lOMoAR cPSD| 16857960
, Total marks: 100
RSK4802
GOVERNANCE, RISK AND COMPLIANCE MANAGEMENT
Exam duration: 3 hours
This paper consists of 13 pages.
Instructions:
1. Answer all the questions.
2. The use of the Invigilator App is compulsory for the RSK4802 module.
3. Scan the QR code below.
,Question 1 [20 marks]
The South Reserve Bank (the Bank) has fined Capitec and the local branch of Deutsche Bank a combined
total of R25m in 2016 for shortcomings in the systems they have in place to combat money laundering. This
was reported in the Bank’s Banking Supervision Departments’ annual report and in the Business Day
newspaper.
The Bank also announced that deputy governor Kuben Naidoo would take over as registrar of banks from
Rene van Wyk, who will retire as registrar at the end of this year. Naidoo, who will serve in both the deputy
governor and registrar roles, helping to facilitate the transition to the new Twin Peaks regulatory system.
The Bank Supervision Department is responsible for ensuring that banks have systems and measures in place
to comply with the provisions of the Financial Intelligence Centre Act (FICA) on money laundering and
terror financing.
The Bank emphasised the decision to impose administrative sanctions on Deutsche Bank and Capitec "was
not based on any evidence that Deutsche Bank or Capitec facilitated transactions relating to money
laundering and/or financing of terrorism activities."
However, Capitec was fined R5m for failing to report cash transactions above R24,999 to the
Financial Intelligence Centre in line with the legislation and it was directed to take remedial action.
Deutsche Bank’s "know your customer" measures were inadequate and it was fined R10m for this and was
directed to address deficiencies in its controls and systems related to detecting property related to terrorism.
The Bank confirmed in February 2015 that the Reserve Bank had fined it following a routine inspection that
had found inadequacies in Deutsche’s ‘know your customer’’ processes and other FIC related controls.
Extracted from Business Day 25 May 2016
1.1 Read the report from the Business Day and identify any four possible risks that the banks faced with the
Financial Intelligence Centre Act. (4)
, 1.2 Give reasons from the article why the Bank imposed administrative fines on Capitec and Deutsche Bank.
(3)
1.3 Suppose you are a compliance officer at Deutsche Bank. Explain to the compliance staff members what
is required for the bank to comply with the “know your customer” (KYC) legislative requirements under
FICA. (3)
1.4 In the context of this report, identify and describe the nature of compliance monitoring role by the
regulator. (7)
1.5 Under the “know your customer” concept, list the three types of identity documents that are considered
adequate for the purpose of identifying a potential client. (3)
, Total marks: 100
RSK4802
GOVERNANCE, RISK AND COMPLIANCE MANAGEMENT
Exam duration: 3 hours
This paper consists of 13 pages.
Instructions:
1. Answer all the questions.
2. The use of the Invigilator App is compulsory for the RSK4802 module.
3. Scan the QR code below.
,Question 1 [20 marks]
The South Reserve Bank (the Bank) has fined Capitec and the local branch of Deutsche Bank a combined
total of R25m in 2016 for shortcomings in the systems they have in place to combat money laundering. This
was reported in the Bank’s Banking Supervision Departments’ annual report and in the Business Day
newspaper.
The Bank also announced that deputy governor Kuben Naidoo would take over as registrar of banks from
Rene van Wyk, who will retire as registrar at the end of this year. Naidoo, who will serve in both the deputy
governor and registrar roles, helping to facilitate the transition to the new Twin Peaks regulatory system.
The Bank Supervision Department is responsible for ensuring that banks have systems and measures in place
to comply with the provisions of the Financial Intelligence Centre Act (FICA) on money laundering and
terror financing.
The Bank emphasised the decision to impose administrative sanctions on Deutsche Bank and Capitec "was
not based on any evidence that Deutsche Bank or Capitec facilitated transactions relating to money
laundering and/or financing of terrorism activities."
However, Capitec was fined R5m for failing to report cash transactions above R24,999 to the
Financial Intelligence Centre in line with the legislation and it was directed to take remedial action.
Deutsche Bank’s "know your customer" measures were inadequate and it was fined R10m for this and was
directed to address deficiencies in its controls and systems related to detecting property related to terrorism.
The Bank confirmed in February 2015 that the Reserve Bank had fined it following a routine inspection that
had found inadequacies in Deutsche’s ‘know your customer’’ processes and other FIC related controls.
Extracted from Business Day 25 May 2016
1.1 Read the report from the Business Day and identify any four possible risks that the banks faced with the
Financial Intelligence Centre Act. (4)
, 1.2 Give reasons from the article why the Bank imposed administrative fines on Capitec and Deutsche Bank.
(3)
1.3 Suppose you are a compliance officer at Deutsche Bank. Explain to the compliance staff members what
is required for the bank to comply with the “know your customer” (KYC) legislative requirements under
FICA. (3)
1.4 In the context of this report, identify and describe the nature of compliance monitoring role by the
regulator. (7)
1.5 Under the “know your customer” concept, list the three types of identity documents that are considered
adequate for the purpose of identifying a potential client. (3)
