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Investment Indicators - 5 March 2018 |
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Paul Kruger
Author/Editor |
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The time to repair the roof is when the sun is shining – John F Kennedy |
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Distributed to 51,399 subscribers.
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Rates Review |
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1. Secured Investment Rates |
Please note that (G) indicates a Guaranteed and (L) a Linked product. In order to understand the difference between guaranteed and linked rates,
kindly click here for an explanation. |
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Company |
This Week |
Last Week |
1 |
Clientéle Life (L) |
6.850% |
6.650% |
2 |
1Life (L) |
6.780% |
6.570% |
3 |
Absa (L) |
6.643% |
6.426% |
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Company |
This Week |
Last Week |
1 |
Clientéle Life (L) |
6.950% |
6.750% |
2 |
1Life (L) |
6.780% |
6.570% |
3 |
Absa (L) |
6.643% |
6.426% |
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2. Money Market Funds |
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Please bear in mind that our figures, though based on the actual quotations that you also use, are for information purposes only,
and can never replace the official quotation from the product house. In terms of the guarantees, you are requested
to clarify the exact extent of such guarantees with the product house prior to advising clients. |
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From the Crow's Nest |
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Operational Ability under the new F & P |
Back in the good old days, you needed an ashtray, a phone and a filing
cabinet to be regarded as operationally okay. Some even went to such
extremes as having a fax machine installed. This was regarded as
being a little over the top, particularly those with the paper that
faded to nothing in a few months, although those of a slightly less
ethical disposition actually welcomed the gradual disintegration of
the false evidence.
The new Fit and Proper requirements relating to operational ability
sounds like it could have been created after declassification of KGB
documentation, or perhaps employed the same methodology in arriving
at the final outcome.
On a more serious note: these requirements are very important to
safeguard the interests of your business and your clients, and will
go a long way to assist you in running a professional business.
General requirements
A FSP must have the necessary operational ability, including
adequate and appropriate human, technical and technological
resources, to effectively function as a particular category of FSP
and to render the financial services in relation to the financial
product for which it is authorized.
The usual suspects include:
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a fixed physical business address
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communication facilities, including a full-time telephone or cell
phone service
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adequate storage and filing systems for the safe-keeping of
records, business communications and correspondence;
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a bank account with a registered bank, including, where required
in the Act, a separate bank account for client funds; and
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adequate and appropriate key individuals per class of business to
effectively manage or oversee the activities of the FSP relating to
the rendering of financial services. This key individual can be a
single person responsible for managing or overseeing the rendering
of financial services in respect of all or multiple classes of
business of the FSP.
Governance requirements
The governance framework of a FSP must be proportionate to the
nature, scale, risks and complexity of the business of the FSP and
should include effective and adequate systems of corporate
governance, risk management (including conduct risk management) and
internal controls. The following are listed:
- a business plan setting out the aims and scope of the business,
the business strategies and related matters;
- risk management policies, procedures and systems
- adequate systems and procedures to safeguard the security,
integrity and confidentiality of all types of information
- processes to ensure accurate, complete and timeous processing of
data, reporting of information and the assurance of data integrity;
- accounting policies and procedures to enable the FSP to record,
report and deliver financial reports which comply with the
applicable reporting and accounting standards;
- sound and sustainable remuneration policies and practices which
promote the alignment of interests of the FSP with those of its
clients and which avoid excessive risk taking and unfair treatment
of customers;
- a business continuity policy aimed at ensuring, in the case of an
interruption to the FSP's systems and procedures, that any losses
are limited or, where that is not possible, the timely recovery of
such data and functions and the timely resumption of those
activities;
- a recovery plan for the restoration of the FSP's financial
situation following a significant deterioration and viable
resolution plan setting out options for the orderly resolution of
the FSP in the case of failure; and
- provide for regular monitoring and evaluation of the adequacy and
effectiveness of its systems, processes and internal control
mechanisms and measures to address any deficiencies
Can this work for you?
As pointed out, these requirements will lead to far more effective
management and control of the business, but a lot of clarity still
needs to be provided. How long is a piece of string?
For instance, the requirement that the governance framework of the
FSP must be “…proportionate to the nature, scale, risks and
complexity of the business…” raises the question about who
determines the proportionality and adequacy of the framework, or is
this only determined after a complaint and found to be substandard?
That would be retroactive, and in conflict with a proactive
regulatory approach.
Click here to read the relevant section in the 2017
Determination of F & P. |
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Your Practice Made Perfect |
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Prudential Authority a reality on 1 April 2018 |
A media release by the South African Reserve Bank on 1 March 2018
confirmed that the Prudential Authority (PA), one of the two pillars of
the new architecture for the regulation of the financial sector, will
take effect on 1 April 2018.
The PA will be a juristic person operating within the administration of
the South African Reserve Bank (SARB). It will consist of the following
four departments: Financial Conglomerate Supervision Department;
Banking, Insurance and Financial Market Infrastructure Supervision
Department; Risk Support Department; and Policy, Statistics and Industry
Support Department.
March sees the final planning stages for the establishment of the PA.
The dedicated PA website goes live on 1 April 2018, with the full PA team on hand to ensure the effective
regulation of South Africa’s financial sector.
The Twin Peaks model for financial sector regulation was proposed as a
means to reform the regulatory and supervisory system insofar as it
relates to financial institutions. In June 2011, Cabinet approved the
move towards the model which resulted in the drafting of the Financial
Sector Regulation (FSR) Act. The FSR Act was signed into law on 21 August 2017.
The FSR Act gives effect to three important changes to the regulation of
the financial sector.
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It gives the SARB an explicit mandate to maintain and enhance
financial stability
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It creates a prudential regulator, which will be known as the PA,
located within the SARB, responsible for regulating banks, insurers,
cooperative financial institutions, financial conglomerates and certain
market infrastructures.
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The FSR Act establishes what is called a market conduct regulator,
which will be located outside of the SARB.
The passing of the FSR Act is the culmination of collaboration on
financial sector reform by the SARB, National Treasury and the Financial
Services Board over the past decade, and marks an important milestone on
the journey towards a safer and fairer financial system that is able to
serve all citizens. |
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RA as alternative to Trust in Estate Planning
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I came across a very interesting article in Biznews on 2 March titled:
“Retirement Annuities: The new trust”.
Written by Remay de Kock and Kezia Talbot of BDO, it discusses the
future use of retirement annuities as an alternative to trusts in estate
planning.
The recently introduced tax savings afforded via retirement annuities,
coupled with changes to estate duty contained in the last budget speech,
certainly makes this an interesting read for financial planners. The
gradual tightening of the screws on trusts certainly warrants some
serious discussion on the topic. I will collate feedback and publish
some views in responses in this publication next week.
Click here to read the full article. Please
email your responses to me
personally by Wednesday, if possible. |
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Look beyond the price of group disability insurance
Decisions about group disability insurance in South Africa are often
driven by price. To unlock the real value of group disability benefits,
financial advisers and their clients need to look beyond price and adopt
a holistic and integrated approach. This approach focuses on the
employee’s overall financial wellness. It facilitates early detection,
reduces the risk of disability, and includes rehabilitation and
reskilling. |
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Regulatory Examinations |
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2018 Schedules updated |
Please note: Registration cut-off is 11 working days before date of exam.
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Regulatory Exam News |
RE registration and cancellation/amendment of examination
dates
It is important to note the time lines involved for
registration, as well as amendments to the exam dates in view of
changes in the Fit and Proper requirements (see below).The
standard cancellation policy will apply to all registrations for
the regulatory examinations. Candidates who wish to re-schedule
their examinations should take careful cognisance of the FSB’s
cancellation policy.
The table below shows the applicable exam dates from when the
new legislation will be reflected in the exam questions. This is
of particular importance for those who intend writing before the
end of March:
Examination date |
Latest date to request changes
to bookings in accordance to the cancellation
clause1 (10 working days before date of exam) |
CURRENT VERSION OF THE
EXAMINATIONS |
2018-03-23 |
2018-03-07 |
2018-03-26 |
2018-03-08 |
2018-03-27 |
2018-03-09 |
2018-03-28 |
2018-03-12 |
2018-03-29 |
2018-03-13 |
UPDATED VERSION OF THE
EXAMINATIONS |
2018-04-03 |
2018-03-14 |
2018-04-04 |
2018-03-15 |
2018-04-05 |
2018-03-16 |
2018-04-06 |
2018-03-19 |
2018-04-09 |
2018-03-20 |
2018-04-10 |
2018-03-22 |
1Please refer to the FAIS
Circular 5 of 2011 dated 9 May 2011 for the detailed
cancellation clause and conditions.
The new Determination of
Fit and Proper Requirements (BN 194 of 2017) come into
effect on 1 April 2018.
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The new Fit and Proper requirements will form part of the
regulatory exam question data bank from 1 April 2018.
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This means that those who register to write after 29 March 2018 will have to study the new Determination of Fit
and Proper requirements as it appears at this stage that the
updated study material may not be available by 1 April 2018.
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IMPORTANT: The standard cancelation clause will apply to
all registrations for the regulatory examinations.
Candidates who wish to re-schedule their examinations should
take careful cognisance of the FSB’s
cancelation clause.
We have limited stock of the current
LexisNexis preparation material available which will be made
available on a first come first served basis.
Contact details
Email enquiries should be addressed to
faisexam@moonstoneinfo.co.za. You can phone us on
021 883 8000 - select option 2 to speak to one of our
consultants. |
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Featured Positions |
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Financial
Advisor/Planner:
KDO Group Johannesburg - The role involves selling of Hollard
MyLifeandMore products to mainly government employees and private
clients.
Read More
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Senior Client Liaison
Officer:
Vunani Fund Managers (Pty)LTD - We are a fund management company
looking for a suitably qualified EE candidate.
Read More
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Short Term Insurance
Representative:
JFA Shortterm Insurance Brokers, Milnerton, Cape Town - If you have
at least 3 years of experience and preferably live in the vicinity of
the brokerage then
Read More
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Experienced Short Term
Underwriter:
The Insurance Center, Westville, KZN - Vacancy for an experienced
short term commercial and domestic underwriter.
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In Lighter Wyn |
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Tel: +27 21 883 8000 | Fax: +27 21 883 8005
info@moonstoneinfo.com
www.moonstone.co.za
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