Compliance Creates Enterprises


Guest writer Susheila Moodley writes about the urgency and the need for the compliance industry in South African business, along with how a qualification in the industry creates stability and opportunities in business.

The need for compliance has often created niche markets to service businesses that require support in becoming compliant. The emergence of these new enterprises are based upon specialist skills that individuals have... these specialist skills are often in demand in specific sectors and give rise to these niche enterprises. South Africa like every other country in the world is struggling with the lingering impacts of the 2008 recession. Most disturbing of all has been the rise in youth unemployment, illustrated by the inability of graduates leaving university to find or retain employment.

So how do we regenerate the economy? We seem to be in global agreement that enterprise creation is the way to go, that the youth who have qualifications and no formal employment opportunities must create them. The compliance industry in South Africa has grown in strides, FAIS compliance in particular has spawned an excess of industries from training providers to compliance partners to examining bodies.

The current RE examinations presents such an opportunity for enterprise development and this stems from the function of Key Individuals. With poor pass rates, we believe that short-term Financial Service Providers may require interim services of this nature whilst their KI teams complete various aspects of the Fit and Proper compliance requirements.

If you have a suitable qualification in finance, economics, accounting or even law and have completed the KI Regulatory Examination, an opportunity exists for you as a KI in the financial services sector. It may even have the potential to become a micro enterprise on its own providing specialist services in the financial services sector.

Why is an outsourced KI function an enterprise opportunity?

The Landscape
The Regulatory Examination is intended to develop a baseline level of competence in the financial services sector in order to professionalize the sector and protect the consumer.

The Reality

Whilst its intent is sound, the implementation has proven to be somewhat challenging.

These challenges include:

  • The poor response rate from the industry. As at June 2011 only 11% of the sector has written the examination
  • In addition, the sector has no idea of the number of people who have actually passed
  • Since the deadline was issued by the Financial Services Board the number of people who have registered to write the examination has in fact dropped

A possible solution ……..Outsourced Key Individual Services

What are the typical services that an outsourced Key Individual would need to deliver:

  • Management and oversight function of the FSP including:
    • Auditing of record keeping practices
    • Auditing of SLA's with third-party providers
    • Auditing of existing qualifications and equivalence established
    • The latest developments in the regulatory environment
    • Management of the reporting function against the FSB's requirements
  • Fit and Proper management of Reps:
    • Supervision plans aligned to requirements of product categories and supervision support prescriptions as detailed d in the various board notices
    • Qualification Management - tracking the progress of representatives in acquiring minimum qualifications
    • Qualification recognition applications to the FSP
    • Training plans for representatives including CPD management
    • Management of the representatives register against the requirements of the registrar

Enterprises are rarely created according to a business plan. More often than not, they are created out of adversity or by individuals who are opportunistic - they see an opportunity and grab it. This is the example of a niche market that creates, engages and facilitates a market!

Susheila Moodley has been providing specialist consulting and training services to the financial services sector and specifically retail banking since 2003 with the promulgation of the FAIS Act.

Find out more about opportunities in the compliance industry with The Facilitation Workshop,

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