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IMB FICA Internal Rules Policy

IMB Financial Services (Pty) Ltd

264 Victoria Road,Woodstock, 7925 | T: + 27 87 941 3254 | F: + 27 21 447 5502
info@imb.co | Web:www.imb.co
Reg.No 2008/001532107

An Authorised Financial Services Provider: FSP No.: 43443

1. Background

2. Specific duties:

3. Duty to maintain records:

The documents used to comply with the FICA requirements (as and when
applicable) will be stored on the clients file and will be kept together with the transaction documentation for at least five years from the date on which the business relationship is terminated/transaction concluded.

4. Duty to report suspicious or unusual transactions:

Any person manager/employee of the FSP who knows or ought reasonably to have known or suspected that:

4.1. the FSP has received or is about to receive the proceeds of unlawful activities
or property which is connected to an offence relating to the financing of
terrorists and related activities, or a transaction or series of transactions to
which the FSP is a party;

4.1.1. Facilitated or is likely to facilitate the transfer of the proceeds of
unlawful activities or property which is connected to an offence relating to the financing of terrorist and related activities

4.1.2. Has no apparent business or lawful purpose

4.1.3. Is conducted for the purpose of avoiding a reporting duty under the
FIC act

4.1.4. May be relevant to the investigation of an evasion or attempted
evasion of a duty to pay tax

4.1.5. Relates to an offence relating to the financing of terrorists and related
activities.

Such person would be obliged to report in writing such a transaction to the Section 43(b) FICA Compliance Officer before end of business day.

 

5. How to deal with Politically exposed persons:

Such a client must be regarded as a high risk client and therefore a stricter due diligence procedure must be performed on this type of client.

As part of the risk assessment, the key individual should ensure that reasonable steps have been taken to establish:

5.1. The source of wealth involved (and the economic activity which created the
wealth),

5.2. The source of funds to be used in the relationship,

5.3. The services/products required,

5.4. The nature of the PEPs public position,

5.5. That the client identiFICAtion and verification requirements has been fully
completed, and

5.6. The PEPs involvement in the corporate entity customer/prospective
customer, where applicable, and

5.7. The nature of the relationship with the PEP (where the prospective
customer/customer is a family member/close associate of the PEP). Where PEP relationships are commenced and maintained, senior the key individual should undertake regular oversight activities on the transactions in
question with a view to identifying any potential causes for concern. Evidence of any unusual features such as the receipt of large sums from government bodies, state owned activities or government and central bank transactions should be the subject of particular scrutiny.

The day-to-day monitoring of PEP relationships may, where appropriate, be delegated to a competent person, although oversight must remain with key individual

Examples of PEPs include:

5.7.1. Individuals who are or have been entrusted with prominent public functions in a foreign country, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials (collectively termed Senior political figures).

5.7.2. Also included are business relationships with family members or close associates of PEPs, which involves reputational risks similar to those with PEPs themselves.

5.7.3. The definition is not intended to cover middle ranking or more junior individuals in the foregoing categories. (Definition taken from The Forty Recommendations of the Financial Action Task Force on Money Laundering dated 20th June 2003).

5.7.4. The FSP has extended the above definition to include domestic PEPs who qualify by virtue of their public positions held

5.7.5. A senior political figure is a senior figure in the executive, legislative, administrative, military or judicial branches of a government (elected or non elected), a senior figure of a major political party, or a senior executive of a government owned corporation. It includes any corporate entity, partnership or trust relationship that has been established by, or for the benefit of, a senior political figure.

5.7.6. Family members typically include the person’s parents, siblings, spouse, children, in-laws, grandparents and grandchildren where this relationship can be ascertained.

5.7.7. Close associate typically includes a person who is widely and publicly known to maintain a close relationship with the senior political figure and includes a person who is in a position to conduct substantial domestic and international financial transactions on his or her behalf.

5.7.8. The term (PEP) should be understood to include a person who’s current or former (“Rule of thumb”: 1 year after giving up any political function) position may attract publicity beyond the borders of the country concerned and whose financial circumstances, activity or influence may be the subject of additional public interest. In specific cases, local factors in the country concerned, such as the political and social environment, should be considered when deciding whether a person falls within the definition.

 

6. Factors to be considered in terms of the consolidated list of terrorist
organizations and associated individuals:

A client whose name is indicated on the United Nations Security Council’s list of terrorist organisations and associated individuals list would be considered a high risk client.
Whenever, a Key individual/representative or other employee suspects that he is interacting with such a client he will be obliged to report this to the Section 43(b) FICA Compliance Officer before end of business day.

 

7. Client Risk rating and source funds verification:

As part of the “know your client” procedure the FSP is responsible to verify the furnished particulars against information which can be reasonably expected to achieve such verification. The FSP must adopt a risk-based approach to the verification of the particulars in question. A risk-based approach implies the greater the risk, the higher the level of verification, and the more secure the methods of verification used, should be.

7.1. Risk rating your client

The key individual and/or representative will be responsible to accurately assess the risk posed by a client by:

7.1.1. Determining how the reasonable KI/REP in a similar FSP would rate
the risk involved with regard to a particular client, a particular product and a particular transaction AND

7.1.2. What likelihood of danger can be foreseen of money laundering
occurring with the client profile, product type or transaction in
question?

7.2. Source of funds verification

The FSP must obtain additional information concerning a business
relationship or single transaction which poses a particularly high risk due to the fact that the transaction may be intended to facilitate money laundering activities.

8. Cash Threshold Reporting:

8.1. It is the policy of this FSP NOT to receive any cash money from clients, and
NOT to receive any payments directly from clients. All payments must be
made directly by the client to the designated bank account.

8.2. Should the client insist to make a cash payment directly to the FSP then the
key individual must be informed immediately as well as the FAIS compliance
officer, and the internal money laundering control compliance officer for their
approval and guidance.

8.3. Should the key individual decide to proceed with the cash transaction – then
the following questions should be answered, record must be kept of the
answers and all steps taken thereafter.

8.3.1. Is this transaction – FSP receiving Cash or by traveller’s cheque from
the client or a representative of the client

8.3.2. Is the amount concerned R25000 or more

8.3.3. Has the same client entered into any similar transaction in the
previous 24 hours

8.3.4. Is the aggregate amount R25000 or more

8.3.5. If the answer is Yes to any one of 8.3.1 PLUS 8.3.2 OR 8.3.1 PLUS
8.3.3 & 8.3.4 , then the necessary Cash threshold reporting form must be completed.

8.4. A cash threshold report must be filed with the Centre electronically by making
use of the internet-based reporting portal provided for this specific purpose at
www.fic.gov.za

8.5. The Section 43(b) FICA Compliance Officer would be required to make the
cash threshold report as soon as possible but no later than two days after a
Kl/REP/EMPLOYEE became aware of cash transaction or series of
transactions that exceeded the prescribed limit

 

9. FICA Training:

A FSP must provide training to its employees to enable them to comply with the provisions of the FIC act and the internal rules applicable to them.
Training on FICA must be conducted a least every two years.

 

Policy acceptance:

This policy has been adopted as required in terms of the FIC Act legislation as official company policy and all IMB Financial Services staff are obliged to comply with this policy.

 

Section 43(b) FICA Compliance Officer:

The person, in this FSP, responsible for the management in respect of compliance with the FIC Act is: D.A. Grobler.
The Section 43(b) FICA Compliance Officer is responsible to ensure that the FSP will adhere to the following:

3.1. The registration of the FSP with the FIC.

3.2. IdentiFICAtion and veriFICAtion of the identity of persons whom transacts
with the FSP.

3.3. The documents used to comply with the FICA requirements (as and
when applicable) will be stored on the clients file and will be kept
together with the transaction documentation for as long as is
prescribed by law.

3.4. Reporting of suspicious transactions.

3.5. Client risk rating and Source of funds veriFICAtion

3.6. The reporting of cash threshold reports

3.7. Training of personnel with regards the duties imposed on the FSP in
terms of this act.

 

Non-compliance:
Failure by any staff member to comply with these internal rules will be regarded as serious misconduct and will lead to a disciplinary hearing.

 

Duty to register as accountable institution:

The 43(b) FICA Compliance Officer is responsible to register the FSP as an accountable institution with the FIC. He will also be responsible to notify the FIC within 90 days of any changes to the information furnished at registration.

4.1. This Company is an accountable Institution as defined in the FIC Act due to the fact that it it carries on Long Term Insurance Business as determined in Schedule I of the Act.

4.2. The Company has been duly registered with the FIC as an “Accountable Insitution” with Institution reference number : AI/131112/00010

 

Duty to establish and verify the identity of clients:

The Broker/Advisor dealing with the client must:-

ascertain if and when a transaction requires him/her to comply with the “know your client” procedure;

ensure that he receives all the necessary documentation from the client, before the transaction is concluded, and
hand it in, together with the transaction documentation, to the head of administration; and must report to the person mentioned in paragraph 1 that he/she is busy with a transaction affected by the FICA requirements.

 

Exemption from Identifying and verifying clients:

The Financial Services Provider (“Accountable Institution”) is exempt from compliance with duty to identify and verify a client and his residential address and to keep records of the documentation used in this regard if the answer to any of the questions below is yes:-

Is this transaction a transaction pertaining to a long-term
policy as defined in the Long-Term Insurance Act of which the policy holder is a pension fund, provident fund or
retirement annuity fund?

Is this a transaction pertaining to a Unit trust or linked policy investment by a pension fund, provident fund or retirement annuity fund;

Is this a transaction pertaining to a any annuity purchased as a compulsory annuity in terms of the rules of a pension fund, retirement fund or retirement annuity fund;

Is this a transaction pertaining to a any reinsurance policy issued to another accountable institution;

Is this a transaction pertaining to any long-term insurance policy classified as an assistance policy by the Long-Term Insurance Act;

Is this a transaction pertaining to any long-term insurance policy which provides benefits only upon death, disability, sickness or injury of the life insured;

Is this a transaction pertaining to any long-term insurance policy with recurring premiums not exceeding R25000 per
annum (R2083.33 per month) provided that the accountable institution must comply in respect of every client:

Who increases the premiums so that the amount of R25000 p.a. is exceeded;

Who surrenders the policy within 3 years after its commencement; or

To whom that accountable institution grants a loan or extends credit against security of such policy within 3 years after its commencement.

 

Is this a transaction pertaining to any long-term policy with a single premium not exceeding R50 000 provided that the accountable institution must comply in respect of every client:

Who surrenders the policy within 3 years after its commencement; or

To whom that accountable institution grants a loan or extends credit against security of such policy
within 3 years after its commencement

Is this a transaction pertaining to any contractual agreement to invest in unit trusts or linked product investments with
recurring premiums less than R25000 p.a. provided but must comply with Part 1 and 2 of Chapter 3 for every client who liquidates whole or part of such investment

Is this a transaction pertaining to any unit trust investment or linked product investment with a once-off premium not
exceeding R50 000. Provided but must comply with Part 1 and 2 of Chapter 3 for every client who liquidates whole or part of such investment

Is this a transaction pertaining to any other long-term insurance policy on condition that within 3 years after commencement the surrender value does not exceed 20% of the value of the premiums paid in respect of that policy

 

When the FICA requirements must be complied with pertaining to the identification and verification of clients the FICA Manual must be consulted and this is obtainable from the person mentioned in paragraph 1 of this document.