Fais compliance continues to plague forwarders

The South African Association of Freight Forwarders (Saaff) will make representations to the Financial Services Board (FSB) in coming weeks to address compliance issues around the Financial Advisory and Intermediary Services (Fais) Act of 2002. According to Saaff CEO Dave Logan, compliance with the Act is currently very low and many freight forwarders run the risk of heavy fines. “Six years after the introduction of the Fais legislation there are still a number of freight forwarders who are either ignoring the law’s existence or are still not fully conversant with the letter of the law, leaving them exposed to severe fines,” he said. According to the Act, anyone providing either advice or intermediary services related to a financial product must be registered with the FSB and their employees have to write a regulatory exam before the end of December this year. Clive Le Meme, compliance officer: national compliance CC & FSB, says freight operators have two options available to them: either they can register themselves or they can operate under an already registered financial service provider’s licence. Le Meme, however, advises that freight forwarders dabbling in the insurance industry be forewarned of the consequences should they be found not to have a licence or have staff performing any kind of intermediary service without having written the regulatory exam. “Anyone who is invoicing clients – and if somewhere on that invoice insurance is included – falls under the Act and has to be registered,” he told FTW. “The sales people going out to clients advising on insurance all fall under this act and have to write the exam before the end of the year.” He said it was highly unlikely that requests for exemption from the Act would be approved by the FSB, but advised Saaff as an organisation to make its representations sooner rather than later. “Fais is here to stay and as an industry it is important that your problems around compliance are brought to the table to be addressed.”