JOHANNESBURG – The Financial Services Board’s (FSB) enforcement committee has handed Thebe Stockbroking a R500 000 fine – the stockbroker’s first fine – for failing to strictly comply with certain ‘Know Your Customer’ provisions in the Financial Intelligence Centre Act (FICA), pertaining mostly to dormant accounts.
Thebe admitted its wrongdoing and agreed to settle the matter with the FSB, according to a statement released by the regulator on Friday.
According to the statement, many of the non-compliant accounts were already dormant when the relevant KYC provisions in FICA came into operation.
Saleem Symallin, Thebe CEO, explains that after conducting a full-scale audit of all its client files in 2010, the stockbroker realised that some files did not contain all the required FICA documentation.
“We informed our regulatory bodies and embarked on an extensive exercise to obtain the outstanding information. This exercise involved freezing all accounts that were deemed to be non-compliant, including dormant accounts. In addition, we installed a new call centre with additional staff to contact all clients with outstanding documentation,” Symallin said.
He noted that this process has been very successful and there are now a negligible number of accounts – many of which are dormant accounts of clients who cannot be reached – that do not contain all the required documentation.
“We give all our clients the assurance that no client has been affected by this settlement agreement as the contemplated amount has long since been provisioned for in Thebe’s books of account,” Symallin commented.
According to the FSB, the administrative penalty accounts for the fact that Thebe made a concerted effort to rectify non-compliance and has largely been successful in doing so. That Thebe disclosed the irregularities to the JSE and has implemented systems to ensure future compliance also counted in its favour, the FSB said.