REGULATED INDUSTRIES

Accountancy SA,  Dec 2007/Jan 2008  

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NATIONAL CREDIT REGULATOR GUIDELINE 001/2007 - ASSURANCE ENGAGEMENT

The National Credit Regulator (NCR) issued Guideline 001/2007 - Assurance Engagement on 28 September 2007. The guideline is available on the NCR website (www.ncr.org.za http://www.ncr.org.za) and is effective for reports dated on or after 1 July 2007.

The document provides guidance, in terms of section 16 (1)(b) of the National Credit Act and Regulations 67 and 68, on the assurance engagement and the subsequent report that must be prepared by the auditor for submission to the credit provider and the NCR.

This guideline is intended for credit providers who are by law required to appoint a registered auditor to perform an audit of their annual financial statements, and is not applicable to those credit providers that are not required by law to appoint a registered auditor to conduct an audit of their annual financial statements.

The NCR is currently drafting a second guideline for those credit providers that are not required by law to appoint a registered auditor.

EXTENSIONS FOR THE SUBMISSION OF RETIREMENT FUND FINANCIALS FOR 2006 AND 2007 YEAR ENDS

The Financial Services Board (FSB) has issued the following Information Circulars:

* 4 of 2007 - Interim Measures for the Electronic Submission of 2006 Financial Statements by All Funds

The period for electronic submission of 2006 financial statements for all funds has been extended to 30 November 2007. Funds with financial statements that have not been signed off by trustees by this date may submit the financial statements accompanied by an auditor's release letter. These financial statements will be noted on the FSB system as draft/provisional submissions. These funds must submit the final financial statements by 28 February 2008.

Mini funds are required to submit financial statements signed by the principal officer and the chairman of the Board of Trustees by 30 November 2007.

* 5 of 2007 - General Extension for the Electronic Submission of 2007 Financial Statements by All Funds in terms of section 33 of the Pension Funds Act, 24 of 1956 (as amended)

The FSB has granted general extension to all funds until 31 August 2008 and to underwritten retirement annuity funds until 30 October 2008 for the submission of 2007 financial statements.

These information circulars are available on the FSB website.

SCHEDULE 0 REPORT FOR PENSION FUNDS INVESTMENT ADMINISTRATORS

In order for an asset manager to administer the investments of a pension fund, the asset manager has to register as an investment administrator with the Financial Services Board in terms of section 13B of the Pensions Act, 1956. In terms of Regulation 32(2)(b) the asset manager is required to provide a report from his/her auditor in the form of Schedule 0.

The report includes some factual information but also requires the auditor to certify the following:

* That the bookkeeping, computer and control systems are adequate for the size and complexity of the business it is conducting/proposes to conduct.

* Adequate measures are in operation to ensure the continued safety of documents of title relating to assets held in safe custody.

Auditors have not been able to issue a report in this format for some time and, in particular, they cannot certify aspects of internal control. Another difficulty is that in many instances the systems and controls are not yet in place because the asset manager does not yet have a licence for this business.

Concerns have been raised that, where the auditor has submitted a report giving some comfort but not in the exact format of Schedule 0, such a report has been rejected by the FSB, with the result that the required licence has not been granted.

The FSB has indicated that it is aware of the issue. Until such time that the report has been updated, the FSB will accept a report from the auditor in a format that can be signed off, provided that the administrator attaches a business plan to prove that it is viable.

EXCHANGE CONTROL CIRCULARS

The Exchange Control department of the South African Reserve Bank (EXCON) has issued the following Exchange Control Circulars:

* 17/2007 - Authorised Dealers in Foreign Exchange with limited authority (ADLAs) This circular advises that the formal guidelines for regulating the appointment and conduct of ADLAs have been approved by the Minister of Finance. A new Section A.4 has been incorporated into the Exchange Control Rulings (the Rulings) dealing with the submission of applications to conduct the business of an ADLA.

* 18/2007 - Authorised Dealers in Foreign Exchange

Sasfin Bank Limited has been appointed as an ADLA. The Rulings have been updated accordingly.

* 19/2007 - Amendment to the Exchange Control Rulings

Sections A.3(B) and B.2(A) have been amended.

* 20/2007 - Inward listings by foreign issuers of debt instruments on the JSE Limited Authorised Dealers are referred to Section H.(C) of the Rulings. The JSE Limited can now also facilitate the listing of debt instruments by foreign issuers. The Rulings have been amended accordingly.