I recently counted the number of Covid regulations and they number at approximately 147 different documents on the Government Website. That is a ridiculous amount of new rules that I suspect many people transgress every day without even knowing it - and I do not blame them.

The FSCA, Reserve Bank and Prudential Authority issued a new set of Covid Measures for FSP's to comply with under level 3 lockdown. These rules also allow FSP's to actively deal with clients in a prescribed manner, which I suppose is a silver lining. Please see the full document here. ​We've tried to take the essence out of it as much as possible to show you what you need to comply with in this post.

Apart from what we detail in this post please remember that financial institutions must comply with the Occupational Health and Safety Directives issued by the Minister of Employment and Labour in terms of the Regulations regarding the precautionary measures in workplaces. You can find these regulations here.

The Summary
Where face to face meetings or physical interaction with customers are unavoidable, in order to protect both the employees of the financial institution as well as financial customers, these meetings should be held at premises where appropriate health measures and social distancing can be implemented, such as-

1. suitably equipped offices of the financial institution;
2. the place of work of the customer, or
3. other premises where appropriate health measures can be implemented and monitored.

A financial institution should not hold meetings at the homes of clients, or visit financial customers at home for purposes of providing financial services to them.

Where exceptional circumstances require that a meeting takes place at the home of a customer, the following protocols must be followed:

1. An employee of a financial institution should only visit a customer’s home after confirming an appointment with the customer, and should not arrive at a customer’s home without prior notice.
2. Both the customer and the employee are required to complete a risk questionnaire prior to the visit to establish if either of them is vulnerable, or whether the financial customer resides with a vulnerable person, or if either of them is at risk of infecting others. Only if both are not vulnerable or at risk of infecting others may the appointment at the customer’s home continue. If the appointment occurs more than one day after the telephonic questionnaire is completed, the financial institution should make a follow-up confirmation on the day of the appointment to ensure that the circumstances have not changed.
3. The employee should perform a non-contact temperature screen on him or herself in the presence of the customer as well as on the customer.
4. The employee should carry sanitiser, and a spare mask which should be offered to the customer on arrival if the customer does not have a mask. The consultation should not continue unless the customer has sanitised his or her hands and is wearing a face mask. The customer should be informed in advance of this requirement.
5. Social distancing should be practiced as far as possible whilst completing forms, limiting the time close to the customer as far as possible.
6. A record that the above measures were implemented must be kept in respect of each customer.

A financial institution must upon request by the Authorities submit the name of the COVID-19 compliance officer designated under Regulation 47 and its workplace plan as contemplated in Regulation 47(1)(b) of the Regulations to the Authorities.

What is this?
We've recently received some calls from clients on the FSTC (Financial Sector Transformation Council) reporting BBBEE communication sent out by the FSCA on behalf of the FSTC. See the original communication here. To be clear, the FSTC is not to be confused with the FSCA. Although this does not fall in the realm of FAIS compliance we thought it is a good idea to perhaps just summarise the requirements and application thereof. Usually the BEE components of a business is handled internally/with HR or accountants in consultation with Verification Agents (BEE Compliance Officers) if need be.

The FSTC  is mandated to obtain BBBEE statistical data from entities operating in the financial services sphere on their progress relating to BBBEE. They send out a request once a year for statistical data so they can compile their annual report on the progress of Financial Institutions with the Financial Sector BBBEE codes.

Who does this apply to?
The sectors/companies asked to report are:

1. ​Banking;
2. Long-term insurance;
3. Short-term insurance;
4. Re-insurance;
5. Retirement fund administration;
6. The management of collective investment scheme assets;
7. Financial services intermediation and brokerage (FSP's);
8. Public entities involved in the financial sector e.g. DBSA, Land Bank;
9. Asset management, consulting and administration;
10. Private equity, venture capitalist and impact investors;
11. Management of investments on behalf of the public, including, but not limited to, private equity, members of any exchange licensed to trade equities or financial instruments in South Africa and entities listed as part of the financial index of a licensed exchange;
12. Underwriting management agents; and
13. Industry Trade Associations operating in the sector.

This Amended FSC does not apply to:

1. Natural or juristic persons who do not have trading operations in the Republic of South Africa;
2. The trading operations of natural or juristic persons outside the Republic of South Africa; and Managers of investments on behalf of the public who are not subject to regulation by the FSCA, such as lawyers who hold money in intermediate trusts etc.

How do I report if I need/want to?

1. Exempted Micro Enterprises must submit an affidavit confirming their annual turnover and level of black ownership to the FSTC.
2. Financial Institutions that meet the requirements of a Qualified Small Financial Institution (QSFI), that has an annual turnover of more than R10 million but less than R50 million, and are more than 50% black owned (where there is an existing equity deal in place) or at least 51% black owned (for all deals concluded after the commencement date of the amended Code) or 100% black owned, should submit an affidavit confirming their annual turnover and BBBEE status to the FSTC.  
3. Financial institutions with an annual turnover of R50 million or more must have their BBBEE status verified by a Verification Agent. This agent must submit a verification certificate together with the full verification report to the FSTC within 30 days of issuing the verification certificate. 

FIs were requested to submit the full final verification reports, to the FSTC no later than the end of the business Friday, 05 June 2020. All reports are to be submitted electronically via email to reporting@fstc.org.za with the subject: FSTC 2018/19 Report– (name of entity). In the past, however, they did allow entities to still submit after this date, however we cannot guarantee this.

Should an entity encounter difficulty in providing the above-requested information they should contact the FSTC at reporting@fstc.org.za, or call (011)838 6696 or get in touch with their respective Trade Associations for more clarity

​Any Penalties?

1. All entities that do not submit the required reports to the Council will automatically be discounted by one BEE level in the next rating period.
2. The Council also reserves the right to name institutions that have not submitted reports on a list, however we have not seen them doing so yet.