South African fund manager slapped with R3 million fine

The Financial Sector Conduct Authority (FSCA) has hit Ninety One Fund Managers with a R3 million penalty for violating certain provisions of the Financial Intelligence Centre Act (FICA).

The administrative action includes a financial penalty of R3 million—R500,000 of which is suspended for three years—a directive to remediate the identified contraventions, and a caution against future breaches.

According to the FSCA, the violations by the group are a serious matter, with Ninety One not effectively implementing its Risk Management and Compliance Programme and keeping track of its clients.

The specific provisions that Ninety One fell afoul of relate to the risk rating of its clients, and performing customer due diligence to determine whether transactions were tied to terror financing.

The ghroup also fell foul of provisions that require institutions to identify and verify the identity of clients and beneficial owners.

“At the time of inspection (in 2023) 91FM had not adequately identified or verified some clients and their beneficial owners, nor had it conducted the required ongoing due diligence,” the FSCA said.

Ninety One appealed the FSCA’s initial findings in November 2024, however, it later agreed to settle with the FSCA on the matter.

In light of remedial actions taken by 91FM to date, the FSCA agreed to suspend R500,000 of the R3 million financial penalty for a period of three years, provided the group remain compliant during the period.

“The FSCA views the breaches identified at 91FM as serious, especially considering the size, complexity and risk exposure of 91FM’s business as well as its position and impact in the South African market,” the FSCA said.

“An effective RMCP is essential not only for protecting institutions from financial crime but also for safeguarding the integrity of the broader South African financial system.”

The authority said that proper due diligence of all clients is crucial to help identify and mitigate against suspicious and criminal elements from infiltrating the financial system.

Financial institutions operating within large, international financial services groups are expected to demonstrate a heightened level of vigilance in this regard.

“This sanction serves as a reminder that the FSCA will not tolerate non-compliance with the FIC Act.”

“All accountable institutions are urged to continually review and enhance their anti-money laundering and terrorist financing controls at the highest levels and to conduct thorough risk assessments on a regular basis.”

“Failure to do so will result in firm regulatory action.”