THE financial services industry has seen an increase in the number of debarment cases over the past year. The main reason for this is that qualification and examination fraud was discovered by the Financial Planning Institute of Southern Africa (FPI), which has required the Financial Services Board (FSB) to take action against a large number of individuals.
The FSB reports that the fraud case found that FPI employees and a number of candidates were involved in a dishonest scheme that resulted in the falsification of their examination and/or qualification results and the issuing of fraudulent certificates.
An initial investigation was conducted by the FPI, and criminal charges were laid against the implicated FPI employees.
The FSB was informed of the matter in 2014 and launched an inspection to gather evidence against 120 representatives and key individuals who had allegedly benefited from the fraud. Debarment action commenced in 2015 and is ongoing, with at least 60 cases still under way.
The FSB also conducted an audit of the FPI examination body’s internal security measures, systems and processes. Following the audit, the FSB recommended additional security protocols to ensure that a similar situation does not arise in the future – recommendations that the FPI has adopted and implemented.
The FSB says it continues to work closely with the recognised examination bodies, to ensure that all security measures are fully functional at all times.
The FSB regards the regulatory examinations and the authenticity of qualifications as a critical component of the competency requirements for financial services providers, and as such “the integrity of the examinations and qualifications must be protected at all times”, it says.
CURATOR FOR PENSION FUND
Following the recommendation of the statutory manager of the Bophelo Beneficiary Fund and Bophelo Benefit Services, the Registrar of Pension Funds has appointed a curator for the two entities, according to a media release this week by the FSB.
Juanito Damons is a respected and experienced lawyer, and is well placed to perform this function, the FSB says.
It added that, in taking this step, the registrar’s top priority remains that of protecting the clients and beneficiaries of the Bophelo Beneficiary Fund.
After noticing concerning behaviour and noting several media allegations against the Bophelo Beneficiary Fund and Bophelo Benefit Services, the registrar appointed a statutory manager, Henry Msimang, to investigate the two entities.
Msimang stepped down after submitting his report to the FSB.