FSRA Act, 2010 Draft Amendments Industry Consolidated Comments RETIREMENT FUNDS AMENDMENTS Part I SLIDO #FSRAcomments 1
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted “Court” means any court of law in the Part 1 (2) Court should not only mean Adopted: S76 does not High Court as some Kingdom of Eswatini as provided for discriminate the forum determinations maybe made by S76 (3). hence the definition as an order of court in any court provided for will lead to an of law as more fully appears absurdity. in S76 (3) below. Restricting court to mean the High court will be inconsistent with S76 “A (3) which states that determination of the Ombudsman shall be deemed to be a civil judgment of any Court of law had the matter in question been heard by such Court, and shall be so noted by the 2 clerk, or the Registrar of the Court, as the case may be”
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted • Section To include in the list Global Depository Adopted: the “securities 2 of the Receipts second schedule • following: Real Estate Investment will be updated to Trusts (REITS) include these • Commercial Paper, Forex • etc 3
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted To include definition of “stockbroker” Section 1. An example of a definition is the following: Noted or “sponsoring broker” in this section, ‘“ stockbroker” means a member of a stock 2 and if it means the same thing or can exchange, or any individual or body corporate be used interchangeably with the engaged in the business of buying or selling of term “dealer” (which has been defined securities on behalf of investors in return for a commission . ’ in the Act) to state so. A recommendation is made that the “Stockbroker” definition of should The above definition caters for the possibility include individuals/natural persons as of natural persons and not just juristic persons well. This will provide competition and playing the stockbroker role. effectively reduce the costs of brokering. Currently there is very/little competitiveness and thus brokers charge exorbitant costs. 4
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if Adopted / Not Adopted any Adopted. – the proposed change will Definition of The definition states that It is recommended that financial financial service relates to the clause should read provide for a more inclusive definition. service (in the financial matters rendered to as follows: Financial slides but not the public which connotes service means services in the Act) that consumers of financial relating to financial service is only the public yet matters rendered to the there are other body public or body corporate corporates which are by a financial services consumers of financial provider; & includes any service i.e., retirement funds other services prescribed by the Authority to be a financial services for purposes of the Act ; 5
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if any Adopted / Not Adopted Part I How do we differentiate those who Not clear do not have access to traditional Further clarity is needed on this sources of capital point … .. Section Over and above the confidentiality subject to confidentiality Noted. 5 (i) safeguards, Information sharing safeguards, establish information The FSRA already has must be on a “need - to” basis, and part (i) sharing mechanisms, through Memoranda of Understanding notify the concerned parties memoranda of understanding or (MoU) with various regulatory otherwise, that set out when and bodies (including international how to share both public and and regional bodies) to cater for non-public information with the sharing of both public and non – public information. domestic and foreign counterparts, provided that information will only be shared on a “need - to” basis; and … . 6
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, if Adopted / Not Adopted any Part III There is no representation Include at least 3 representatives Not adopted. 7 from the financial services from the financial services industry From a corporate guidance perspective, it is industry improper for representatives of FSPs to be elected into the Board of the FSRA. 6. I think the 5% is too low how Act must require the Authority to Noted: Approval about above 15% approve: The benchmarking was against the Competition Act of The beneficial owners, controllers & and other regional legislations. The Singapore beneficia officers of an FSP; & The transfer of Companies Act, section 81 thereof provides for 5%. l owners, shares or legal or beneficial interest (that legislation however captures it as substantial controller of more than 15% in the FSP. interest and imposes disclosure obligation on such a s & holder.) officers 7
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Propos Adopted / Not Adopted ed Chang e, if any 7. I think this will put the officer in a Noted: Disclosure But this is why there is a whistle blowing regime as the compromising position. He/she is hired by s to report acts as a defense should the wrongdoing be the FSP for the benefit of the FSP, to make authority attached to the officer. The whistle blowing regime will be wrongs things right within the FSP. Unlike improved to provide the protections that can be afforded the auditors, the officer is not independent to the whistle – blower. Whole not clearly coming up in of the FSP he/she cannot therefore turn the existing proposals, the final draft will be upgraded to against the FSP. include a comprehensive whistle – blowing regime. 8 I think the authority can just preach the gospel of dealing openly with the authority and not pin
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Adopted / Not Adopted Change, if any “international Section clarify financial service Clarify reference to an Its a typo, the provision relates to the 8 (5) (b) provider”, otherwise if this includes international financial service appointment of the FSRA CEO to international provider. financial services bodies such as IAIS, IOPS, parent companies of local companies IOSCO etc. there is a HUGE conflict of interest. Also, this cannot be at the cost of the Adopted. industry, so the international bodies themselves should pay for this and related costs Part III We cannot clearly see where we have It should be a financial Noted 8. (5) b interest to put the CEO on that body services body Part III Why disqualify a member of parliament Need clarity Not adopted. 9. (1) a The FSRA is an implementing agent of legislation passed by Parliament. It wouldn’t offend the principle of separation of powers if legislators were to be elected in the board of such implementing agents. 9
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, Adopted / Not Adopted if any Part III Why disqualify officers from the Need clarity The FSRA CEO has to be impartial and 9. (1) b financial service providers independent of influence from the industry he regulates. To have a CEO pooled from a person holding an interest in a regulated FSP would invariably lead to conflict of interest. Not adopted, the term “member” extends to Part III Are we are still dealing with the These should be in reference 13. (4) board or employees? to the board cover members of the board of the Authority. The interpretation section does not Part III Need clarity in respect of the The comment is unclear and the cited 13. (5) previous subsection provision did not assist. Clarity needs to be provided. 10
INDUSTRY COMMENTS FINANCIAL SERVICES REGULATORY AMENDMENT BILL, 2019 Part Comment (s) Proposed Change, Adopted / Not Adopted if any Part III Why the reference to deputy It should be limited to the The comment is unclear. The existence of a 14. (1) CEO staff deputy CEO is not legally impossible, hence its inclusion here. Part III The authority cannot delegate to Remove the board member Not adopted. The language refers to the – which 14. (2) a higher body is the Authority as an institution, hence it is inclusive Board member of board members and staff. Therefore, the only higher authority would be the Ministry or minister. Part III Why the exclusion of the financial Remove the clause Not adopted, while all-inclusiveness is 14. (4) c services provider understood in legislation, the FSRA cannot delegate its function to a supervised entity. 11
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