Regulatory Alerts2018-03-31
PF Circular 129: Proceeds of Investigations into Secret Profits by Fund Service Providers
The South African Financial Services Board requires all retirement fund service providers to voluntarily refund any secret profits and accrued interest to the affected funds. Fund boards must actively negotiate the recovery and equitable application of these proceeds, while the regulator explicitly rejects retrospective ratification of such misconduct as it undermines the provider’s fit and proper status. Board members face personal liability under the Pension Funds Act for failing to exercise due diligence in recovering these funds or for improperly approving retrospective ratifications of service provider conduct.
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