Weighing Out The Increasing Cost Of Compliance In South Africa
  • Posted 17 July 2017

Weighing Out The Increasing Cost Of Compliance In South Africa

Companies in South Africa are constantly being directed to comply with the increasing variety of regulations and legislation in the fields in which they operate.

Complying with the prevailing laws is not only encouraged, but required, however this can be at a significant cost for any company. On the other hand, noncompliance also poses a significant threat of fines and penalties, ranging anywhere from R10 000 to R2 million per offense. 

This poses a dilemma that leaves businesses weighing out the costs of noncompliance.

What is the cost of compliance?

Compliance costs are simply the ongoing price your company needs to pay for following the rules and can sometimes be referred to as ‘compliance overhead’. This includes all the expenses your company incurs in order to adhere to industry regulations and may include:

  • Salaries for the people you appoint to work in compliance;
  • The time and money you spend on reporting on your compliance efforts;
  • New systems and technologies you need to acquire; and
  • Industry specific compliance functions you need to undertake. For example, environmental assessments, human resources policies, audits etc.

What about the cost of noncompliance?

The increasingly high cost of compliance may tempt companies to ignore their compliance function. However, as evidenced from the FSB enforcement actions over the past year, this could be an even costlier mistake.

The FSB has been clamping down on companies who have contravened any regulation for which they govern. For instance, they recently imposed a small administrative penalty of R20 000 on Mzala & Company Limited for issuing services they were not authorised to1.

In addition, late last year, they imposed penalties and fines on both a company and 2 individuals for noncompliance. This came to a total of R4.5 million where the 2 individuals in question were ordered to pay R2 million each and the company - Lefika Securities, was ordered to pay the administrative penalty of R500 0002

As a company, can you afford to be caught out?

Attend the 18th Annual Conference on 16 & 17 August 2017 at the Indaba Hotel, Spa & Conference centre and find out everything you need to know about the cost of compliance, the changing regulatory environment and how to manage your risk effectively in interactive presentations led by industry leaders in the compliance field.

Some of our expert speakers include:

Michael Meadon - Enterprise Solutions & GRC Market Development Lead: Thomson Reuters

Presenting on “The Cost of Compliance”

Michael’s career & expertise resolves around compliance training and oversight in media, finance and information related industries. His focus is on identifying key regional growth opportunities and on day-to-day oversight of the business performance, as well as strategy conception, monitoring and execution.

Advocate Suzette Olivier - Managing Executive: Guardrisk Group

Presenting on “Insurance Compliance - a missed opportunity?”

With over 22 years of managing risk, legal, compliance and governance services in insurance, Suzette has attained crucial expert insight on compliance. Suzette currently provides trusted and valued services to Guardrisk Group. She focuses on managing the business’ reputation and achieving a balance between risk and reward.

Juanita Moolman - In-house Counsel: Hollard

Presenting on “Robo-advice and FAIS”

Juanita’s expertise in compliance culminates from her extensive experience as a Legal Advisor, FAIS compliance officer and risk management oversight. Juanita has attained vital insight within compliance predominantly in long- and short-term insurance. She has also co-authored the publication “Principles of Financial Law and The Financial Advisory and Intermediary Services Guide”.

Find out more on our line-up of renowned speakers here.

Build your knowledge of compliance and share in the insights of the industry’s leading minds by attending the Compliance Institute Southern Africa’s 18th Annual Conference. Register now to attend the event in person, or watch the livestream from outside Gauteng.

1 – https://www.fsb.co.za/enforcementCommittee/Documents/Order%20_EC%20Mzala-%202017-07-07%20Signed.pdf

2 – https://www.fsb.co.za/enforcementCommittee/Documents/ORDER_EC%20Lefika_2016-10-20_signed.pdf

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