The FSCA has withdrawn the FSP licence of Salt Asset Management (Pty) Ltd (SAM), saying the company failed to respond to an inspection report that found “significant deficiencies” with its money laundering and terrorist financing risk management.
In April, the Authority provisionally withdrew SAM’s licence for failing to comply with the Financial Intelligence Centre Act (Fica) and the FAIS Act.
Earlier this year, a documentary by TV news network Al Jazeera implicated SAM in alleged money laundering for a global gold-smuggling ring. SAM denied the allegations.
The FSCA said it conducted an inspection on SAM between 29 November and 1 December 2022 following allegations of SAM’s potential involvement in money-laundering activities relating to the Gold Leaf Tobacco Corporation.
“The inspection revealed significant compliance deficiencies and a poor level of understanding by SAM of their money laundering and terrorist financing risks,” the FSCA said in a statement on 22 September.
The Authority said SAM was found to be in breach of several requirements of Fica by, among other things, failing to:
- develop, document, maintain, and implement a risk management and compliance programme for anti-money laundering and counter terrorist financing;
- keep customer due diligence and transaction records;
- provide the Financial Intelligence Centre and the FSCA with prescribed particulars of third parties that keep client records;
- ensure that the institution does not establish a business relationship with anonymous clients and clients acting under false or fictitious names;
- establish and verify the identity of clients and other persons;
- understand and obtain information on business relationships;
- conduct additional due diligence relating to legal persons;
- conduct ongoing and enhanced due diligence;
- terminate business relationships where it was unable to identify and verify the identity of clients, understand, and obtain information about the business relationships and conduct ongoing due diligence; and
- screen clients against the relevant Targeted Financial Sanctions Lists.
The FSCA identified other contraventions relating to the FAIS Act through its ongoing supervision of SAM.
Compliance with Fica is also a requirement in terms of the FAIS Act and the Determination of Fit and Proper Requirements.
The FSCA invited SAM to respond to the findings and the provisional withdrawal of its licence.
SAM failed to respond to the inspection report and notice of provisional withdrawal, resulting in the FSCA’s decision to withdraw its FSP licence with effect from effect from 15 September, the Authority said.
The licence withdrawal means SAM may not render financial services directly to the public or on behalf of any FSP.
SAM has not yet commented on the FSCA’s decision.
The FSCA urged accountable institutions to continue reviewing and strengthening their anti-money laundering and terrorist financing risk and control systems. Non-compliance with Fica will result in “firm regulatory action”.
Note: Salt Asset Management should not be confused with a different company, Salt Employee Benefits.
