Financial institutions, instruments and markets

Latest information, developments and statistics, with website addresses provided to allow students to access up to the minute, real-world data. Real-world examples throughout the text help students relate theory to pracical situations.

Principles of equity and trusts

The Principles of Equity and Trusts 3rd edition provides a comprehensive summation of the principles of equity, the law of trusts and equitable remedies. The book is designed to meet the needs of both students and practitioners.

It includes developments in areas such as the relationship between common law and equity, undue influence, tracing, interim injunctions, and resulting trusts. Covering the general principles associated with the equity and trusts jurisprudence, this textbook is useful for undergraduate study of the subject.

SME owners at personal financial risk

Phillip Kemp's article ("Increase will stifle ambition", Opinion, March 3) highlighted two main issues related to the small business sector, namely financial risk and its collective role in the employment of the Australian workforce.

Job satisfaction among financial planners in Australia

Purpose - Job satisfaction has been the subject of a considerable body of research. In this study, the authors examine job satisfaction among financial planners in Australia, a relatively new profession which has been the subject of very little research.

Method/Approach - A national survey of financial planners was conducted, using a sample of convenience drawn from websites of two large organisations in the financial and insurance industry employing, or having agency agreements with, financial planners. A job satisfaction questionnaire designed for Australian conditions was used.

Findings - Based on a literature review, hypotheses were examined regarding the relationship between job satisfaction and age, job tenure, gender and type of employing organisation, and between job satisfaction and motivation. Results of this survey indicated little correlation between job satisfaction and age, gender, tenure or type of employing organisation. On the other hand, a positive relationship between job satisfaction and motivation was evident.

Practical implications – Respondents comments helped elucidate reasons for financial planner’s job satisfaction or dissatisfaction. Observations provided indicators that may help management nurture a positive job response among employees.

Value of this paper – Practically, this paper contributes to an underdeveloped area of research. It highlights scope for future research in two particular fields. Firstly, in-depth case studies to explore more thoroughly issues of job satisfaction and dissatisfaction. Secondly, with access to a larger number of employed financial planners a comparative study between those and self-employed financial planners on the subject of job satisfaction may enlighten managers and the profession generally.

Money laundering control and suppression of financing of terrorism : some thoughts on the impact of customer due diligence measures on financial exclusion

Purpose – The purpose of this paper is to explore the relationship between anti-money laundering (“AML”) and combating of financing of terrorism (“CFT”) customer due diligence (“CDD”) measures in the financial services industry, and exclusion from financial services.
Design/methodology/approach – An introduction to the concept of financial exclusion is provided as well as an overview of international AML/CFT CDD standards. The paper highlights a softening of national CDD measures in South Africa and the UK to lessen the impact on financial exclusion.
Findings – Countries should consider the impact that CDD requirements may have on financial exclusion when they design their AML/CFT systems.
Research limitations/implications – Multi-discilinary research is required to improve the understanding of the broader interaction between AML/CFT objectives, financial exclusion and economic development, especially in countries with a large informal economy.
Practical implications – CDD requirements may unnecessarily exacerbate financial exclusion if they are not formulated with care to reflect the reality of the particular country setting.
Originality/value – The paper offers insights into the international standards resulting to the identification of clients and the experiences in the UK and South Africa regarding the implementation of these standards on financial exclusion.

Client identification and money laundering control : perspectives on the Financial Intelligence Centre Act 38 of 2001

The Financial Intelligence Centre Act 38 of 2001 (FICA) compels certain persons and institutions (defined as "accountable institutions'') to identify and verify the identity of a new client before any transaction may be concluded or any business relationship is established.1 Accountable institutions are listed in schedule ¹ to FICA and include banks, brokers, financial advisers, insurance companies, attorneys and estate agents. This duty to identify new clients came into effect on 30 June 2003. However, FICA also requires a similar procedure to be followed in respect of all current clients. Current clients are those with whom an accountable institution had business relationships on 30 June 2003.² After 30 June 2004 an institution may not conclude a transaction in the course of its business relationship with an unidentified current client, until it has established and verified that client's identity as prescribed. An institution that concludes any transaction in contravention of this prohibition, commits an offence and is liable to a fine not exceeding R10 million or to imprisonment of up to 15 years.³

The majority of accountable institutions and their clients failed to meet the June 2004 current client identification deadline.4 This failure posed serious economic and legal risks. With a few days to spare, the minister of finance granted a partial and temporary exemption in respect of these requirements. This article explores the statutory scheme for identification and re-identification of clients and some of the practical problems that were encountered. The June 2004 exemptions from these requirements are also considered and proposals for law reform are made.

The discussion of the FICA identification scheme necessitates the following brief overview of the international and South African money laundering control framework.

1 s 21(1) of FICA.
2 s 21(2) of FICA. See also s 82(2)(b).
3 s 46(2) of FICA read with s 68(1) of FICA.

Financial crime in South Africa

During the 1990s economic crime began to spiral in South Africa. This phenomenon coincided with the country's transition to a democratic state. The article outlines a number of steps that South Africa took to align its laws with international standards and to improve the legal tools of law enforcement to address the crime wave. A number of successes, for instance the improvement in tax morality, are pointed out but it is argued that co-ordination and co-operation between law enforcement agencies require more attention.

Implementing FATF standards in developing countries and financial inclusion : findings and guidelines

This report, emanating from a project commissioned by the FIRST Initiative, considers the impact of the implementation of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) controls on financial inclusion in five countries (Indonesia, Kenya, Mexico, Pakistan and South Africa). Based on these findings, it develops a set of guidelines to assist the authorities in developing countries to design effective AML/CFT regimes that are compliant with Financial Action Task Force (FATF) standards and supports financial inclusion.
The report and guidelines will be of benefit to countries striving towards the dual goals of protecting their institutions against money laundering and the financing of terrorism as well as extending financial inclusion, irrespective of whether protective measures are being considered in the process of implementing or amending AML/CFT controls to meet the Forty Nine Recommendations of the FATF or in order to meet other, related international requirements, such as those set out in the 2000 United Nations Convention on Transnational Organised Crime or the 2003 United Nations Convention Against Corruption.
The project was supervised and guided by a steering committee consisting of representatives from the FIRST Management Unit, World Bank, International Monetary Fund (IMF), the UK’s Department for International Development (DFID), the Consultative Group to Assist the Poor (CGAP), the South African National Treasury, the FinMark Trust and Professor Nikos Passas, an acknowledged world expert on AML/CFT standards and implementation.