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Sanlam’s investment arm fined R10 million for weak anti-money laundering controls
Sanlam fined R10 million after FSCA probe exposes compliance failures
South Africa’s biggest insurer, Sanlam, has landed in hot water after its investment arm, Sanlam Collective Investments (SCI), was fined over R10 million by the Financial Sector Conduct Authority (FSCA). The penalty follows a detailed inspection that uncovered lapses in the company’s anti-money laundering controls.
A serious warning from the regulator
The FSCA’s March 2024 inspection found SCI had breached several sections of the Financial Intelligence Centre Act (FIC Act), which governs how financial institutions identify and mitigate the risks of money laundering and terrorist financing.
Although SCI had created a Risk Management and Compliance Programme, it failed to implement it effectively. Regulators found that key processes such as enhanced due diligence, identifying complex transactions, and tracking politically exposed persons were either incomplete or insufficiently documented.
The authority said SCI also failed to properly verify some clients’ identities or conduct regular checks on their beneficial owners, an essential step in preventing financial crime.
Not their first run-in with the law
This isn’t SCI’s first compliance issue. The FSCA considered previous violations, including a breach of the Collective Investment Schemes Control Act, when deciding on the penalty.
As part of the latest enforcement, SCI has been ordered to pay R10.6 million, though R3.6 million of that amount will be suspended for two years if the company shows full compliance. The suspension serves as both an incentive and a warning: fix the gaps or pay the rest.
Why it matters for South Africa’s financial system
The FSCA called the violations “serious,” given Sanlam’s size, influence, and exposure in the local market. It said large financial institutions should demonstrate the highest vigilance in preventing suspicious activity and protecting the integrity of South Africa’s financial system.
In a sector already under global scrutiny, the watchdog emphasised that strong compliance isn’t just a box-ticking exercise; it is essential to maintaining trust and stability across the banking and investment industry.
Public reaction and wider implications
The announcement sparked sharp discussion on social media, where many South Africans questioned how such a major player could fall short of anti-money laundering obligations. Others pointed out that the fine, while significant, sends a broader message: even established firms aren’t exempt from accountability.
For investors and clients, the news is a reminder to expect higher transparency and stronger internal controls from institutions that handle billions in public funds.
Looking ahead
While SCI has already begun remedial steps, the FSCA made clear that sustained compliance will be closely monitored. The case stands as a signal to the entire industry: regulatory oversight in South Africa is tightening, and the cost of non-compliance is rising.
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Source: Business Tech
Featured Image: Daily Investor
