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Moonstone Monitor -  7 December 2017
In This Week's Newsletter
 
From the Crow's Nest
Conduct of Business Regulatory and Supervisory Developments – The new dawn is upon us
 
Your Practice Made Perfect
Debt Relief Bill Published – Debt intervention for certain individuals, heavy fines for transgressors
Revised B-BBEE financial sector rules now in force – Theme of financial inclusion continued
 
Technologically Speaking
Embracing the Future – Ten considerations from PwC as we head for 2020
 
Regulatory Examinations
Legislation Handbook and Preparation Guide for REs – New stock arrived. Order online
Schedule for 2018
Self-Help Guidelines and Frequently asked questions
 
Careers Platform
Are you hiring? Advertise your position on Moonstone’s Career Platform
Featured Positions
 
In Lighter Wyn
Life from a Retiree’s Perspective…
Paul Kruger 2017-08-03
Paul Kruger Author/Editor
 
 
 
 

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From the Crow's Nest
From the Crow's Nest
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:
  • 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.

  • 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.

  • 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).

  • 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.

  • 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.

  • 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.

  • 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.

  • The third Party Cell Captive Insurance Position Paper is planned to be published by 15 December 2017.

  • The Short-Term Insurance Intermediary Activity Analysis Report is due to be released early in 2018.

  • 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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An authorised Financial Services Provider FSP no. 731
Your Practice Made Perfect
Your Practice
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:
  • Does not receive an income or his or her average gross income during the preceding six months did not exceed R7 500 per month;

  • Has no realisable assets;

  • Is not under debt review; and

  • 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:
  • By email to ahermans@parliament.gov.za; tmadima@parliament.gov.za;

  • 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

  • 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
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:
  • financing affordable housing, black-owned small, medium and micro enterprises and agricultural activities;

  • investing in ‘various types of transformational infrastructure’ that will assist in creating the conditions necessary for equitable economic growth; and

  • 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:
  • additional black business growth funding;

  • access to financial services;

  • targeted investments; and

  • 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
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Moonstone Information Refinery
 
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.
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.
3. What preparation material is available?
Fully updated resources are available for those requiring access to the legislation applicable to the regulatory examinations:
  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.
  Click on the following highlighted sections to download the relevant updated Inseta learning material for key individuals, RE 1, and representatives, RE 5.
  LexisNexis provides a “Legislation Handbook” together with a “Preparation Guide” containing the qualifying criteria, with a link to the relevant legislation.
  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.
  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:
    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
Are you hiring? Advertise your position on Moonstone’s Career Platform
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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
  • Junior Short Term Underwriter: JFA Short Term Brokers, Milnerton - We require a bilingual underwriter with RE5 and NQF 4 qualification. Read More

  • Personal Assistant and Administrator of investments, life insurance and Medical Aids: Vesto Capital, Moorreesburg - We are looking for a qualified, experienced and well groomed lady to commence employment on 8 January 2018. Read More

  • Short Term Claims Administrator: The Insurance Center, Westville, Durban - The successful applicant must be experienced, work unsupervised and be competent to negotiate claims settlements at the highest level. Read More

  • Financial Sales Consultant: Quest Staffing Solutions, Cape Town - You will provide qualified financial advice directly to clients and therefore a minimum of 6 months Outbound Call Centre sales experiences or 12 months face to face financial sales, with a RE qualification will be required. Read More

  • Group Compliance Practitioner: LegalWise, Gauteng - You will play a key role in assisting the Group Compliance Manager to enhance and maintain the compliance strategies and processes, as well as a culture of ethics and compliance, across the Group. Read More

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In Lighter Wyn
In Lighter Wyn
From a Retiree’s Perspective
Thanks, Kevin Smith
  1. 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.

  2. I changed my car horn to gunshot sounds. People move out of the way much faster now.

  3. 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.

  4. You know that tingly little feeling you get when you really like someone you've just met? That's common sense leaving your body.

  5. I don't like making plans for the day. Because then the word "premeditated" gets thrown around in the courtroom.

  6. I didn't make it to the gym today. That makes 1,500 days in a row.

  7. 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.

  8. Dear paranoid people who check behind shower curtains for murderers: If you find one, what's your plan?

  9. Everyone has a right to be stupid. Politicians just abuse the privilege.

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