We attended a FIC feedback seminar yesterday.
- The FIC are placing a lot of emphasis on ensuring that:
- We determine who the beneficial owners are of legal entities;
- That we conduct a TFS search on each and every seller; buyer and beneficial owner;
- That all AI’s should have registered their RMCPs in terms of Directive 6; and
- Generally, complying with their RMCP.
Just so that you know how serious this is becoming – One estate agency has been fined over R7mill for being non-compliant and its efforts to appeal, were dismissed.
As such, a “gentle” reminder that you must establish beneficial ownership (BO) as part of your FICA investigations – There is no excuse for not complying with this!
How?
In order to determine BO with a company or CC, it is now law, that all such entities have a BO record with the CIPC and as such, you should call for a BO CIPC printout when taking a mandate already – All companies and CCs should be able to provide one. And if they cannot, then at the very least, insist on a letter from their auditors or accountants, which confirms who the BO is/are.
The same with Trusts. Demand a letter from the auditors. Trusts often have other Trusts as beneficiaries and in one case we had a transfer where our seller (being a Trust) had 11 other Trusts as beneficiaries! The FIC requires that we take “reasonable” steps to determine who the BO is/are. In the case of a Trust, the best is to simply demand a letter from the client’s auditor to confirm who the BO is/are. Auditors are also AI’s so we may rely on their confirmation. And who will know better than their auditors?
After you have this information, you MUST then also conduct a TFS search on all these individuals and keep a copy on your file as proof. In addition, you should also TFS the actual company, CC, directors/members or Trustees (if a Trust), and all determinable beneficiaries (i.e. those mentioned in the Trust deed by name).
Furthermore, make sure you have an RMCP that is up to date. At MILTONS we have a template for you which was updated as recently as August 2024 if you need one to work off. It is available on our website at (LINK). Do spot checks regularly that your RMCP is being followed by your agents, to the letter.
We suggest you take this seriously unless you have R7million to donate to the FIC!