The Financial Sector Conduct Authority (FSCA) has levied a R16 million administrative fine on Ashburton Fund Managers (AFM) for breaching certain provisions of the Financial Intelligence Centre Act (FICA). Despite this, the FSCA conditionally suspended R6 million of the penalty for three years, with the remaining R10 million paid by February 28.
This sanction follows closely after the FSCA imposed a R400,000 fine on Theuns Vosloo Financial Advisory Services (TVFAS) for similar FICA violations. The reasons for sanctioning AFM mirror those of TVFAS.
As the regulator overseeing Financial Service Providers’ (FSPs) compliance with FICA, the FSCA found AFM, a wholly-owned asset management business of FirstRand Limited, to be in violation.
AFM’s non-compliance included deficiencies in their Risk Management and Compliance Programme (RMCP), failure to properly identify and verify clients, and neglecting to screen clients against targeted financial sanctions lists issued by the United Nations Security Council.
The FSCA deemed these violations serious, considering AFM’s business size and potential risk exposure. The Authority emphasized the importance of robust anti-money laundering and counter-terrorist financing measures in maintaining the integrity of the financial system.
To mitigate the penalties, AFM must comply fully with remediation directives and maintain FICA compliance for the next three years. AFM has already initiated a remediation program to address deficiencies, focusing on enhancing financial crime policies and client due diligence processes.
Importantly, AFM assured that clients’ funds and investments remain unaffected by the FSCA’s sanction. They underscored their commitment to supporting regulatory efforts to safeguard the industry, particularly amidst South Africa’s greylisting concerns.
By FCCT Editorial Team
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