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Consumer Affairs
Wednesday, June 1, 2005
Know your deadline

Know Your Client requirements were imposed last year in terms of the Financial Intelligence Centre Act (FICA). It was part of South Africa’s cooperation with the international fight against money laundering. Stanlib is warning clients that those who have not responded by the final 30th June deadline will not be able to operate their bank or unit trust investment accounts.

In terms of the law the original deadline by which clients had to establish their identities with relevant institutions was July 2004. This proved impractical, and was extended through a phased-in approach with dates set down for different categories of client.
Unfortunately, says Anthony Katakuzinos, Client Service Director of Stanlib, the reprieve has encouraged some clients to take a casual approach to FICA. “But if they don’t comply in time, they will find they no longer enjoy quick and easy access to their funds.
“I urge all clients to establish their identities with investment companies, banks, insurers and financial intermediaries as soon as possible.”
The first rescheduled deadline fell on 31st October 2004 and created problems for clients who were late to react. This applied to Category 1 clients (partnerships, trusts and clients responsible for the top 20% of an institution’s monthly transactions by value). After this date FICA prevented any financial institution from transacting with Category 1 clients until KYC processes had been completed. In effect access to their funds was blocked.
The next deadline was 30th April and applied to Category 2 clients (those responsible for the next 30% of monthly transactions by value). The final deadline is 30th June for the remaining 50% of an institution’s clients.
Of course, clients may not be aware in which category they fall. Advises Mr Katakuzinos, “The most prudent course of action is for all clients to fulfil KYC requirements sooner rather than later.”
After 30 June, no one will be permitted to conduct business with local financial institutions unless KYC requirements had been fulfilled. To avoid consumer fallout over this Stanlib says it has set up a 15-seat outbound call centre to contact non-compliant customers.
For KYC purposes, clients are advised to produce an ID book and tax number, a bank statement containing their name and street address, and an electricity, rates or water account, again proving their place of residence. In some cases a passport may have to be produced. Properly attested copies may be accepted.
In the case of difficulty clients may apply to their bank, requesting a manager visit them at home in order to certify their bone fides.

Copyright © Insurance Times and Investments® Vol:18.3 1st June, 2005
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