16th January saw the gazetting of the long awaited Financial Services Laws General Amendment Act, 2013. The various trigger dates needed to make each of the amendments have still to be provided, so for now it is an Act in waiting. It has over 260 changes across a wide spectrum of legislation;
· Pension Funds Act, 1956,
· South African Reserve Bank Act, 1989,
· Financial Services Board Act, 1990,
· Long-term Insurance Act, 1998,
· Short-term Insurance Act, 1998,
· Inspection of Financial Institutions Act, 1998,
· Financial Institutions (Protection of Funds) Act, 2001,
· Financial Advisory and Intermediary Services Act, 2002,
· Collective Investment Schemes Control Act, 2002,
· Co-operative Banks Act, 2007,
· Financial Services Laws General Amendment Act, 2008,
To quote the gazette, the purpose of the Act is to;
“…close regulatory gaps, to effect improvements to certain provisions, to provide for increased supervisory capabilities, to rationalise and align the supervisory functions afforded to the Registrar; and to align the aforementioned Acts with the Companies Act, 2008; to amend the National Payment System Act, 1998, the Medical Schemes Act, 1998, and the Co-operatives Act, 2005, to the extent that those laws impact on the stability of the financial services sector and impede on a holistic regulatory approach and effective supervision; and to provide for matters connected therewith”
We will be reviewing all the planned changes, specifically those that may have an impact on our clients and we will keep you posted on what we find, but one change that leapt out at us was a change to the Short term Insurance Act, which reads as follows. The highlighted words have been added;
“No consideration shall be offered or provided by or on behalf of a short-term insurer, a Lloyd’s broker, a policyholder or any other person, or accepted by any independent intermediary or any other person, for rendering services referred to in the regulations, other than commission or remuneration contemplated in the regulations and otherwise than in accordance with the regulations.’’
It appears that proposed regulation on fees paid by clients to brokers can now be slotted into the legislation. With discussion on the Retail Distribution Review still very much in its infancy it is interesting that the Acts (a similar change is in place under the Long Term Act) are already ready to deal with any resultant regulation on the subject. Of course this may not be needed but the fact that it is there is an indication of the thinking of the regulator.
Also interesting that “other person” is included. Just a catch all phrase just in case? Maybe controls on referral/lead fees? These have been rumoured in the past. This is just speculation on our part but worth a mention.
We will keep you updated as and when we better understand all the changes.
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