South Africa's financial conduct regulator is taking on more staff and investigations as part of a crackdown on money laundering and terrorism financing after criticism by an international watchdog, the regulator's commissioner said.
The Financial Sector Conduct Authority (FSCA), which is funded through industry levies, has also tripled its budget for the 2023-24 fiscal year from 2022-23 to finance the expansion, Unathi Kamlana said in an interview.
The drive aims to fix shortcomings identified by the international Financial Action Task Force (FATF) last year when it placed South Africa in its "grey list" of countries under special scrutiny over implementing standards to prevent money laundering and terrorism financing.
South Africa is working to exit the grey list in 2025.
In its last two financial years, the FSCA has more than doubled its supervisory capacity and "expects another doubling for the next financial year", Kamlana said.
"We were at seven and will probably end up with about 36 personnel by 2025," he added.
The authority has seen a 300% jump in supervisory activities this financial year and aims to impose bigger fines for breaches of money laundering and terrorist financing rules, Kamlana said.
"We've received quite good cooperation from financial institutions," he said. "I think the financial sector quite appreciates the need for us to address the issues around grey listing and we hope that we will make further progress this year in addition to the progress that we've already made."
The FSCA is also working to regulate crypto currencies after they were brought within its remit in 2022.
Kamlana said the authority had received about 340 applications for crypto currency licences across different types of business models, including exchanges, and was assessing them.
"We expect that sometime in March we should be able to license maybe 60 or so of those and then proceed with others," he said.
On Thursday, the National Treasury said the FATF had confirmed that five of the 22 actions it had identified had been addressed or largely addressed.
"Whilst South Africa is on track to address all the outstanding action items, it remains a tough challenge to address all 17 of the remaining action items by February 2025," the Treasury said.
