Page 95 - Profile's Unit Trusts & Collective Investments - September 2025

Legislation and guidelines Chapter 5

Are you an “accountable institution”?
FICA lists a number of accountable institutions. One of them is “A person who carries on the
business of rendering investment advice or investment broking services, including a public
accountant as defined in the Public Accountants and Auditors Act 80 of 1991, who carries on
such a business.”

Any determination made by the Ombud must, of course, be reduced to writing, and must include
reasons for the decision. The Ombud may grant leave to appeal, and such appeals will be heard by
the Financial Services Tribunal.

Financial Intelligence Centre Act (FICA)
SA became a signatory to the United Nations Convention on Transnational Organised Crime
(UNTOC) in December 2000. This triggered the introduction of domestic legislation to combat and
deter money laundering.
The Financial Intelligence Centre Act (FICA) was promulgated in December 2001 and the
Act effectively came into operation from July 2003. It imposed a range of duties on accountable
institutions to monitor clients and transactions in order to prevent money laundering activities.
FICA complements the Prevention of Organised Crime Act (POCA) which specifically criminalises
money laundering. POCA, however, does not place any know your client (KYC) or reporting
obligations on banks or other entities which may be used by criminals in money laundering (ML) or
terrorist funding (TF) activities. These requirements were introduced under FICA.
The original FICA has been amended a few times to ensure South African money laundering
legislation remains in line with international best practice. Recent amendments have been aimed
at ensuring FICA is in line with recommendations of the Financial Action Task Force (FATF), an
initiative of the G7, based in Paris, and aimed at combatting money laundering, terrorist financing
and finance for weapons of mass destruction.
In 2023 the FATF put SA on its grey list, indicating that the country’s measures had some
deficiencies and increased monitoring was required.
In February 2025, the FATF found just two remaining items needed to be addressed before SA
could be removed from the grey list. These related to reputational damage to the country, as its
effectiveness in combatting financial crimes like corruption and money laundering, as well as terror
financing are deemed to be below international standards.

Accountable institutions
FICA defines a broad range of entities involved in financial transactions as accountable
institutions. The list includes – amongst others – banks, real estate agents, investment managers
(including collective investment schemes), forex dealers, casinos, attorneys, long term insurers,
and stockbrokers.
In December 2022 the range of accountable institutions was broadened to include more credit
providers, dealers in high-value goods (over R100 000), people who assist in setting up companies
local or foreign companies, people (including trustees) who assist in setting up trusts, the South
African Mint Company, crypto-asset service providers, informal money or value transfer providers
(hawaladars), and payment clearing service operators.
Motor vehicle dealers and dealers in Kruger Rands that were previously reporting institutions only
are now also accountable institutions.
Accountable institutions are required to report suspicious transactions and tax evasion to the
Financial Intelligence Centre (FIC) and their compliance is monitored by supervisory bodies,
whereas reporting institutions report directly to the FIC.
FICA places onerous duties and obligations on all accountable institutions. These include:
R The establishment and verification of the identities of clients
R Maintenance of detailed records about clients, business relationships and transactions

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