The Financial Sector Conduct Authority (FSCA) of South Africa has imposed administrative sanctions on Momentum Wealth (Pty) Ltd (Momentum Wealth) and Momentum Collective Investments RF (Pty) Ltd (MCI) for their weak AML/CFT measures. It has also directed both the entities to take remedial actions.
The FSCA identified weaknesses in the entities’ AML/CFT framework after an inspection regarding the Financial Intelligence Centre Act, 38 of 2001 (FIC Act). The FIC Act dictates specific requirements to institutions at risk of being used for ML/TF. The Act also gives the FSCA the power to supervise and enforce compliance by accountable institutions. Thus, the FSCA inspects accountable institutions to assess their AML/CFT framework. These inspections help the authority to assess the institutions’ ability to mitigate ML/TF risks and comply with the FIC Act.
Considering the seriousness of the entities’ non-compliance with the FIC Act, the FSCA has imposed a total financial penalty of R11,100,000.00 ($778,374). This amount does not include an additional R100,000.00 ($7,012), which the FSCA has currently suspended for three years.