- The FSCA imposed administrative sanctions totalling R5.39 million on four financial services providers for breaches of the Financial Intelligence Centre Act.
- Inspections uncovered failures involving compliance functions, customer due diligence, record-keeping and sanctions screening.
- Fairsure's appeal against its penalty was dismissed with the Appeal Board confirming the FSCA's decision.
The Financial Sector Conduct Authority (FSCA) has imposed administrative sanctions totalling R5.39 million on four financial services providers after inspections revealed failures to comply with key anti-money laundering obligations under the Financial Intelligence Centre Act.
The sanctions were imposed on Fairsure Administration (Pty) Ltd, Grey Swan Financial Services (Pty) Ltd, GQM Fund Administrators (Pty) Ltd and Louw Risk Financial Services CC. All four entities are licensed financial services providers and are classified as accountable institutions under the FIC Act, which requires businesses to take steps to prevent money laundering, terrorism financing and related criminal activities.
The FSCA carried out inspections as part of its supervisory responsibilities and found that the firms had breached one or more provisions of the Act.
Compliance failures uncovered
One of the key findings was that all four firms had risk management and compliance programmes in place, but those programmes did not fully comply with legal requirements. The regulator found that the programmes failed to make provision for one or more of the processes and procedures required by the FIC Act.
The inspections also uncovered shortcomings in compliance oversight. The law requires accountable institutions to have a compliance function that assists senior management and boards in meeting their obligations under the Act and to appoint a suitably competent and senior person to ensure that function operates effectively.
According to the FSCA, Fairsure appointed an Executive Secretary as its Money Laundering Compliance Officer. The regulator found that the position lacked the competence and seniority necessary to ensure an effective compliance function.
Louw Risk did not have a compliance function in place and had not assigned a suitably competent and senior individual to oversee compliance. Customer due diligence failures were also identified.
Financial institutions are required to identify and verify customers, establish the identity of people acting on behalf of customers, obtain information about business relationships and determine beneficial ownership.
The FSCA found that Fairsure and GQM failed to conduct the required customer due diligence on clients. In Fairsure's case, customer due diligence was also not conducted in line with the firm's own risk management and compliance programme.
The regulator further found that Fairsure could not provide customer due diligence records relating to certain clients when requested. Grey Swan was found to have failed to screen information about current and prospective clients against United Nations Security Council Targeted Financial Sanctions lists, which is a requirement aimed at preventing financial dealings with sanctioned individuals and entities.
Millions in penalties
After assessing the seriousness of the contraventions and other relevant factors, the FSCA imposed penalties on all four firms.
GQM Fund Administrators received the largest sanction and was fined R2.3 million. Fairsure Administration was fined R1.84 million, with R200 000 of that amount conditionally suspended for three years.
Grey Swan Financial Services was fined R1 million, with R600 000 conditionally suspended for two years. Louw Risk Financial Services received a penalty of R250 000, of which R100 000 was conditionally suspended for two years.
Grey Swan and GQM have already paid their penalties. Louw Risk entered into a payment arrangement with the FSCA while Fairsure paid its penalty after its appeal was unsuccessful.
Appeal dismissed
On 26 September 2025, Fairsure appealed to the FIC Act Appeal Board, challenging the sanction imposed against it. The Appeal Board dismissed the appeal on 30 April 2026 and confirmed the validity of the FSCA's decision. Fairsure subsequently paid the penalty.
The FSCA said the Appeal Board's ruling reinforced several important principles, including the seriousness of failures involving risk management and compliance programmes, the central role of customer due diligence in detecting and reporting suspicious transactions and the requirement that accountable institutions appoint suitably qualified individuals to oversee compliance.
The regulator also noted that the Appeal Board confirmed that a client's low-risk profile does not excuse non-compliance and that deterrence remains an important factor when determining appropriate sanctions.
The FSCA said the penalties and the Appeal Board's decision should serve as a warning to accountable institutions that failures to comply with anti-money laundering requirements will attract firm regulatory action.
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