Part I SLIDO #FSRAcomments 1 INDUSTRY COMMENTS FINANCIAL SERVICES - - PowerPoint PPT Presentation

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RETIREMENT FUNDS AMENDMENTS

FSRA Act, 2010 Draft Amendments Industry Consolidated Comments

Part I

SLIDO #FSRAcomments

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part 1 (2) Court should not only mean High Court as some determinations maybe made an order of court in any court

• f law as more fully appears

in S76 (3) below. Restricting court to mean the High court will be inconsistent with S76 (3) which states that “A determination

• f

the Ombudsman shall be deemed to be a civil judgment of any Court of law had the matter in question been heard by such Court, and shall be so noted by the clerk, or the Registrar of the Court, as the case may be” “Court” means any court of law in the Kingdom of Eswatini as provided for by S76 (3). Adopted: S76 does not discriminate the forum hence the definition as provided for will lead to an absurdity.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Section 2 To include in the list

• f

“securities the following:

• Global Depository

Receipts

• Real Estate Investment

Trusts (REITS)

• Commercial Paper,

Forex

• etc

Adopted: the second schedule will be updated to include these

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Section 2 To include definition of “stockbroker”

• r “sponsoring broker” in this section,

and if it means the same thing or can be used interchangeably with the term “dealer” (which has been defined in the Act) to state so. A recommendation is made that the definition

• f

“Stockbroker” should include individuals/natural persons as

• well. This will provide competition and

effectively reduce the costs

• f
• brokering. Currently there is very/little

competitiveness and thus brokers charge exorbitant costs. 1. An example of a definition is the following: ‘“stockbroker” means a member of a stock exchange, or any individual or body corporate engaged in the business of buying or selling of securities on behalf of investors in return for a commission.’ The above definition caters for the possibility

• f natural persons and not just juristic persons

playing the stockbroker role. Noted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Definition of financial service (in the slides but not in the Act) The definition states that financial service relates to financial matters rendered to the public which connotes that consumers of financial service is only the public yet there are

• ther

body corporates which are consumers

• f

financial service i.e., retirement funds It is recommended that the clause should read as follows: Financial service means services relating to financial matters rendered to the public or body corporate by a financial services provider; & includes any

• ther

services prescribed by the Authority to be a financial services for purposes of the Act;

• Adopted. – the proposed change will

provide for a more inclusive definition.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part I How do we differentiate those who do not have access to traditional sources of capital Not clear Further clarity is needed on this point Section 5 (i) part (i) Over and above the confidentiality safeguards, Information sharing must be on a “need-to” basis, and notify the concerned parties ….. subject to confidentiality safeguards, establish information sharing mechanisms, through memoranda of understanding or

• therwise, that set out when and

how to share both public and non-public information with domestic and foreign counterparts, provided that information will only be shared on a “need-to” basis; and…. Noted. The FSRA already has Memoranda of Understanding (MoU) with various regulatory bodies (including international and regional bodies) to cater for the sharing of both public and non – public information.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part III 7 There is no representation from the financial services industry Include at least 3 representatives from the financial services industry Not adopted. From a corporate guidance perspective, it is improper for representatives of FSPs to be elected into the Board of the FSRA. 6. Approval

• f

beneficia l owners, controller s &

• fficers

I think the 5% is too low how about above 15% Act must require the Authority to approve: The beneficial owners, controllers &

• fficers of an FSP; & The transfer of

shares or legal or beneficial interest

• f more than 15% in the FSP.

Noted: The benchmarking was against the Competition Act and

• ther

regional legislations. The Singapore Companies Act, section 81 thereof provides for 5%. (that legislation however captures it as substantial interest and imposes disclosure obligation on such a holder.)

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Propos ed Chang e, if any Adopted / Not Adopted

7. Disclosure s to authority I think this will put the

• fficer

in a compromising position. He/she is hired by the FSP for the benefit of the FSP, to make wrongs things right within the FSP. Unlike the auditors, the officer is not independent

• f the FSP he/she cannot therefore turn

against the FSP. I think the authority can just preach the gospel

• f dealing openly with the authority and not pin

Noted: But this is why there is a whistle blowing regime as the report acts as a defense should the wrongdoing be attached to the officer. The whistle blowing regime will be improved to provide the protections that can be afforded to the whistle – blower. Whole not clearly coming up in the existing proposals, the final draft will be upgraded to include a comprehensive whistle – blowing regime.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Section 8 (5) (b) clarify “international financial service provider”, otherwise if this includes parent companies of local companies there is a HUGE conflict of interest. Also, this cannot be at the cost of the industry, so the international bodies themselves should pay for this and related costs Clarify reference to an international financial service provider. Its a typo, the provision relates to the appointment of the FSRA CEO to international financial services bodies such as IAIS, IOPS, IOSCO etc. Adopted. Part III

• 8. (5) b

We cannot clearly see where we have interest to put the CEO on that body It should be a financial services body Noted Part III

• 9. (1) a

Why disqualify a member of parliament Need clarity Not adopted. The FSRA is an implementing agent

• f

legislation passed by Parliament. It wouldn’t

• ffend the principle of separation of powers if

legislators were to be elected in the board of such implementing agents.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part III

• 9. (1) b

Why disqualify officers from the financial service providers Need clarity The FSRA CEO has to be impartial and independent of influence from the industry he

• regulates. To have a CEO pooled from a

person holding an interest in a regulated FSP would invariably lead to conflict of interest. Part III

• 13. (4)

Are we are still dealing with the board or employees? These should be in reference to the board Not adopted, the term “member” extends to cover members of the board of the Authority. The interpretation section does not Part III

• 13. (5)

Need clarity in respect of the previous subsection The comment is unclear and the cited provision did not assist. Clarity needs to be provided.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part III

• 14. (1)

Why the reference to deputy CEO It should be limited to the staff The comment is unclear. The existence of a deputy CEO is not legally impossible, hence its inclusion here. Part III

• 14. (2)

The authority cannot delegate to a higher body –which is the Board member Remove the board member Not adopted. The language refers to the Authority as an institution, hence it is inclusive

• f board members and staff. Therefore, the
• nly higher authority would be the Ministry or

minister. Part III

• 14. (4) c

Why the exclusion of the financial services provider Remove the clause Not adopted, while all-inclusiveness is understood in legislation, the FSRA cannot delegate its function to a supervised entity.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part III

• 19. (2)

There is a misprint

• f

the performance Correct misprint Adopted S21 Supervisory fees must be reviewable maybe after two or three years to avoid locking financial service providers in light

• f

changing working

• environment. This will enable

the Authority to assess the economy

• r

prevailing

• perating

environment and apply levies in a manner that will not cripple the financial sustainability of FSPs in the long run. Include section that states that “Supervisory fees that have been published by notice shall be subject for review once in three years” Not Adopted: S21 provides for imposition of levies after consultation with the FSPs. As and when the revision

• f

levies is deemed necessary, the exercise will be initiated at the instance of the Authority with due consultation.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part IV

• 21. (2) b

What is the meaning

• f

the “have regard” Please clarify To be clarified at presentation. However, the literal meaning is that the Authority may consider or reject such representations. Part IV

• 21. 5

The interest

• n

the payment

• f

interest and

• n

the interest payable

• n

default Not in the spirit of the legislation imposed on the credit providers Not adopted. All arrear levies ought to accrue interest. Part IV 23 (1) Why are the estimates not submitted to the relevant stakeholders It should accommodate the stakeholders as the direct beneficiaries of the Authority Not adopted: the industry players are indirectly affected by the expenditure as the supervisory levies and fees correlate

• thereto. Consider the comment. However, the industry players

and their interests are represented by the Board and the Ministry of Finance who have veto powers in the budgeting

• process. Further the Public Enterprise Unit (PEU) further

validates the budget proposed by the FSRA.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part IV

• 27. (1)

Why are the annual reports not submitted to the relevant stakeholders It should accommodate the stakeholders as the direct beneficiaries of the Authority This provision already dictates that the financial report has to be published by public gazette. S30 (2) and (3) The authority must engage the financial service providers before the rules and administrative penalties for low level offences are published by Notice published in the Gazette. Propose S30 (2) to read as thus; (2) The Authority may also make rules to stipulate and amend administrative penalties applicable to service providers for low level offences against this Act and Financial Service laws. Before imposing rules and administrative penalties referred to in subsection (1), the Authority shall bring the proposed rules and administrative penalties to the attention

• f

financial services providers, together with a statement that representations about the proposed rules and administrative penalties may be made to the Authority within a specified time Noted: the FSRA already has in place a RIA framework that governs the consultation

• f

stakeholders

• n

proposed regulation reform. The proposal simply codifies the process.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part V

• 31. (1)

f there was no comment provided. Section 33 Consultations with the industry are vital to harmonize relationships with the authority A proposal that consultations be made by the authority prior to codes and guidelines being issued would be vital Noted 34 (4) (b) The Act must define ‘person’ (natural

• r

juristic) Adopted.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Section 34 (4) Penalty of E2,000,000 is too big compared to E10,000 in the 2010 Act. E10,000 doesn’t become E2,000,000 in 10 years. Even half of that amount (E1,000,000) is too big for a penalty that could be charged to a person in their personal capacity. E500,000 is more of an alignment Not adopted. The rationale is that the pillars of any penalty regime can be

• utlined

as dissuasiveness, effectiveness, proportionality and punitive. 36 bis. (1) It seems to be in contradiction to section 36 (2), as it now talks to annual sustaining fees What is the meaning of the sustaining fees? Must be defined in definitions section. This is the fee payable to maintain perpetual license. S36 bis What are annual sustaining fees? Remove annual sustaining fees Licensing divisions to give guidance: the question seeks clarity on the rationale of perpetual licenses where the entities will still pay sustaining fees.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

S 36 (6) Fit and Probity The proposed section does not make reference to rehabilitation which gives the Authority the power to assess each case on its merits as well as

• ffer

guidance to FSPs on what can render a person unfit and improper within the industry Secondly, the definition of key personnel needs to be revised, it still refers to Schedule 2 of the 2010 FSRA Act, furthermore, it refers to

• fficers but still lists key

personnel as Directors and Managers who according to the definition

• f

Officer are already included. With regards to the fit and proper requirements, it is recommended that a clause be added which may read as follows: “Where key personnel is found to be unfit at commencement of the employment relationship, the FSP shall assess the extent of the potential employees’ unfitness and in doing so shall apply the Authority’s rehabilitation standard” With regards to the definition of key personnel, it is recommended as follows: “key personnel” refers to a person who manages or controls the activities of a licensed financial services provider and includes: (a) significant shareholders of non-bank financial service providers as listed in schedule 2 of the FSRA Act, 2019 ; (b) directors of non- bank financial service providers as listed as in schedule 2 of the FSRA Act, 2019; (c) officers and managers of non-bank financial service providers as listed in schedule 2 of the FSRA Act, 2019; and (d) any other person as determined by the Authority. Partially adopted: the wording should be redrafted to consider the proposed amendments and the new players as included in the second schedule. The declaratory powers of the FSRA should be considered when taking into account the persons deemed as key functionaries. Further, the comment

• n

the rehabilitation powers of the FSRA is valid. In the current provision, there is no indication that a person, previously declared unfit, can be rehabilitated and admitted back into the financial services industry.

Adopted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

S37bis

The proposed clause provides that; No shares or any legal beneficial interest in a licensed FSP shall be issued or transferred except with the approval of the Authority”. It is not clear what a legal beneficial interest means in this context, as is it is too broad. Some FSPs receive funding in order to transact i.e., Development Finance Corporation (DFI). Such funders would have a legal beneficial interest on the DFI due to the fact that there is an expected return in terms of interest from funds lent to the DFI. It would therefore be too onerous and an administrative burden to have to seek approval of the Authority to enter into funding agreements hence the request is that we limit the need to seek for the Authority’s approval when dealing with transfer of shares issues.

It is recommended that legal beneficial interest be removed and replaced with “…or any instrument seeking to transfer

• wnership

whether in full or in part shall be issued…”. Not Adopted: the interest in this regard should refer to an instrument conferring title /

• wnership

in the FSP. The provision may be retained provided that the definition

• f

“beneficial interest” is defined. There is a danger in limiting the definition of “beneficial” interest to

• nly instruments conferring title /
• wnership.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

S40 (2)

This section is prone to being

• misinterpreted. The section states

that the Authority may revoke a license in the case of an individual where he or she has been subjected to the list specified. It is not clear where the license to be revoked is that of the individual in which case it would be an individual agent, representative etc, or whether the license to be revoke is that of the FSP where the individual belongs. Is the intention that when key personnel is rendered insolvent then the FSP license is to be revoked? If not, it is recommended that the section be specific as to whose license will be revoked. That person ceases to carry on the business for which he was licensed

The proposed section may be: “The Authority may revoke or suspend a license in respect of an individual

• r

juristic person for a specified period as follows:” a) in the case

• f

a natural person if … b) in the case

• f

a juristic person if… Not adopted, the existing legislation already has this distinction.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019

Comment (s) Proposed Change, if any Adopted / Not Adopted

This section is not consistent to section 40. 1 (b) The section should clarify whether company license revocation occurs when a company has been wound up or is the process of being wound

• up. The FSRA should seek the opinion of the

liquidator on the status of the company assets. Noted: it is proposed that a liquidation framework be outlined in the

• Act. The framework can address the voluntary liquidation process,

appointment of liquidators and such framework should align / supplement the provisions of the Companies Act, 2009. What comfort does the FSP get from ‘being heard’ by the authority. The comment is vague. However, in terms of section 33 of the Constitution of the Kingdom of Swaziland Act 1/2005, being afforded an opportunity to be heard has been elevated to the status of a constitutional right. The comforts is that the FSP will have an

• pportunity to influence the mind of the FSRA before any adverse

decision is taken against it. The period of 3 months may be too long from a business perspective. 30 days may be more conducive Not adopted

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RETIREMENT FUNDS AMENDMENTS

FSRA Act, 2010 Draft Amendments Industry Consolidated Comments

Part II

SLIDO #FSRAcomments

22

INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

PART V11 (46) BIS 1 WHISTLE BLOWERS – ADDITIONAL CLAUSE 46bis (1) In accordance with Statement (m) of the Statements of Principles (Section 46), read with Section 60

• f this Act, an authorized financial services provider and
• fficers of an authorised financial services provider, as

described in Section 2; are obliged to re laws and/or conditions of the authorised financial services providers license as soon as is practicably known

(2)

An official or any person who voluntarily provides the Authority with original information that leads to successful enforcement action by the Authority is deemed to be a whistle blower, who qualifies for protection against retaliation by being shielded from exposure or administrative action. a) How will FSRA ensure the whistle-blower is protected? b) How will FSRA ensure confidentiality

• n

reported issues? Noted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

49 (c) Typo: ‘twelve’ years should read ‘three’ years Adopted Part VIII Section 49(2)(c) Inconsistency between the wording and the numbers in brackets. …for a term not exceeding twelve (12) years… Adopted 57 (1) Possible typo: ‘material particular’ Adopted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Part VIII Section 57(1) Word “years”

• mitted

from the wording. …a term not exceeding ten (10) years… adopted 59 (1) We request for prior consultation prior to publishing of any adverse information relating to the FSP Not adopted: publishing is at the instance of consumer protection.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Propose d Change, if any Adopted / Not Adopted 60(2) What is the rationale for requiring reports from former

• fficers (directors, managers,

employees) of the FSP This power is necessary in the course of investigations where the information required is at the instance of a former director / manager. The provision to be redrafted to capture the true spirit of the

• bligation sought to be imposed

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Section 60 (3) Section 87 (3) This is a fine that is clearly directed at a natural person. This would render a person insolvent for the rest of their working lives. Please review. E100,000 (up from E5,000), and two years, (up from 1 year). Noted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Section 60(4) Administrativ e, Legislative development Returns The Timeframes are considered as not adequate for purposes of filing especially because the information sought is now more detailed leading perpetual requests for extensions particularly because the Authority may impose administrative penalties under Section 68 (2) (c) for late, incomplete

• r

misleading returns. Therefore adequate time is needed to ensure correctness of information in light of volumes. A humble proposal for 120 days for annual returns and 45 day for quarterly returns is being made. Not adopted.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted 60(4)(a) The requirement to prepare and submit monthly reports to FSRA will be too onerous on the FSP’s Consider maintaining the quarterly and annual reporting requirements Noted, sector to advise. 61(2)(b)(ii) Typo: …best of (his) or her knowledge… Adopted 61 bis (1) (c ) Typo: --- electric instead of “electronic” Adopted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Record Keeping Section 61 bis Generally, files are kept for five years after the conclusion of any matter. Space constraints and industry practice is more aligned to the fact that 5 years is a reasonable period to allow anyone even those with concerns to refer to kept files after conclusion. Volumes will also be a constraint should the files be kept for more than 5 years. We propose 5 years to be the period to keep files

• Noted. The proposed 7

years emanates from recent international best practice. 61 (1) bis (a) There is a reference to only “his” Not adopted, the provision relates to his or hers 61 bis (1) (c ) Typo: --- electric instead of “electronic” Adopted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

61 bis (4) (c ) Need clarity

• n

what is meant by amount purchased or sold Adopted, consider redrafting to capture the intention of the FSRA 63 (1) The reference to “ a person is about to do an act that would be an offence” How would the FSRA have determined the intended

• ffence?

And this may cause constant visit to the FSP Not adopted, the law recognizes inchoate

• ffenses

and they are determinable at any given time. Therefore, some offenses need not be completed for them to be actionable / provable. 63 (2) Is it not the duty of the

• ne

instigating the inspection to bear the cost

• f

the investigator? Comment noted; however the provision is clear as to the parameters upon which such cost may be borne by the party being investigated.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

S63bis It is recommended that investigations should not be done under conditions of secrecy as this will cause FSP performance anxieties and feelings of being under watch even in cases where there are no investigations being done. We are not aware

• f

any problems with the existing status quo as we believe no entity has any power to block the Authority’s right to investigate. We propose that s63 bis be removed. Partially adopted: consider redrafting as secrecy cannot be a component

• f

investigations. The right against self- incrimination determines that a person who is being investigated knows and decides whether or not to volunteer information. The parameters of “secrecy” are not clear, propose we redefine this provision. Redraft to refer to an instant where FSRA will not publicize the investigation but will inform the entity under investigation. Not use the word ‘secretly’.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Section 63bis Inspections are part of the core mandate of the FSRA, and therefore cannot be treated as isolated incidents. The FSPs cannot be penalized if the FSRA lacks a skill

• r

capacity or capability to inspect. Section 63bis (2) must be removed

• Noted. However these

inspections relate to where there is a criminal element which requires the specialized skill of forensics and or auditors. S68 (2) (c) The increase of penalty for failure to timely submit any return to the Authority is very high Reduction

• f

penalty from E50,000 to E25,000 per day Noted, this provides for the maximum penalty that can be imposed. 68 (2) (c ) Typo error ---E50 000, in words written as five thousand Adopted Part X Section 68(2)(c) Inconsistency between the wording and the numbers in brackets. …not exceeding five thousand Emalangeni (E5,000)…

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

S68(2) Amounts And wording do not tie up. S68(2) (c) to submit to the Authority within any period specified by or under this Act any statement, report, return

• r
• ther

document

• r

information required by or under this Act to be so submitted, be an amount not exceeding five thousand Emalangeni (E50,000), or such

• ther amount prescribed by the Authority, for

every day during which the failure continues;

• r,

(d) any contravention of this Act or a financial services law, an amount not exceeding twenty five thousand Emalangeni (E10,000) for each day during which a contravention continues. Propose this should read: S68(2) (c) to submit to the Authority within any period specified by or under this Act any statement, report, return or other document

• r information required by or under this Act

to be so submitted, be an amount not exceeding five thousand Emalangeni (E5,000), or such other amount prescribed by the Authority, for every day during which the failure continues; or, (d) any contravention of this Act or a financial services law, an amount not exceeding ten thousand Emalangeni (E10,000) for each day during which a contravention continues. Noted, the drafter to reconcile the amounts in word and those in figures.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted Section 68(2) ( c) and (d) Section 68(2) (d) Late submissions and Contraventions of the law are not always intentional. The penalties are so high leaving no room for situations outside control which lead to any non- intentional late submissions and contraventions of the law. We propose E50 000.00 and E1 000.00 per day. We propose E15 000.00 and E1 000.00 per day. Section 68(2) ( c) and (d) Noted. The penalties provide for the maximum sanction imposable. Discretion will be used for lesser sanctions.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted 68 (2) (d) Typo error ---- E10 000, in words written as twenty five thousand Adopted 68 (5) Clarity on which rules are referred to other than the

• ne under review

Comment noted, this is a general power of the Authority to make rules regarding penalties. 68 (6) There should be consultations

• n the time limits of imposed

fine payments. Noted, however imposition of fines is a discretionary power. Through the hearing procedure, as well as mitigation, the FSPs play a part with respect to the factors to be considered in the imposition of a particular fine.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted 68 (5) Clarity on which rules are referred to other than the

• ne under review

Comment noted, this is a general power of the Authority to make rules regarding penalties. 68 (6) There should be consultations

• n the time limits of imposed

fine payments. Noted, however imposition of fines is a discretionary power. Through the hearing procedure, as well as mitigation, the FSPs play a part with respect to the factors to be considered in the imposition of a particular fine.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted S71(1) The sub-sections of 71(1) have been

• mitted

and is incomplete without them.

• 71. (1) The authority shall have the

power to appoint, at the expense of a financial services provider, a curator: Prior wording to be retained. Not adopted PART XII

• Ombudsman’s powers: To

cure this, the New Act provides for the power of the Ombudsman to conciliate, mediate and to make formal recommendations to the parties for settlement. Recommend that Ombudsman should make formal and final recommendations. Noted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted XII Section 75 (6) Line 2 Remove the words “for review” appearing between the words “Court” and “,” Removal of the words “for review” Noted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

S87

While the purpose of extending liability is supported, this clause is too severe being applied to directors and officers to this extent. S87(2) A director or officer of an entity regulated under this Act who:

(a) contravenes this Act; (b) participates in or assents to the contravention; or (c) acts negligently in the course of duties of that director or officer, is liable in the personal capacity of the director or officer for all damages which the entity, its shareholders or any other persons sustain in consequence of the negligence or wrongdoing. (3) Any director or officer of an entity regulated in terms of this Act who fails to take all reasonable steps to secure compliance by the entity with any requirement of this Act commits an offence and is liable,

• n

conviction, to a fine not exceeding two million Emalangeni (E2,000,000) or to imprisonment for a period not exceeding 10 years or to both. Propose this be retained as before amendment, Not adopted

40

INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted S89 (1) (a) The industry to be also consulted by the Minister before making regulations Subsection 1 to read as thus; “The Minister may, after consultation with the Authority and financial service providers, make regulations as to: Adopted: consultation is important at all levels of formulation

• f regulation.

S89 (1) (b) Correct spelling for Minister as it is written incorrectly n/a Noted

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

90 Is there any

• mitted

information? The comment is vague

42

INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted Section 35 (2), Section 57 (1), Section 62 (8) Section 65 (2) Section 66 Section 70 (5) Similar comments as above. E2,000,000 is much more than profits after tax written by many local insurers, especially for life business. E2,000,000 in the Eswatini context is a large amount and an even bigger amount compared to E150,000. Same goes for the term of imprisonment. Please review the amount. E500,000? Two to three- year imprisonment? Noted.

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INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY ACT AMENDMENTS, 2019

Part Comment (s) Proposed Change, if any Adopted / Not Adopted

Second Schedule To include in the list of Non-Bank Financial Services Providers (FSPs) the following: To add to the list of representatives:

• 1. Stockbroker/Sponsoring Broker
• 2. Day Trader,
• 3. Forex Trader,
• 4. Designated Agent
• 5. Associate member

Authorized Dealer’s Representative” or “ADR” Noted