In short
FICA asks for documents because the law requires whoever deals with you to know who you are. An accountable institution is simply someone named in Schedule 1 to that Act. The list confers the status. You do not apply for it and nobody awards it.
Credit providers are on that list. So are people providing credit under agreements excluded from the National Credit Act. Being outside the National Credit Act therefore does not put a lender outside FICA, and that is the point most often missed.
01A status you have, or do not
Nothing declares you one and nothing certifies it. If your business falls within a Schedule 1 item, you are one. Whether or not you have noticed, registered, or been told.
| Schedule 1 item | Who it catches |
|---|---|
| Item 11(a) | A person carrying on the business of a credit provider as defined in the National Credit Act |
| Item 11(b) | A person carrying on the business of providing credit under agreements excluded from the National Credit Act by section 4(1)(a) or (b) |
02What it requires
- Register with the Financial Intelligence Centre. Every accountable institution must, in the time and manner set. It is a separate step from registering as a credit provider with the NCR. You may need both, and one does not stand in for the other.
- Identify and verify your client. When engaging with a prospective client to enter into a single transaction or establish a business relationship, you must establish and verify their identity — and do it in accordance with your own programme.
- Have a Risk Management and Compliance Programme. Developed, documented, maintained and implemented. It is the document that decides what your other duties look like in practice, since the identification and monitoring obligations are expressed by reference to it.
- Train the people who do the work. A separate statutory requirement, not a nice-to-have.
- Report suspicious transactions. Not discretionary.
The duty goes beyond the client. Where somebody acts for another, you have to check that other person too, and check that they may act. Since 2017 the regime is risk-based rather than a fixed checklist. That is why the duties keep pointing back at your own programme.
03The duty that binds everybody
Section 29 is wider than the rest of the Act. It binds any business and the people in it, not only accountable institutions.
Anyone who runs a business, manages one or works in one has to report two things. That the business has taken in the proceeds of crime. Or that a deal has no apparent lawful purpose. The duty bites where they know or ought reasonably to have known or suspected it.
04Why this protects you
It is easy to read document requests as friction. Turn it round. This is how you find out who you are lending to, and it is the cheapest check you will ever do.
- An identity you have verified is an identity you can sue.
- A borrower who cannot or will not provide ordinary documents has told you something important, at no cost to you.
- A trail of properly collected documents is also the trail that answers a question two years later. Lesson ten called that the third document.
- And the arrangement that objects to being identified is the arrangement lesson fifteen was about.
05What you will be asked for, and what to ask
| If you are | Expect to provide | And to ask for |
|---|---|---|
| Supplying capital through a business | Identity and address documents, source of funds, and tax details | Their FIC registration, and who holds your documents |
| Lending in your own name | The same, to attorneys and to any administrator | The borrower's equivalent, in full |
| Lending to a juristic borrower | Your own documents regardless of the Act's reach | Registration documents, directors, and who controls it |
One more question, for anybody holding your documents. How are they stored, who can see them, and when are they thrown away? That is a POPIA question rather than a FICA one. It is still a fair one to ask.
Next: the questions to ask before you sign anything.