Certain FSPs and CIS managers must provide information about FICA compliance

The FSCA has issued a Directive to Provide Information (DPI) that applies to certain FSPs and managers of collective investment schemes.

The purpose of the DPI is to assess the relevant accountable institutions’ compliance with the Financial Intelligence Centre Act (FICA). The Authority is collecting the information in its capacity as a FICA supervisory body.

The deadline to submit the information is Wednesday, 31 July 2024.

Accountable institutions are urged to read the FAQ document provided by the FSCA before answering the DPI.

The key points about DPI 2024 in the FAQ document and the accompanying Communication 20 of 2024 (General) are as follows:

Application of the DPI

The DPI must be completed by all accountable institutions listed under Item 5 and Item 12 of Schedule 1, specifically:

• All FSPs excluding FSPs that are exclusively authorised to render financial services in respect of non-life insurance and/or health service benefits only.
• FSPs that have been approved for the first time in respect of rendering financial advisory and/or intermediary services in respect of crypto assets – that is, crypto asset service providers (CASPs).
• All collective investment scheme managers excluding those who exclusively conduct business as described in Part VI of the Collective Investment Schemes Control Act – that is, managers of collective investment schemes in participation bonds.

The accountable institutions described above must complete and submit the DPI even if they are a small business and do not receive client money.

The DPI also provides Item 5 and Item 12 accountable institutions that failed to submit the DPI issued in February 2021 (due: 31 May 2021) with a final opportunity to comply. This includes accountable institutions that did not respond to every question in DPI 2021.

The nature of the questions

DPI 2024 addresses all the requirements with which an accountable institution must comply in terms of FICA. It has questions relating to, inter alia, the accountable institution’s risk-based approach, Risk Management and Compliance Programme (RMCP), customer due diligence, training, record-keeping, reporting, registration, and screening.

Accountable institutions should refer to section 3.10 of the FAQ document for a list common mistakes and misunderstandings they should avoid when completing the DPI. This section also clarifies some of the terminology used in the questions.

Accountable institutions will not be required to provide statistical information or upload supporting documents.

The questions are formulated to allow for “yes”, “no”, or “not applicable” to be selected in response to every question.

The FSCA advises those who answer the questions to have their accountable institution’s RMCP to hand because this will “assist greatly” in completing the DPI.

The senior management of the affected accountable institutions should engage their money laundering compliance officer for assistance with completing DPI 2024.

The Authority cautions accountable institutions to ensure their answers are honest and truthful. The FSCA will test the responses through its ongoing supervisory activities. The failure to be honest and truthful may result in the imposition of administrative penalties.

Accountable institutions are advised to try to complete DPI 2024 in one sitting. In the FSCA’s experience, some accountable institutions completed DPI 2021 partially or even fully but later forgot to submit it on time, rendering them non-compliant with the directive.

Accountable institutions are reminded to save their work frequently during the completion process to avoid losing any information.

How to access DPI 2024

The DPI is available exclusively online from 27 May to 31 July 2024.

The DPI is accessed by going to the FSCA’s website, www.fsca.co.za, and clicking on “Regulated Entities” and then “E-Services”. FSPs will select “FAIS” and “CIS managers” will choose “CIS/Hedge Funds”.

Alternatively, FSPs can click here and CIS managers can click here.

Use of log-in credentials and registration

The DPI is issued in terms of FICA and the responsibility lies with the management of the accountable institution to provide the information. Therefore, the FSCA recommends that key individuals use their existing log-in credentials to access the DPI. If the accountable institution has never used the FAIS e-portal before, the KI should register first.

The FAIS compliance officer’s log-in details cannot be used to access and complete the DPI because log-in credentials cannot be shared and the DPI must be completed by the accountable institution, not the compliance officer.

Accountable institutions that have not yet registered with the Financial Intelligence Centre (FIC) on the GoAML system should not use this as a delay for completing and submitting DPI 2024. These accountable institutions are urged to contact the FIC at 012 641 6000 or visit www.fic.gov.za to start the process of registration with the FIC.

Possible penalties for non-submission

It is mandatory for the applicable accountable institutions to complete and submit DPI 2024. Failure to complete and submit the DPI by 31 July 2024 will be a contravention of FICA and may lead to the imposition of administrative penalties by the FSCA.

Enquires about DPI 2024

For general enquiries related to the DPI 2024, phone 0800 203 722.

For enquiries related to issues with registration on the e-portal, email: Gerald.Maidi@fsca.co.za or Akashen.Rampersadh@fsca.co.za.

For enquiries related to technical or interpretational issues, email: Kgomotso.Molefe@fsca.co.za.

To help the FSCA process enquiries as soon as possible, please ensure that the following information is provided when making an enquiry:

• The FSP or CIS number.
• The name and identity number or passport number.
• The contact details.
• A clear description of the query.