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Moonstone Monitor - 15 March 2018 |
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Paul Kruger
Author/Editor |
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Be faithful in small things, because it is in them that your strength lies
– Mother Teresa |
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Distributed to 51,295 subscribers.
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From the Crow's Nest |
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Audenberg Appeal against FAIS Ombud |
The FSB Appeal Board recently published its decision at a hearing held
on 27 February 2018.
The appeal was dismissed, but not before the Board expressed some very
concerning comments on the office of the Ombud’s handling of the case.
What is its mandate?
Under the heading “Risk management”, the latest FAIS Ombud annual report notes:
“The FAIS Ombud reports to the Board of the Financial Services Board. In
discharging its oversight responsibility… the Board adopts a combined assurance
approach with the over-riding purpose of assuring its stakeholders about the
effectiveness of governance systems and instilling confidence in the delivery of
business value.
The FAIS Ombud’s strategic goals are prioritised in the following manner:
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to resolve complaints in a fair, expeditious, and economical manner;
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to achieve operational excellence; and
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to engage with stakeholders.
These goals are monitored and progress reported quarterly to performance
information consolidation structures…
The Audenberg case
In the light of the above it is interesting to note the views of the FSB Appeal
Board on some of the decisions made by the FAIS Ombud in this case.
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“This is not the first instance where the Appeal Board had to point to the
failure of natural justice in the office of the Ombud and about the
unjustifiable delays in processing matters. Failure of the office of the Ombud
to comply with its statutory duties may in an appropriate case lead to the
setting aside of a determination to the detriment of complainants.”
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“It is unfortunate that this Board has to revisit this issue but the facts of
the case require it.”
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“In this matter the Ombud failed to deal with the matter expeditiously or in a
procedurally fair manner.”
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“As to expedition, the complaint was lodged on 28 April 2010. In response, the
appellants addressed the issues raised on 29 July 2010. They followed this up
with further letters, the last being of 5 May 2011. The first action by the Ombud was on 8 January 2014…”
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“The first problem with the letter is that the issues in the Sharemax matter
had nothing to do with the issues in this case. The excuse was accordingly not a
valid excuse.”
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“The second problem is that the Ombud did not inform the appellants that the
matter was still pending and the appellant had good reason to assume that the
matter had died a natural death.”
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“The same happened with the next letter from the Ombud of 19 May 2015. Once
again, the appellants were kept in the dark.”
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“The first intimation the appellants had that the matter was alive was after a
silence of four years — on 24 June 2015, when the Ombud wrote to the appellants.
The appellants provided the facts requested on 6 July 2015 and on 15 September 2016 the determination was made.”
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“To add insult to injury, it took the Ombud ten months to deal with the
application for leave to appeal.”
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“That brings us to the question of procedural fairness. It is apparent that
the Ombud must have been in telephonic or other contact with the complainant
shortly before the determination. The new allegations of the complainant were
not put to the appellants and do in any event not appear from the record. This
amounts to a basic denial of justice. Some of the information unilaterally
obtained found its way into the determination.”
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“In respect of the appellants' suggestion' (it was in fact an allegation) that
City Capital was back on track, the Ombud said that this was not supported by
documentation and that the allegation was irresponsible. The Ombud relied on the
fact that the company had been liquidated during 2009. The problem with the
Ombud's findings in this respect (para 67) is that the Ombud failed to have
regard to the fact that the company was for a while under provisional
liquidation and has long since been trading. The Ombud simply failed to follow
up or test the information that came from the appellants, creating the
impression that whatever a complainant says must be true and what the FSP says
must be untrue.”
A similar comment was made as far back as October 2015 when the retired judge
who chairs the Appeal Board said: “Matters like this (there are other instances)
add fuel to the allegation that the Ombud is biased against financial service
providers and sees her role as champion of disappointed clients. The Act
requires her to deal with complaints impartially…”
What should be of concern to those accountable for the office of the Ombud
operating within its mandate is that very few of the Ombud’s decisions are taken
on appeal. Who knows how many other cases, not appealed, suffered a fate similar
to what is outlined above, and in previous scathing comments by the Appeal
Board. By far the majority of complaints are resolved by means of settlements,
and very few are reported on.
Some of the comments above were made as far back as
October 2015, and one has to
ask whether this was addressed by those who monitor the actions of the Ombud.
The fact that this office, as a dispute resolution mechanism, operates in a less
formal manner, requires more stringent supervision, not less.
Click here to download the
Audenberg case. |
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Your Practice Made Perfect |
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Money Laundering Examples |
The Financial Intelligence Centre recently published a number of case studies
to assist readers in identifying potential criminal financial activity,
to illustrate how criminal incidents can occur and how criminals
operate.
The ten topics include the use of duplicate payments, creating
fraudulent companies, stolen student loans, environmental crimes and
trust account abuse.
Please
click here to download. You are obviously welcome to share it
with your clients as well. |
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Crime Tracker Statistics
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Bryte Insurance, a business risk specialist, released its latest crime
tracker statistics for the third quarter of 2017. Bryte’s Crime Tracker
is an indicator of long-term crime trends in South Africa as captured by
insurance claims.
A report in BusinessTech notes a decline in crime against businesses,
but an increase in robbery, particularly cash in transit heists.
Click here to read the article. |
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Class of Business Training registration opens today
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Moonstone Business School of Excellence (MBSE) will provide training
in all nine modules stipulated in the Latest Determination of Fit and
Proper requirements.
Quick checklist – who should attend Class of Business training?
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All FSPs, Key Individuals and Representatives appointed after 1 April 2018.
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FSPs, Key Individuals and Representatives who seek authorisation,
approval or appointment for new financial product categories after 1 April 2018.
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Representatives working under supervision as at 1 April 2018, or
appointed under supervision after 1 April 2018.
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Certain exemptions apply, depending on the type of business one does,
and how it is conducted. Please contact your compliance officer if in
doubt.
Register today! |
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Technologically Speaking
Moonstone Information Refinery
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Will your financial advisor be replaced by a machine? |
In a recent article in Moneyweb, Patrick Cairns addresses the question
of how advisors should stay relevant in a digital world. He shares
how there is still a human side to digital engagement; one that is
absolutely critical to the success of any customer engagement
strategy.
According to Albert Cucco, the chief client solution officer at
fintech provider Objectway, there is an “argument for a hybrid
approach, where the digital only experience and face-to-face
experience will meet in a service that will address the needs of the
customer in depth but still with the advisor as the central point in
the service.”
Click here to read the article
Will your financial advisor be replaced by a machine? on the
Moneyweb website.
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Regulatory Examinations
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2018 RE Schedules updated |
Please note: Registration cut-off is 11 working days before date of exam. |
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Study Material Update |
The amended
requirements contained in the 2017 Determination of Fit and
Proper Requirements will impact on the content of the study
material for the REs.
Persons who registered to write the regulatory examination ON or
AFTER Tuesday, 3 April 2018 are obliged to write the new version
of the regulatory examination, which will contain the updated
questions. It is very important for these candidates to ensure
that they use updated preparation material that is aligned with
the qualifying criteria in Annexure Four of Board Notice 194 of
2017.
We received confirmation from Inseta that their adjusted study
material will be available before or on 1 April 2018.
Frequently asked Questions
Please
click here to access a list of questions and answers,
including information on what exams to write, the cost thereof,
study material, training and a lot more. |
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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 20 000 visits and approximately 39 000 page views per month. |
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Moonstone boasts an exclusive newsletter mailing list of over 51000
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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Sales/Underwriter:
Venshaw Insurance Administrators, Bellville, Western Cape - We are
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In Lighter Wyn |
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Reports of Mark Twain’s quip about his death are greatly misquoted... |
I recently had a number of enquiries about my perceived departure
from the financial services industry. That is a story for another
day, except to say that I used this phrase quite often in response
to such questions.
Mark Twain was in London in 1897 as part of a speaking tour around
the world. He had considerable debt in the US and hoped to earn
enough money to pay it off.
While he was in London, a rumour started that he was seriously ill.
This was followed by a rumour that he was dead. The story goes that
an American newspaper printed Twain's obituary. Supposedly after
that, when asked about all this by a reporter, Twain said:
The reports of my death are greatly exaggerated.
Here is a copy of the actual document:
You can click here to read the full story:
Reports of Mark Twain’s quip about his death are greatly
misquoted...
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