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Moonstone Monitor - 7 December 2017 |
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Paul Kruger
Author/Editor |
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We all have such a finite time to leave the world better than we found it
– Dave Kellett |
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Distributed to 49,214 subscribers.
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From the Crow's Nest |
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Conduct of Business Regulatory and Supervisory Developments
by Dr Tarryn Bannister, Legal Researcher, Moonstone Compliance and Risk
Management |
The FSB Insurance Division’s recent Seminar focused on planned conduct
of business regulatory and supervisory developments in the insurance sector.
Many of these developments are driven by three overarching objectives, including
redesigning the organisational framework, establishing a robust regulatory
framework and increasing the focus on transformation in the financial services
industry. The importance of improving access to financial services and
establishing a culture based on treating customers fairly was also emphasised.
Some of the key changes and developments that were discussed at the seminar
include:
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The organisational shift from the sectoral FSB to the functional FSCA, which
is envisaged to be effective from April 2018. With regards to licencing, the FSB
emphasised that, during these changes, the focus will be on engaging with
financial services providers to facilitate a conversion process, as opposed to
re-licensing providers.
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The planned effective date for the Insurance Bill, which was passed by the
National Assembly on Tuesday the 28th of November, is July 2018. The Insurance
Bill makes provision for micro insurance while entrenching the broader goal of
transformation as one of the objectives of the Act. Insurers will need to
demonstrate, through their governance frameworks, that they have a plan to
achieve the transformation objectives set out in the Act. Schedules 1 and 3 of
the Act also seek to ensure alignment between the LTIA and the STIA.
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The COFI Bill will be published
early in 2018 for comment (it may possibly be
published in December 2017, but this is dependent on a number of factors). The
Bill is planned to be tabled in Parliament during the second half of 2018
(possibly July 2018).
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The final version of the Tranche 1 PPR amendments is intended to be published
by 15 December 2017, with the planned effective date 1 January 2018. The final
version of the Tranche 1 Insurance Regulations amendments are planned to be
published by 15 December 2017. The planned effective date is 1 January 2018.
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The theme of transformation and consumer education was highlighted during the
discussion on RDR updates. A further consultation paper on advisor
categorisation is planned for the end of 2017, possibly early 2018, confirming
the previously communicated two-tier model and requesting input on a number of
points including the feasibility of allowing a product supplier agent (PSA) to
act as the PSA of more than one product supplier.
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For FAIS CAT 1 and CAT 2 licenses, informal consultation is still underway
within the investment industry on defining “investment management” as a specific
licensed activity. The FSB is also no longer proposing to completely prohibit
white labelling by entities providing advice. However, while white labelling
will not be prohibited, it was emphasised that they will need to be effectively
regulated so as to avoid conflict of interests. A public discussion document on
these investment-related proposals will follow in early 2018.
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With regard to the Draft Determination on Equivalence of Reward, it was
emphasised that this is not a new concept and that it is necessary in order to
level the playing field between tied advice and untied advice. The Planned
effective date is 1 January 2018.
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The third Party Cell Captive Insurance Position Paper is planned to be
published by 15 December 2017.
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The Short-Term Insurance Intermediary Activity Analysis Report is due to be
released early in 2018.
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The Tranche 2 amendments, which concern additional PPR and Insurance
Regulations amendments, are planned to be released for comment by April 2018.
The planned effective date is July 2018. The purpose of these amendments is to
align the PPR and insurance regulations terminology with the Insurance Act and
to address segmentation across the insurance industry.
Please keep in mind that the above-mentioned timelines are dependent on what
happens in Parliament. While a significant amount of information was covered
during the seminar, there was a strong focus on the need to establish a culture
based on treating customers fairly, adopting a more proactive approach to
Fintech and facilitating transformation within the insurance sector. All of the
presentations from the seminar are also available on the FSB Website.
Whatever happens, the financial services industry will look substantially
different in six to seven months from now. |
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Your Practice Made Perfect |
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Debt Relief Bill Published
by Gerrit Viviers |
On 24 November 2017, the Portfolio Committee on Trade and Industry
published its Draft National Credit Amendment Bill, 2018 (the Bill) in
the Government Gazette. The Bill is generally referred to as the Debt
Relief Bill as it proposes the new concept of ‘debt intervention’.
A South African citizen or permanent resident that is a natural person
who, on the date of the submission of the application is a consumer
under a credit agreement, may apply once to the National Credit
Regulator (NCR) for a debt intervention, provided that the consumer:
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Does not receive an income
or his or her average gross income during
the preceding six months did not exceed R7 500 per month;
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Has no realisable assets;
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Is not under debt review; and
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The total unsecured debt owing to credit providers on 24 November 2017
did not exceed R50 000.
A debt intervention applicant includes a disabled person, a minor
heading a household or a woman heading a household.
The Bill also expands the NCR’s functions to suspend credit agreements
considered to be reckless.
The Bill further proposes a range of new criminal offences, which among
others, includes the offence where a person gives him or herself out as
a credit provider, without being registered with the NCR. It is proposed
that the perpetrators of these offences, be liable to a fine or
imprisonment not exceeding 10 years, or both a fine and such
imprisonment or, if the convicted person is not a natural person, to a
fine not exceeding 10% of its annual turnover or R1 million, whichever
amount is the greater.
The Bill also creates an offence where the perpetrator is a company, the
directors and prescribed officers of the company who, knowingly, was a
party to the contravention is guilty of an offence and subject to the
same penalties as if the director or prescribed officer committed the
offence in person.
Members of the public are invited to submit written comments on the
Bill on or before 15 January 2018 by directing it to the Committee
Secretaries, Mr A Hermans and Mr T Madima:
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By email to
ahermans@parliament.gov.za;
tmadima@parliament.gov.za;
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By post to Ms J Fubbs, Chairperson: Portfolio Committee on Trade and
Industry, Attention: Mr A Hermans, W/S 3/95, 3rd Floor, 90 Plein Street,
Cape Town, 8000; or
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By telephone to Mr A Hermans (021) 403 3776 or 083 709 8482; Mr T Madima (021) 403 3822 or 083 709 8419
Please
click here to download a copy of the Bill.
Moonstone employed an NCA Specialist to render NCA compliance services
to its clients and prospective clients. Should you have any queries,
please contact Gerrit Viviers on 021 883 8000 or by email to
gviviers@moonstonecompliance.co.za. |
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Revised B-BBEE financial sector rules now in force
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Legalbrief Today reports:
The revised financial sector broad-based black economic empowerment
charter and code of good practice, gazetted on 1 December 2017, includes
‘two unique elements’: empowerment financing and access to financial
services. The intention is to facilitate meaningful participation in
the broader economy by the previously disenfranchised.
In that context, the charter refers to:
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financing affordable housing, black-owned small, medium and micro
enterprises and agricultural activities;
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investing in ‘various types of transformational infrastructure’ that
will assist in creating the conditions necessary for equitable economic
growth; and
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making financial services accessible to the unbanked and under-served.
In addition to achieving equity ownership targets by selling shares and
assets, measured entities may earn points by way of equity equivalent
programmes that include:
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additional black business growth funding;
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access to financial services;
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targeted investments; and
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enterprise development.
As we pointed out last week, the revised charter and code will be the
focus of a second round of parliamentary hearings on transformation
across the sector’s various industries planned for the first half of
next year.
Please
click here to download the revised financial sector broad-based
black economic empowerment charter and code of good practice. |
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Technologically Speaking
Moonstone Information Refinery
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Embracing the Future |
PwC Global published a remarkable document titled “Financial
services technology 2020 and beyond: Embracing disruption”.
The study can be downloaded, and for those simply wanting the gist
of it, there is a list of ten competitive technology-driven
influencers heading for 2020.
Below are two to whet your appetite.
The sharing economy will be embedded in every part of the
financial system
By 2020, consumers will need banking services, but they may not turn
to a bank to get them. Or, at least, maybe not what we think of as a
bank today. The so-called sharing economy may have started with
cars, taxis, and hotel rooms, but financial services will follow
soon enough. In this case, the sharing economy refers to
decentralized asset ownership and using information technology to
find efficient matches between providers and users of capital,
rather than automatically turning to a bank as an intermediary.
Regulators will turn to technology, too
The use of technology and its implications are not limited to
financial institutions. Regulators are rapidly adopting a wide range
of data gathering and analytical tools, too. They are trying to
learn more about individual institutions’ activities and overall
systemic activity. They also hope to monitor the industry more
effectively and to predict potential problems instead of regulating
after the fact. Examples of this include the supervisory procedures
and data requests tied to ‘stress tests’, asset quality reviews and
enhanced reporting requirements coming out of Washington, London,
and Basel. Using sophisticated analytical tools on large volumes of
data, regulators can compare scenarios and address potential issues
before they become full-scale market problems.
Click here to access the information referred to above.
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Regulatory Examinations
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RE Schedule updated |
Please note: Registration cut-off is 11 working days before date of exam.
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Frequently Asked Regulatory Exam
Questions |
1. |
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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2. |
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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3. |
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
MP4 direct download - 2 Gb |
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 49000
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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Junior Short Term
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Short Term Claims
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In Lighter Wyn |
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From a Retiree’s Perspective |
Thanks, Kevin Smith
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I'm not saying let's go kill all the stupid people. I'm just
saying let's remove all the warning labels and let the problem work
itself out.
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I changed my car horn to gunshot sounds. People move out of the
way much faster now.
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You can tell a lot about a woman's mood just by her hands. If
they are holding a gun, she's probably very unhappy.
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You know that tingly little feeling you get when you really like
someone you've just met? That's common sense leaving your body.
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I don't like making plans for the day. Because then the word
"premeditated" gets thrown around in the courtroom.
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I didn't make it to the gym today. That makes 1,500 days in a
row.
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I decided to change calling the bathroom the John and renamed it
the Jim. I feel so much better saying I went to the Jim this
morning.
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Dear paranoid people who check behind shower curtains for
murderers: If you find one, what's your plan?
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Everyone has a right to be stupid. Politicians just abuse the
privilege.
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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
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or the sending of e-mail communications for other than strictly
business purposes.
The complete disclaimer can be accessed
here.
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