The FSCA has provisionally withdrawn the licence of Prosper Funeral Solutions (Pty) Ltd, which was placed in final liquidation 28 February.
The High Court granted the order following an application by African Unity Life, which, the court found in January, has a valid claim for R10 million in unpaid premiums.
Read: Funeral intermediary in provisional liquidation over unpaid premiums
The Authority cited section 44(3) of the Fit and Proper Requirements as one of the reasons for provisionally withdrawing Prosper’s licence, with effect from 3 February. Paragraph (b) of the sub-section states, inter alia, that no person may continue as an FSP if placed under liquidation or provisional liquidation.
The other reasons were for contravening section 19(2) of the FAIS Act and section 2 of the General Code of Conduct.
Section 19(2) requires an FSP to submit audited financial statements in accordance with the Auditing Profession Act.
Section 2 of the Code of Conduct requires an FSP to render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and the integrity of the financial services industry.
Licence withdrawn
In a separate notice, also published on 3 March, the FSCA withdrew the licence of Stringfellow Financial Services (Pty) Ltd with effect from 13 December 2022.
On 14 December last year, the FSCA announced that it had provisionally withdrawn Stringfellow’s licence. It also imposed a R20 million administrative penalty on Stringfellow Financial Services and a R15m penalty on Stringfellow Group, and debarred its director, Thomas Stringfellow, for 20 years.
Read: FSCA sanctions Stringfellow after investigation into investment scheme
The FSCA cited the same reasons for withdrawing Stringfellow Financial Services’ licence as it did for imposing the R20m fine: contravention of sections 7(1)(a), 13(2)(b) and 13(3) of the FAIS Act, and sections 2, 3(1)(a), 8(1)(a) to (d) and 11 of the General Code of Conduct.
Section 7(1)(a) of the FAIS Act prohibits a person from providing financial services without a licence.
Section 13(2)(b) requires an FSP to ensure that its representatives comply with any applicable code of conduct, as well as with other applicable laws on conduct of business.
Section 13(3) requires an FSP to maintain an up-to-date register of representatives and key individuals.
Section 3(1)(a) of the Code of Conduct prescribes the minimum disclosures that must be made to a client when rendering financial services.
Sections 8(1)(a) to (d) require an FSP to assess a client’s financial needs and risk profile to determine which product would be most suitable for the client’s needs.
Section 11 requires an FSP to have suitable guarantees or professional indemnity or fidelity insurance cover.
