Recent regulatory developments and industry updates continue to highlight the importance of effective governance, anti-financial crime controls, customer protection and responsible conduct across South Africa’s financial services sector. This month’s updates cover material IT and cyber incident reporting, anti-financial crime obligations, broker-fee governance and proposed safeguards against life insurance fraud, providing important reminders for regulated businesses and accountable institutions.
Prudential Authority Issues Notification Template for Material IT and Cyber Incidents
On 1 September 2026, the Financial Sector Conduct Authority (FSCA) and Prudential Authority (PA) issued Joint Communication 5 of 2026, determining a notification template for material IT and cyber incidents under Joint Standard 1 of 2023, Information Technology (IT) Governance and Risk Management Requirements for Financial Institutions, and Joint Standard 2 of 2024, Cybersecurity and Cyber Resilience Requirements.
The communication establishes the notification template to be used in relation to material IT and cyber incidents under the applicable standards. It provides a standardised format for notifying the relevant authorities of incidents falling within the scope of these requirements.
The publication provides financial institutions with a designated template for reporting material IT and cyber incidents within the scope of the applicable requirements. It forms part of the regulatory framework addressing IT governance, risk management, cybersecurity and cyber resilience in the financial sector.
FIC Annual Report
The FIC’s 2025/26 annual report was tabled in Parliament on 28 September 2026. It outlines the Financial Intelligence Centre’s activities and performance during the 2025/26 financial year, including its efforts to respond to increased demand for financial intelligence services and strengthen compliance with South Africa’s anti-financial crime framework.
The FIC achieved 19 of its 22 overall performance targets, representing 86% of its targets. It also received an unqualified audit opinion for the fourth consecutive year, reflecting continued positive audit outcomes.
The report further highlights the FIC’s inspection, compliance review and enforcement activities. Recurring deficiencies identified during risk-based inspections included weaknesses in Risk Management and Compliance Programmes (RMCPs), customer due diligence, registration information and targeted financial sanctions screening.
These findings highlight the importance of maintaining effective anti-money laundering and counter-terrorist financing controls, supported by appropriate documentation, ongoing monitoring and compliance with applicable reporting obligations.
Targeted Financial Sanctions: Ongoing Compliance Obligations
The Financial Intelligence Centre (FIC) has published a Targeted Financial Sanctions Manual explaining existing obligations relating to sanctions screening, reporting, asset freezes and delisting.
Institutions should incorporate sanctions screening into their ongoing compliance processes, including checks when clients are onboarded and when the United Nations Security Council introduces or expands sanctions measures. They should also monitor changes to the FIC’s targeted financial sanctions list and ensure that relevant notifications are received.
The use of screening software does not remove an institution’s responsibility to assess potential matches and comply with applicable legal obligations. The FIC’s online search tool can assist with identifying possible matches, but institutions remain responsible for determining whether a match is valid.
The manual also clarifies the reporting obligations under sections 28A and 29 of the FIC Act. Where an accountable institution knows that it possesses or controls property linked to a sanctioned person or entity, it must submit a terrorist property report under section 28A as soon as possible. Section 29 separately requires the reporting of suspicious or unusual transactions and activities relating to terrorist financing and targeted sanctions. Institutions must also comply with applicable asset-freezing obligations.
FSCA Examines Governance of Non-Life Insurance Broker Fees
The FSCA’s latest Integrated Report records findings from the second phase of a thematic review into non-life insurance broker-fee practices. The review considered whether relevant requirements relating to fee disclosure, customer consent and the classification of activities were being met.
The FSCA reported governance and oversight concerns and indicated that it was assessing the findings to establish whether additional regulatory steps may be warranted. The report does not provide further detail on the specific practices identified or quantify their effect on customers.
The review highlights the importance of sound fee-governance arrangements, transparent communication with customers, appropriate consent processes and reliable oversight of how broker activities are classified.
NFO Calls for Stronger Safeguards Against Life Insurance Fraud
The National Financial Ombud Scheme (NFO) has called for stronger safeguards against life insurance fraud following reports of cases in which beneficiaries were allegedly involved in the deaths of insured individuals to obtain insurance payouts.
In its statement published on 21 September 2026, the NFO proposed that the Financial Sector Conduct Authority (FSCA), together with industry stakeholders, consider requiring insurers to verify that the person whose life is insured has given informed consent before a policy is issued. The proposal is intended to improve transparency and help prevent policies from being taken out without the insured person’s knowledge.
The NFO also outlined how it handles complaints involving beneficiaries who remain under suspicion in a related criminal matter. Its general approach is to await the outcome of the criminal process before ruling in the beneficiary’s favour. However, where proceedings are unreasonably delayed, or the police confirm that the beneficiary is not a suspect, an insurer may be required to consider the claim using the available evidence and the applicable policy terms.
The statement highlights two important considerations for the life insurance sector: strengthening safeguards at policy inception and ensuring that claims are handled fairly when criminal allegations arise. Any additional consent requirement would depend on further consideration by the FSCA and is not yet an established new regulatory obligation.
Final Thoughts
The regulatory and industry developments highlighted in this update reinforce the importance of effective governance, sound risk management and clear accountability across South Africa’s financial services sector. From IT and cyber incident reporting to targeted financial sanctions, broker-fee oversight and consumer protection in life insurance, these updates demonstrate the continued focus on managing risk, meeting regulatory obligations and promoting fair outcomes for customers.
For regulated institutions and accountable institutions, maintaining appropriate controls, accurate documentation, effective monitoring and transparent customer processes remains essential. Ongoing attention to regulatory developments can help organisations identify potential compliance gaps and ensure that their practices remain aligned with applicable requirements.
Regulatory change is inevitable. Being prepared is a choice.
