From CompliNEWS | Financial Service Intelligence Watch
FSCA suspends over 1 000 licences and imposes record fines of almost R1bn
The Financial Sector Conduct Authority (FSCA) has reported a significant increase in its regulatory actions for the 2024 financial year. In its latest annual report, the FSCA revealed that it suspended the licences of 1 061 financial service providers and debarred 156 individuals. Additionally, fines and penalties totalling R943 million were imposed on 31 persons, a sharp rise compared to the R100 million levied on 44 individuals in 2023.
Moneyweb reports that one of the most notable penalties was the R475 million fine imposed on the late Markus Jooste, former CEO of Steinhoff International, following an investigation into misconduct at the company. Jooste tragically took his own life the day after the fine was issued on 20 March.
Key Highlights of the FSCA’s Regulatory Actions:
New Investigations – 518 new cases were opened, 371 were finalised, and 426 are ongoing.
Licensing Activity – 668 licences for financial service providers were authorised, and 59 licences were approved for crypto asset service providers (CASPs).
Scam Alerts – 104 scam alerts were issued.
The FSCA noted that the majority of its investigations in the past year centred on unauthorised financial advisory services and unregistered insurance businesses. Many of the debarments were related to dishonest conduct.
Crypto Asset Licensing
Crypto assets were officially recognised as financial products under the Financial Advisory and Intermediary Services (FAIS) Act as of 1 June 2023, marking the beginning of a new regulatory framework for the crypto industry. Existing crypto asset service providers were required to apply for licences by 30 November 2023, with 366 applications received during the reporting period. By the end of June 2024, over 138 licences had been approved, reflecting the FSCA’s efforts to curb crypto-related scams.
Efforts to Exit the Grey List
FSCA Commissioner Unathi Kamlana highlighted the organisation’s intensified efforts to combat financial crime and support South Africa’s bid to exit the Financial Action Task Force (FATF) grey list. This included strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) capabilities by hiring nine additional staff members.
Kamlana noted that these efforts are part of a broader, multi-stakeholder initiative led by National Treasury. Enhanced capacity at the FSCA has led to more frequent inspections and the issuance of several administrative sanctions related to AML/CFT breaches. South Africa aims to address its remaining deficiencies in time for reassessment by the FATF in February 2025.
FSCA Financial Performance
The FSCA’s revenue grew by 6% to R1.1 billion in the 2024 financial year, with the financial advisory, pensions, and insurance industries contributing 81% of this in the form of levies. The authority also reported a 10% decrease in operating costs, partly due to the adoption of a hybrid working model and reduced office space rentals.
As the FSCA continues its oversight of the South African financial sector, its increasing focus on enforcement, financial crime, and regulatory compliance will play a crucial role in safeguarding the integrity of the industry.