Quick reads for this week

Sanlam Life Insurance merges with NMS Insurance Services for strategic growth

In a significant move that underscores its expansive reach in the South African insurance market, Sanlam Life Insurance Ltd has received the go-ahead from the Tribunal for its proposed merger with NMS Insurance Services (SA) Ltd. This merger will see Sanlam Life acquiring a specified percentage of shareholding in NMS Insurance Services, enabling it to exercise sole control over the micro-insurer post-merger.

Sanlam Life is a subsidiary of Sanlam Limited, a leading financial services group with a diverse portfolio that spans various jurisdictions. The Sanlam Group operates through four primary business clusters, delivering comprehensive financial solutions tailored for both individual and institutional clients.

These clusters encompass areas such as life and general insurance, financial planning, fiduciary services, credit, retirement, investment, and wealth management. In particular, Sanlam's expertise in life insurance products, including funeral and non-life insurance, will play a crucial role in the strategic execution of the merger.

On the other hand, NMS Insurance Services is a licensed micro-insurer and an authorised financial services provider, currently owned by the MultiChoice Group Limited. NMSIS caters exclusively to the micro-insurance needs of MultiChoice’s DStv subscribers, providing a niche service that aligns with the broader strategy of enhancing financial inclusivity among South Africa’s lower-income populations.

By integrating NMSIS’s offerings into its expansive portfolio, Sanlam Life is poised to enhance its product range, bringing micro-insurance solutions directly to a wider audience.

FSCA penalises unlicensed financial advisor Kabelo Emanuel Mogale

The Financial Sector Conduct Authority (FSCA) has imposed an administrative penalty of  R1 015 315.87 on Mr Kabelo Emanuel Mogale (Mogale) and debarred him for 10 years.

The FSCA investigated the conduct of Mogale after it received complaints that Mogale might have been providing unauthorised financial services through Forex Private Jet Injectors (Private Jet).

Private Jet was not a juristic person, it was the name that Mogale attached to his scheme. The FSCA found that Mogale provided financial advice to clients when he published forex signals via the Telegram platform and made recommendations to clients regarding their trades in forex currency pairs, which are financial products.

The FSCA found that Mogale contravened section 7(1) of the Financial Advisory and  Intermediary Services Act No. 37 of 2002 (FAIS Act) by rendering financial services without being duly authorised to do so. In addition, Mogale contravened section 139(2) of the Financial Sector Regulation Act No. 9 of 2017 by failing to cooperate with the FSCA  during the investigation.

The FSCA says that the practice of providing or publishing signals concerning online trading in financial products falls within the definition of financial services in the  FAIS Act, and as such persons providing such signals require a financial services provider licence. Providing signals without a licence is a contravention of a financial sector law and a criminal offence.

Sars warns about crypto asset compliance

The South African Revenue Service (Sars) says it has noted the phenomenal growth of the use of various digital currencies by many South Africans.

According to Sars, prominent amongst these is the prevalence of crypto assets. A staggering number of more than 5.8m South Africans hold a crypto asset, with Southern Africa boasting the largest uptake of Bitcoin in the world.

"Sars is concerned that these crypto assets and trades are not being declared on the tax returns of taxpayers. Sars is legally obligated to account for any income or assets held by taxpayers and had previously invited crypto exchanges and those involved in trading or holding crypto assets to disclose related activities voluntarily," it said.

As a follow-up, Sars says it will be including crypto assets in its compliance programmes.

"Consequently, Sars is engaging with the Financial Sector Conduct Authority (FSCA) regarding the provision of information on registered Crypto Asset Service Providers (CASPs). Sars is also receiving information directly from the local exchanges," it says.

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