🚨 FSCA Sanctions Ninety One Fund Managers R3 Million for FICA Failures — A Wake-Up Call for Accountable Institutions

The Financial Sector Conduct Authority (FSCA) has imposed a R3 million administrative penalty on Ninety One Fund Managers SA (RF) (Pty) Ltd after a 2023 review exposed critical gaps in the firm’s compliance with anti-money laundering and counter-terrorist financing laws.

This enforcement action underscores the regulator’s firm stance on financial institutions that neglect their duties under the Financial Intelligence Centre Act (FICA), particularly those with significant market influence.

Where Things Went Wrong

The FSCA’s inspection revealed several compliance failures including:

Poor implementation of its Risk Management and Compliance Programme (RMCP). While an RMCP existed, it was not actively or effectively applied in key areas like client risk assessment.

Inadequate customer verification procedures. Some clients and beneficial owners had not been properly identified or validated.

Lack of ongoing monitoring. Routine checks to ensure client information remained up to date were either insufficient or missing.

Weak detection and response to red flags. The firm lacked a clear process for identifying potentially suspicious or terrorism-linked activity.

Regulatory Response and Final Outcome

Although Ninety One challenged the FSCA’s findings initially, it later reached a settlement with the regulator. The outcome included:

Withdrawal of the appeal submitted to the FICA Appeal Board, formal warning and a directive to address all identified weaknesses. Suspension of R500 000 of the total penalty for a period of three years conditional on complete remediation and consistent compliance

Key Lessons for Other Accountable Institutions

This case sends a strong message to all accountable institutions especially those managing large portfolios:

• Policy alone is not protection. An RMCP must be robust enforced and aligned to the real risks your business faces.

• Due diligence is ongoing. One-time verification is not enough. You need systems to track and update client risk profiles regularly.

• Ignoring suspicious behaviour is not neutral. It is negligent.

The FSCA expects firms to take proactive measures to prevent financial abuse. Where these systems fail consequences will follow.

Is Your Compliance Framework Fit for Purpose?

If you have not reviewed your RMCP or due diligence procedures in the past 6 to 12 months now is the time. A reactive approach to compliance could cost more than just money. It could damage your business's credibility and client trust.

FSP Comply Can Help

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