On 26 October, alone, the FSCA issued six warnings to the public against providers of financial services which the regulator suspected were conducting unregistered business. Four of the six were involved in the funeral business.
Not a week goes by without at least a couple of cautions against potential transgressors being published via email to a database of subscribers, possibly mainly the media and compliance practitioners.
What concerns me is what effect such warnings have. I may be totally off the mark, but the people who become victims are very likely not on the internet or, if they are, do not subscribe to the FSCA’s notifications. Possibly, it is hoped that the media will publish such warnings, but I suspect it’s a bit like the boy who shouted wolf.
Last week, the master brain behind Fidentia was released on parole. I recall the huge waves caused by the exposure in the media then. Ditto the Steinhoff saga. Big bucks make for big stories in the media.
But what about the poor for whom a decent burial is so important, both from a customary perspective and as a social obligation? Nothing much appears to have changed since 30 September 2004, when FAIS became effective.
In the days when the (then) Financial Services Board still published quarterly newsletters, much was made of the problems it experienced in the field of funeral policies, and how difficult it was to regulate, as many operators merely conducted business outside the regulatory net.
At one stage, an attempt was made to address the issue by subjecting those who did operate within the law to regulatory exams. Unfortunately, this did not go too well, so yet another exemption was published, providing certain categories of reps and FSPs with a loophole until such time as a “bespoke” exam, focused on their obligations, could be developed.
This never happened.
On 4 May 2015 we wrote: The FSB has decided to temporarily suspend the development of the bespoke examination until further clarity can be obtained regarding the impact of the proposed micro-insurance legislation and other regulatory developments on that examination. The exemption granted to representatives rendering financial services in respect of certain defined financial products will remain in force.
In addition to the responsibilities placed on product providers … provision is made for stricter product specifications to avoid client confusion and mis-selling.
As in so many other spheres in the country, very little has changed in the lot of the poor. Issuing warnings against fraudulent operators to people who will never see or hear them is really an exercise in futility, possibly aimed more at soothing one’s conscience than really addressing the root cause of the problem.
Thus, the low-hanging fruit, who diligently register, pay their levies, submit their returns and try in every which way they can to comply, are often the subject of regulatory action, while those who show blatant disregard for the authorities go their merry way. Robin Hoods in reverse, while the sheriff of Nottingham apparently fears to enter the forest.
On a slightly lighter note, and with election day around the corner, we look at that bastion of democracy, Russia, for some guidance.
Concerning economic recovery, it appears that Russia’s new plan is based on the South African model. Vladimir Putin’s goal is to make people rich and happy. A list of the people is attached.
An American and a Russian are arguing about which country has more freedom. The American says, “I can walk right up to the White House and shout: ‘Down with Donald Trump!’ and nothing bad will happen to me.” The Russian replies, “Guess what? I can walk in front of Kremlin and shout: ‘Down with Donald Trump!’ and nothing will happen to me either.”
What’s the definition of a Russian string quartet? A Soviet orchestra back from a US tour.
“Comrade Rabinowitz, why weren’t you present at the last meeting of the Communist Party?”
“No-one told me it would be the last one. If I had known that I would have come with my whole family.”
