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Moonstone Monitor - 24 August 2017 |
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Paul Kruger
Author/Editor |
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The perfect bureaucrat everywhere is the man who manages to make no
decisions and escape all responsibility – Brooks Atkinson
(Methinks we have one too, only we do not call him a bureaucrat.) |
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Distributed to 48,908 subscribers.
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From the Crow's Nest |
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Twin Peaks signed into law |
News 24 reported that President Jacob Zuma signed into law the
Financial Sector Regulation Act 2017 on 21 August.
The legislation – also known as Twin Peaks - was passed by Parliament in
June and sent to Zuma for ratification.
It makes provision for a so-called Twin Peaks model of financial regulation. The
SA Reserve Bank (SARB) will be responsible for regulating all financial
institutions – banks, insurance houses and the asset management sector.
Financial conduct will be governed by a new entity, called the Financial Sector
Conduct Authority, which will replace the current Financial Services Board
(FSB).
The Presidency said in a statement issued on Monday that the Financial Sector
Regulation Act aims to achieve a financial system that works in the interests of
financial customers, and supports balanced and sustainable economic growth in
South Africa.
Industry views differ vastly from that of the Presidency.
Professor Robert Vivian, of Finance & Insurance at the University of the
Witwatersrand and a member of the Free Market Foundation’s Rule of Law Advisory
Board has some rather scathing views on the matter in an article in Fin24 titled
Twin Peaks: Another government-induced calamity. Why fix what isn’t broke?
He referred to National Treasury’s Socio-Economic Impact Assessment (SEIA) as a
“…kind of cost-benefit analysis, on the Financial Sector Regulation Bill (FSR).
Cabinet and MPs should reject this half-baked attempt outright and insist that
it be returned whence it came, before SA has another self-imposed calamity
visited upon it.”
Amongst other criticisms, Vivian condemns the establishment of “legislative
instruments” as a “…violation of the Constitution and the rise of a unitary
state with the state”.
“… the FSR Act and the additional Acts that are promised to follow, will empower
civil servants to tax by decree without so much as a nod from Parliament. They
are to be empowered to raise their own funds through regulatory levies and to
pass their own “laws” euphemistically referred to as “legislative instruments”.
They will have their own courts (“Enforcement Committees”), will impose their
own fines, and keep and spend the proceeds themselves. They are what have been
referred to as a unitary state within the state, violating the Constitutional
requirement of a proper separation of powers between legislature, executive and
judiciary.”
The other side of the coin
In an informative assessment of the Financial Sector Regulation Bill, Alan
Holton, an associate of Moonstone Compliance, wrote in February this year:
“The Bill makes provision for the Prudential Authority and Financial Sector
Conduct Authority to create ‘legislative instruments’. This term is defined and
means subordinate legislation made in terms of a financial sector law, and
includes regulations, prudential standards, conduct standards or joint
standards. These standards have the same effect as the actual legislation and
the most important of these is, arguably, the authority to create Conduct
Standards.”
“Conduct standards must be made in order to ensure the protection and fair
treatment of financial customers and to enhance the efficiency and integrity of
and confidence in the financial system. These standards may also be made to
promote financial literacy and financial capability and to assist in maintaining
financial stability.”
Consultation Requirements
Holton feels quite strongly about criticism that this approach undermines
parliament’s role in law making:
“The financial sector regulator who makes a legislative instrument must, prior
to making a legislative instrument, publish a draft of the instrument that must
be accompanied by a statement explaining the need for the instrument and the
intended operation of the instrument, a statement of the expected impact of the
regulatory instrument and a notice stating that any person may make a submission
about the need for, and the content of, the instrument.
The notice must indicate where and how submissions may be made, and the period
for making submissions, which must be at least 6 weeks.
Before making a regulatory instrument the maker of the regulatory instrument
must submit the regulatory instrument to Parliament together with a report on
the consultation process.
Then, in deciding whether to make a regulatory instrument, the maker must take
into account all submissions received within the 6-week period and must also
take into account any deliberations of Parliament.
Holton’s article also expands in detail on Guidance notices and Interpretation
rulings which form an equally important part of the checks and balances foreseen
in the Act to ensure fair outcomes for all.
Click here to read Alan Holton’s
Legislative Instruments under the FSR Bill.
Alan will also be a presenter at the
Moonstone Regulatory Update Workshops in September.
Click here to download the Financial Sector Regulation Act, 2017. |
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Your Practice Made Perfect |
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Property magnate faces huge civil claims |
Legalbrief Today reports:
Property magnate Nic Georgiou may face a slew of civil claims totalling
more than R2bn after the Constitutional Court dismissed his application
for leave to appeal a 2015 High Court judgment, notes a Moneyweb report.
It says the 2015 judgment ordered Georgiou to repay a single investor’s
original capital investment, but was also binding on 45 other investors
with similar claims. Their collective claims exceed R30m.
Advocate Louis Bolt, who represents the 46 investors, said the
Constitutional Court judgment opens the door for thousands of investors
who invested more than R2bn in the Highveld Syndications 21 and 22
schemes. These investment contracts included specific buyback clauses.
Bolt added that in addition to the 46 investors, three other investors
received default judgments against Georgiou in recent weeks. Their
collective claim is nearly R8m.
“This is the end of the road for Georgiou on the defences raised against
the claims. It also opens the door for all the thousands of HS 21 and 22
investors to institute similar claims,” added Bolt.
Georgiou has indicated that he will challenge these judgments.
Jacques Theron, of Theron and Partners, is a member of the Highveld
Syndication Action Group (HSAG) who is pursuing a class action suit
against Georgiou on behalf of other Highveld Syndications investors.
Click here to read the full
Moneyweb article. |
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Moonstone Regulatory Update Workshops 2017
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Please note: this is NOT
regulatory examination training.
Our popular workshops will be held in seven centres across the country.
Booking for PE and East London closes this coming Tuesday, 29 August.
Please do not delay booking.
The following topics will be covered by Billy Seyffert, COO Moonstone
Compliance, and Alan Holton, industry legal expert:
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A brief update on the RDR
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The proposed changes to the Long- and Short-term Insurance Regulations
and the impact on remuneration
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The proposed changes to the Policy Holder Protection Rules with a
focus on replacement business
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The Financial Intelligence Centre Amendment Act and how it impacts
Accountable Institutions
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The future of Fit and Proper and what will be expected of
intermediaries
Click here to register.
Please read the
Registration Guidelines if you need help.
CPD Points
Attendees who wish to apply for CPD points with their
industry bodies can request a certificate of attendance
after the event. This document will contain the required
information for such application.
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Technologically Speaking
Moonstone Information Refinery |
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Chatbots and Artificial Intelligence
How these might impact the B2C financial services industry |
In a recent blog post in Econsultancy, Alisdair Graham makes the
statement that banking and the financial services industry has been
seen to lag behind in the adoption of emerging and disruptive
technologies, despite a survey which showed that 80% of people in
the industry saw chatbots as an opportunity, rather than a threat.
One of the main reasons for this is that a significant portion of
high value clients, particularly for wealth management firms and
IFAs, are more likely to belong to senior demographics and may have
a higher propensity for non-digital communication such as calls or
face-to-face meetings.
Because of this, a significant proportion of FS businesses may not
have felt the need to invest in digital. This is also potentially
exacerbated by the fact that their competitors and cohorts are also
lagging in terms of digital.
The future is here
As younger, digitally native clients begin moving into the market
for financial services at both a consumer level and professional
level, becoming ‘digital first’ is now imperative for the financial
services industry.
In addition to the changing workforce and consumer landscape, the
Australian Financial Conduct Authority also launched the
Financial Advice Market Review in late 2015 which aimed to
review and explore ways in which financial institutions can take
actions to:
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Provide affordable advice to consumers.
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Improve and increase access to advice.
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Address industry concerns relating to future liabilities and
redress without watering down levels of consumer protection.
With these goals in mind,
AI,
chatbots and digital tick a range of boxes, particularly under
the “affordability” and “accessibility” criteria.
Like some systems that consumers may be familiar with, such as
virtual assistants like Siri, Cortana or Amazon’s Echo platform,
chatbots are essentially pieces of software that simulate human,
natural language conversations and can respond to and act upon
queries and commands from users.
The advantage these systems have over a ‘real’ conversation with a
human is that they are able to extract and analyse a user’s needs
and intent and ultimately return the information a user has
requested or perform actions for them faster, at any time of day or
night, more accurately and at significantly lower cost than a human
counterpart.
This new AI technology has been taken note of by financial
institutions on a global scale, with 80% viewing them as an
opportunity.
Click here if you wish to read the full article.
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delivered via the cloud and requires no technical expertise to use.
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for more information.
Suitebox Media contact
Neil Summers, Sales Manager, Moonstone Business Services
Mobile: +27729088994
Email:
neil@suitebox.com
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Regulatory Examinations
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Frequently Asked Regulatory Exam
Questions |
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What exam must I write?
Both the RE 5 and RE are Level One exams. RE 5 is for Representatives and
RE1 for Key Individuals. The RE 3 exam is for licence category II
candidates.
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How much does it cost?
The FSB determines the fee. Currently it costs R1163 per exam, also in
the case of a re-write.
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What preparation material is available?
Fully updated resources are available for those requiring access to the
legislation applicable to the regulatory examinations:
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Please make sure that you first read the
FSB’s Preparation Guide to
make sure you follow the right process in preparing. Page seven includes
a recent amendment to guide candidates in studying in the correct
manner. |
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Click on the following highlighted sections to download the relevant
updated Inseta learning material for key individuals,
RE 1, and
representatives,
RE 5. |
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LexisNexis provides a “Legislation Handbook” together with a
“Preparation Guide” containing the qualifying criteria, with a link to
the relevant legislation. |
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The
Juta FAIS Pocket Statutes also contains a CD with a comprehensive
list of updated supplementary legislative material for reference
purposes. Please click here to order this from our online shop. |
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The FSB’s telematics broadcast on the RE 1 and RE 5
provides a good introduction and overview, and can also be ordered
online in: |
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DVD format or on a
USB memory stick |
| 4. |
Where can I write?
Go to:
http://www.faisexam.co.za/show_venues |
| 5. |
What dates are available?
Go to:
http://www.faisexam.co.za/view_schedule |
| 6. |
What training is available?
As an Exam body we are not allowed to recommend companies that offer
face-to-face Regulatory exam classes. You can try Google for someone in
your area.
Bear in mind that this exam tests your knowledge about the laws
applicable to the provision of financial advice and intermediary
services. The questions are based on very specific qualifying criteria
set out in the FSB preparation guide. Any training that does not have
this as a basis will not prepare you properly for the exam. Do your own
research and don’t just accept what others say. |
| 7. |
Where can I buy old question papers?
There are no genuine “old question papers” available. Be very careful
when buying such preparation aids as some of those on offer are not in
line with the high standard prevailing in the actual exams and often
lead to a false sense of knowledge which is sadly exposed when
confronted by the actual exam. Follow the guidelines provided in the FSB
Preparation Guide and you are far more likely to achieve success. |
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Careers Platform
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Are you hiring? Advertise your position on Moonstone’s Career Platform
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The Moonstone website -
www.moonstone.co.za
- enjoys an average of 15 000 visits and approximately 39 000 page views per month. |
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Moonstone boasts an exclusive newsletter mailing list of over 48000
dedicated financial decision makers who receive 2 newsletters per week. |
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Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors:
Investment, Risk, Healthcare, Banking, Retirement, and Insurance. |
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Featured Positions |
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Short Term Commercial
and Domestic Sales Consultant:
Wealth Solutions Capital Insurance Brokers, Bedfordview - We are
looking for dynamic and energetic go getters for short term commercial
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Compliance Officer
under Supervision:
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In Lighter Wyn |
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Pictures to ponder |
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The current future
Guilty as charged, M’lord
Best reason not to emigrate
The only ones bucking the trend are the Vaalies semigrating to Cape
Town.
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Tel: +27 21 883 8000 | Fax: +27 21 883 8005
info@moonstoneinfo.com
www.moonstone.co.za
P.O. Box 12662, Die Boord, Stellenbosch, 7613, Republic of South Africa
Disclaimer:
Services and products advertised by external product suppliers in
this newsletter are paid for by the respective suppliers. Moonstone
does not endorse any opinions, conclusions, data, products, services
or other information contained in this e-mail which is unrelated to
the official business of Moonstone and furthermore accepts no
liability in respect of the unauthorised use of its e-mail facility
or the sending of e-mail communications for other than strictly
business purposes.
The complete disclaimer can be accessed
here.
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©2015 Moonstone. All rights reserved. |
