done by anne-marie d’alton, ceo of the principal officers association 16 may 2008
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Submission on Par 4 of the General Financial Service Laws Amendment Bill, 2008 to the Portfolio Committee on Finance. Done by Anne-Marie D’Alton, CEO of the Principal Officers Association 16 May 2008. Agenda. Who is the POA Need for professionalisation What the Bill wants to achieve - PowerPoint PPT PresentationTRANSCRIPT
Submission on Par 4 of the Submission on Par 4 of the General Financial Service Laws General Financial Service Laws Amendment Bill, 2008 to the Amendment Bill, 2008 to the Portfolio Committee on FinancePortfolio Committee on Finance
Done by Anne-Marie D’Alton, CEO of the Done by Anne-Marie D’Alton, CEO of the Principal Officers AssociationPrincipal Officers Association16 May 200816 May 2008
AgendaAgenda
Who is the POANeed for professionalisationWhat the Bill wants to achieveWill the Bill achieve its goal?Role of the RegulatorRole of the Board of TrusteesRecommendationsConclusion
Who is the POAWho is the POA
Non-profit organisationPromote the interest of principal
officers325 paid up membersBoard of ManagementFull time secretariat
Who is the POAWho is the POA
Aim:– Improve standard of governance– Forum for interaction– Voice of the PO’s– Raise issues with legislators…– Oversee learning & self development
Need for professionalisationNeed for professionalisation
Role of PO:– Most unrecognised occupation– Board knowledge fields– Execute resolutions of board of
trustees– Knowledge officer– Liaison– Operations
Need for professionalisationNeed for professionalisation
Elements of professionalisation– Standards– attitudes– behaviour
Elements already presentNeed for skilled, well rounded PO’s
What the Bill wants to What the Bill wants to achieve?achieve?
Registrar powers to:– Appoint PO’s– Terminate services of PO’s
Set out process of appointment…Set out fit and proper criteriaCompel PO’s to blow the whistle
Will the Amendment achieve Will the Amendment achieve its goal?its goal?
Not achieve in present formRole of Registrar– Supervise– Regulate
Not to interfere powers of BoT– Appoint fit and proper– Not employed or functionaries
Easy to shift responsibilityMonitor recruitment – not core
Will the Amendment achieve Will the Amendment achieve its goal?its goal?
Role of Board of Trustees– Direct, control & manage– According to rules– Ultimately responsible for
recruitment, selection and appointment
– Better placed to do so
Will the Amendment achieve Will the Amendment achieve its goal?its goal?
What role of Registrar should be?– Confine himself to supervisory role– Legislate fit and proper criteria– Compel funds to notify on
appointments– Confirm, review & cancel
appointments by BoT– Indicate the process to be followed if
there are objections/disputes– Develop format for submission
Recommendation: Par4(3)Recommendation: Par4(3)
View– Agrees
Gaps– Assume intention to prescribe
Recommendation– Registrar to consult when drafting
minimum requirements
Recommendation: Par4(4)Recommendation: Par4(4)
View– Partly agrees – No opting out
Gaps– Power to terminate although PO
renders service to BoTRecommendation– Registrar should not have power to
hire and fire– Power to confirm, vary or cancel
Recommendation: Par4(5)(a)Recommendation: Par4(5)(a)
View– Agrees with reservation
Gaps– No time period mentioned for
Registrar to respond– No provision for procedure where
funds fail to meet deadlines
Recommendation: Par4(5)(a)Recommendation: Par4(5)(a)
Gaps continue…– No provision on the status of the PO
while a fund awaits final determination of appeal• Fund without PO for some time, or• Fund and PO in limbo
Recommendation: Par4(5)(a)Recommendation: Par4(5)(a)
Recommendation– Registrar to respond within 14 days of
receiving notification– Appeal process should be mentioned– Period to lodge appeal – 21 days– Show good course – allow appeal– Objection to be suspended until final
determination
Recommendation: Par4(5)(c)Recommendation: Par4(5)(c)
Two pronged approach– General views, gaps,
recommendations– Specific per sub-paragraph for
completeness sake– Prefer re-draft as recommended
Recommendation: Par4(5)(c)Recommendation: Par4(5)(c)
General view– Support notion of setting fit and proper
criteria– Reservations about how the criteria have
been or shall be formulatedGeneral gaps– 3 board categories on fit & proper
• Good character• Competence and capability• Personal financial soundness
Recommendation: Par4(5)(c)Recommendation: Par4(5)(c)
General gaps continue..– Criteria limited– No logic flow in presentation– Language not simplistic– Open to subjective interpretation– Burden of proof not with courts or
competent authority– Open to many challenges
Recommendation: Par4(5)(c)Recommendation: Par4(5)(c)
General gaps continue..– Confusing who is ultimately
responsible for appointment– Easy to blame either party– Against who will the PO lodge a
complaint or dispute– Registrar find himself lost in fighting
objections, appeals…..– Not clear how the law will deal with
appeals
Recommendation: S4(5)(c)Recommendation: S4(5)(c)
General gaps continue..– Confusing who is ultimately
responsible for appointment– Easy to blame either party– Against who will the PO lodge a
complaint or dispute– Registrar find himself lost in fighting
objections, appeals…..– Not clear how the law will deal with
appeals
Recommendation: Par4(5)(c)Recommendation: Par4(5)(c)
Recommendation– Redraft entire 5(c) inline with
Annexure A of submission to include full scope of the criteria• Good character• Competence and capability• Personal financial soundness
– Window period to meet criteria– Allow Registrar to exemption when
exceptional circumstance should arise
Recommendation Par4(5)(c)(i)Recommendation Par4(5)(c)(i)
View– Agree with inclusion of similar
provisionGaps– No assessment criteria mentioned– Not all PO have formal financial or
legal training– No provision for transitional
arrangement for present PO’s to meet criteria
Recommendation Par4(5)(c)(i)Recommendation Par4(5)(c)(i)
Gaps continue..– Not comprehensive enough should
also include capability as an and/or option i.e. PO should have either experience and qualification or just knowledge
RecommendationPar4(5)(c)(ii)RecommendationPar4(5)(c)(ii)
View– Agree with inclusion of provision
Gaps– No assessment criteria mentioned– Based on subjective prescience– Almost impossible to determine future
conduct
Recommendation Recommendation Par4(5)(c)(iv)(aa-dd)Par4(5)(c)(iv)(aa-dd)
View– Reservation about applicability and
impactGaps– Former PO’s never subjected to
proper investigations or disciplinary action
– Enforcement problematic– Role of competent court not included
Recommendation Recommendation Par4(5)(c)(iv)(aa-dd)Par4(5)(c)(iv)(aa-dd)
Gaps continues…– No mention about outstanding
convictions– None of the actions of PO alone can
result in a fund not being able to meet its obligations
Recommendation Recommendation Par4(5)(c)(iv)(ee)Par4(5)(c)(iv)(ee)
View– Powers extremely wide– Fear result in subjectivity
Gaps– Assessment criteria absent– Get involved in unrelated
investigations– Cost implications– Malicious intent
Recommendation Recommendation Par4(5)(c)(iv)(ff)Par4(5)(c)(iv)(ff)
View– Agrees with some reservation
Gaps– No indication who will pay for the
services– Fund and PO will have a say in the
appointment– Advisory committee FIAS involved
Recommendation Par4(5)(d)Recommendation Par4(5)(d)
View– Agrees with some reservation
Gaps– No indication who will pay for the
services– Fund and PO will have a say in the
appointment– Advisory committee FIAS involved
Recommendation Par4(5)(d)Recommendation Par4(5)(d)
Recommendation– Advisory committee FIAS could be
involved with the assessment– Advisory committee already has
experience within this area of work
Recommendation Par4(6)Recommendation Par4(6)
View– Does not agree to include at this point
in timeGaps– Not well written– Different interpretations– Enforcement not clear– Implication of failure to act not clear
Recommendation
Recommendation Par4(6)Recommendation Par4(6)
Recommendation– Defer until more careful consideration
could be given
Annexure “A”Annexure “A”
Good character i.e. honesty, integrity fairness and reputation are qualities that are demonstrated over time:– No conviction of disciplinary or
criminal offence – dishonesty, fraud or a financial crime
– subject of adverse finding civil matter in connection with financial business, misconduct or fraud;
Annexure “A”Annexure “A”
Good character Asked to resign for position of trust– Suspended or disqualified prof body,
Regulators & licences revoked– Business placed under curatorship or
liquidation– Not truthful and fair in dealings with
customers, auditors….– Demonstrated willingness to comply
Annexure “A”Annexure “A”
Competence & Capability– demonstrate the competence and
ability to understand the technical requirements of the operations of business of the fund,
– inherent risks therein– management process required to
conduct its operations effectively with due regard to the interest of all stakeholders.
Annexure “A”Annexure “A”
Competence & Capability– Qualification– Experience– Knowledge– Disciplined by prof body, regulatory
authority– Asked to resign due to negligence,
incompetence fraud or mismanagement;
Annexure “A”Annexure “A”
Personal financial Soundness:
– As an indication of a person’s capacity to contribute to the soundness of the operation of a retirement fund and the protection of the interests of all stakeholders, the person should demonstrate a prudent management of his own financial affairs.
Annexure “A”Annexure “A”
Personal financial Soundness:– subject of any judgment or award that
remains outstanding or was not satisfied within a reasonable period
– made any arrangement with his creditors, filed for bankruptcy, had assets confiscated or has been involved with proceedings relating to any of the aforementioned.
ConclusionConclusion
The proposed amendments will go a long way to raise the profile of the PO
Improve work standards Improve how PO’s conduct
themselves
Contact detailsContact details
Principal Officer AssociationTel no: (011) 285 0036Fax no: (011) 886 1381E-mail: [email protected]: www.poa.org.za