As South Africa attempts to get itself off the notorious ‘grey list’, the Financial Sector Conduct Authority (FSCA) continues to up the ante in its fight against non-compliant units within the country’s financial sector.<\/p>\n\n\n\n
According to its recently published 2023\/24 Integrated Report, the FSCA imposed approximately R943 million in administrative penalties on 31 people for the year ending 31 March 2024 \u2013 a significant increase from the previous year\u2019s R100 million placed on 44 people.<\/p>\n\n\n\n
The FSCA, which plays a role in regulating the financial sector and protecting consumers, achieved 80% of its overall targets and 90% of those in its Regulation Plan. <\/p>\n\n\n\n
The Authority also maintained a clean audit, generated over R1 billion in revenue, and reported a R150 million surplus.<\/p>\n\n\n\n
Among other reasons for the increase in penalties is the FSCA attempting to meet requirements for South Africa to get off the Financial Action Task Force’s (FATF’s) ‘grey-list’.<\/p>\n\n\n\n
In February 2023, the FATF greylisted South Africa due to inadequate measures against money laundering, terrorist financing, and proliferation financing.<\/p>\n\n\n\n
Being on the grey list means the country must address strategic deficiencies within specified timeframes and is subject to intensified monitoring.<\/p>\n\n\n\n
The FATF has highlighted the need for South Africa to implement a robust strategy to counter terrorism financing, enhance anti-money laundering efforts, and improve the investigation and prosecution of complex financial crimes.<\/p>\n\n\n\n
Unathi Kamlana, Commissioner of the FSCA, said that “these decisive enforcement actions demonstrate that we stand ready to take deterrence actions to protect the integrity of the financial sector in line with our strategic objective of acting decisively and visibly against misconduct.”<\/p>\n\n\n\n
During the 2023\/24 financial year, Kamlana said that the FSCA navigated a challenging economic landscape “marked by rapid technological advancements, evolving regulatory demands, and the implications of South Africa being placed on the FATF \u2018greylist\u2019.”<\/p>\n\n\n\n
“The low growth and high-interest rate economic environment, coupled with the rising cost of living, has affected consumers\u2019 purchasing power and increased financial pressures on households, leading to higher debt levels, reduced savings, and an increased risk of consumer vulnerability.<\/p>\n\n\n\n
“Technological advancements are changing the way financial services are provided, offering new opportunities for innovation but also introducing new risks requiring vigilant oversight,” added Kamlana.<\/p>\n\n\n\n
The FSCA Commissioner said that focus on increasing enforcement has not only resulted in an 843% increase in the value of penalties but also the:<\/p>\n\n\n\n
Some other highlights from the 2023\/24 financial year include the fact that 668 Financial Services Provider (FSP) licenses were issued, with a portion of them for Crypto Assets Service Providers;<\/p>\n\n\n\n