Regulators showing their teeth at last

Last week we began hearing about the presentation that the FSB made to the Parliamentary subcommittee on Finance, into the whole question of bulking, non-disclosure and secret profits.

A couple of days later we hear that the FAIS ombud has stepped up and penalized an intermediary and then at the end of the week we heard the news that the FSB had suspended a pension administrator.

All of this activity is good news, especially for those honest operators out there. Its bad news for the thugs, I hope.

I also hope that this is the start of the regulators to follow in the footsteps of the PFA. And while there may be some detractors out there, there can be little doubt that he has shaken up the financial services sector, regardless of what his motives are.

Due to his actions he has single-handedly changed the way that product providers think when it comes to product development. At the same time the whole secret profits issue has also served as a wake-up call to the financial services sector, when it comes to disclosure.

Turning back to the FSB announcement last week against IME Actuaries and Consultants, the FSB confirmed to us that they received a complaint in Aprillast year and this was followed bya number of attempts to obtain an explanation from IME.

According to Russel Michaels at the FSB when these attempts failed, six other administrators were approachedto establish what their fee would be to do the same work. Michaels also confirmed that as far as he was aware this is the first time the approval of a pension funds benefit administrator has been suspended.

Michaels also confirmed that all business has to be transferred to other administrators by no later than 29 September 2006.

On the question of an appeal by IME, In terms of section 26(2) of the Financial Services Board Act, 97 of 1990, any person aggrieved by a decision of the executive officer (in for instance his capacity as Registrar of Pension Funds) has the right to appeal to the FSB Appeal Board.

And while the lodging of an appeal would not automatically suspend the operation of the Registrar's decision, IMEhas beenadvised ofits right of appeal.