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Cape Town - The Financial Intermediaries Association (FIA) has accused the Financial Services Board (FSB) of poor record-keeping after several brokers have apparently mistakenly been fined for allegedly not complying with legislation.
Last week the FSB sent "a few hundred" letters to financial service providers in which fines were imposed for non-submission of annual data.
In terms of the Financial Advisory and Intermediary Services (FAIS) Act, providers of financial services have to submit financial statements and compliance reports every year.
FIA president Arnold van der Linde said the association had been inundated with calls from brokers who believed they had been incorrectly fined.
The internet newsletter ITINews reported that an example of such a letter shows a fine of R8 200 or R10 a day for 820 days being imposed because the 2006 financial position of the broker concerned had not been received. The law requires that the statements have to be submitted within six months of the year-end.
"It's clear that there's a problem with the FSB's register," said Van der Linde.
"We can't say no-one is guilty, but there certainly are brokers who have complied and are being fined, because our phone is ringing incessantly."
Gerry Anderson, the deputy registrar of financial service providers at the FSB, acknowledged there was a problem with the register. He said a few hundred of these letters had been sent out to financial service providers who had failed to submit either their annual compliance report or financial statements, or both, for one of or all of the years 2005, 2006 and 2007.
This was the first year since the FAIS Act came into force that such intense focus was being placed on non-compliance. He said in the first couple of years attention was mainly on licensing financial service providers.
Anderson said that those who reckoned they had been incorrectly targeted should submit proof that their information had been submitted.
The penalty letters were sent out at the end of a process. Financial service providers are notified at least twice, in writing, at the address on the register. This is followed by a telephone call.
They are more than 14 000 financial service providers on the register.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.