From CompliNEWS | Financial Service Intelligence Watch
FSCA initiates verification process for financial institution owners and directors, including criminal records; notes from Compli-Serve
The FSCA has recently issued Communication 27 of 2023, which pertains to the verification of certain designated persons and significant owners of financial institutions, including the verification of criminal records.
Here are some key highlights from the communication:
The FSCA aims to verify specific information about financial institutions, including the criminal records of individuals holding significant positions within these institutions.
This process applies to significant owners, key individuals, directors, shareholders, members, and trustees of authorised Financial Services Providers (FSPs) as defined in the Financial Advisory and Intermediary Services Act. Additionally, it includes significant owners and directors of collective investment scheme (CIS) managers.
Banks, mutual banks, and insurers licensed by the Prudential Authority are excluded from this verification process. The verification for these entities will follow a different procedure. Also, FSPs authorized for non-life and/or health service benefit products only, sole proprietors, partnerships, and members of the controlling body and senior management of Over the Counter Derivative Providers (ODPs) will undergo a separate verification phase.
The FSCA’s objective is to enhance the integrity of financial markets and protect financial customers from potential criminal activity within financial institutions.
An independent service provider, Managed Integrity Evaluation (MIE), has been appointed to conduct the verification process, including qualifications and criminal records. Impacted individuals may be contacted by MIE to schedule fingerprint submissions at a convenient location.
The FSCA is committed to preserving the confidentiality of collected information and will adhere to the Protection of Personal Information Act (POPIA) and related privacy principles.
The verification process is set to commence on November 1, 2023.
Please ensure that your institution is prepared for this verification process, and that you keep records up to date.
For any inquiries related to this communication, please contact RFI@fsca.co.za .
We recommend reviewing the full FSCA Communication 27 of 2023 for comprehensive details.
Notes from Compli-Serve
1.The communication doesn’t explicitly state that you, as an individual, are required to take any immediate action. Instead, it outlines the FSCA’s intention to verify certain information about financial institutions, particularly criminal records of specific individuals who hold significant positions within these institutions. The verification process will be conducted by an independent service provider, Managed Integrity Evaluation (MIE). If you are one of the individuals subject to verification, you will be contacted by MIE to schedule an appointment for fingerprint submission at a designated MIE fingerprint zone or satellite office. It is essential to bring your official identification documents (ID book/card or passport) to the appointment.
2.The communication does not specify that all Key Individuals (KIs), Beneficial Owners, Directors, etc., will be contacted by the outsourced service provider, MIE, starting on November 1st. It mentions that the verification process will encompass certain individuals within financial institutions, such as significant owners, key individuals, directors, shareholders, members, and trustees of authorized Financial Services Providers (FSPs) and significant owners and directors of collective investment scheme (CIS) managers. If you fall into one of these categories and are subject to verification, you can expect to be contacted by MIE.
3.The communication does not specify that the verification process is limited to entities where the Key Individuals (KIs), etc., have indicated that they have a criminal record. Instead, it states that the FSCA will initiate a process to verify certain information about financial institutions, including criminal records of specific individuals. The verification process appears to be a proactive measure aimed at ensuring the integrity of individuals who hold significant positions within these institutions. Whether or not an individual has indicated a criminal record, if they fall within the categories mentioned in the communication, they may be subject to verification by MIE as part of the broader effort to uphold regulatory and supervisory standards.