Please continue to act within the Code of Conduct
Good day to all our members,
As stated previously, we at the IDA and Lightstone Auto are focused on understanding the ever-increasing challenges facing our businesses and we are committed in finding solutions or to forewarn you, our Dealer Members, of any dangers.
At times, it is better to be a prophet from a different country than to be the resident prophet. We see clouds gathering once again within the compliance landscape in our industry.
I do believe that you have received the latest FAIS newsletter as well as the Moonstone monitor. If one studies these newsletters from the Regulator and our compliance business partners, it is clear that the focus is on incentives offered by suppliers to you (our Dealer Members) and/or your Finance and Insurance Managers, to give them (the suppliers) the edge in a very competitive marketplace.
In the latest FAIS newsletter the Financial Services Board focuses on the use of vouchers that are offered by suppliers to incentivise F&I Managers to sell their products. Normally these vouchers are volume driven and the incentive/remuneration increases as sales increase on the product.
In most cases these vouchers are cash vouchers and/or loaded with points, which exceed the immaterial financial interest threshold of R1 000.00 per calendar year.
Section 3A of the General Code of Conduct For Authorised FSPs and Representatives provides for instances when financial interest is allowed.
Immaterial financial interest is defined in the code as “any financial interest with a determinable monetary value, the aggregate of which does not exceed R1 000.00 in any calendar year from the same third party in that calendar year received by a provider or representative of that provider for its direct benefit.”
Receiving or accepting incentives as described above gives rise to a serious conflict of interest and we urge you not to transgress or act outside of the Code of Conduct. If there is any uncertainty in your mind regarding the above, please make contact with your Financial Services Provider.
Best of luck and we wish you a successful month ahead.
Robbie Starke
General Manager: IDA |
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Heads-Up is a monthly electronic newsletter for members of the IDA. If, for any reason, you no longer wish to receive this communique, kindly unsubscribe here. Editorial co-ordination by The Hothouse Communications, 011 678 3545. | | | | |
