framework for unclaimed financial assets in South Africa.

  • The discussion document makes 13 recommendations in support of a holistic and consistent approach to the treatment of lost accounts and unclaimed assets across financial institutions.

  • Assets to be included within the scope:

  • Retirement fund benefits

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

  • Participatory interests in CIS

  • Life and Non-Life Insurance policies

  • Securities

  • It is proposed that the definition of unclaimed assets, as far as possible, be aligned

  • to the definition of an unclaimed benefit in the Pension Funds Act.

  • It is proposed to establish the Central Fund as a juristic person under the Financial Sector Regulation Act and classify it as a financial institution subject to regulatory oversight by the FSCA and the Prudential Authority (PA).

  • An alternative approach under consideration is to transfer to National Revenue Fund should complexities surrounding a Central Fund be considered insurmountable.

Status: Comments were due by 30 November 2022

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