Published by: Navigate Compliance | Date: October 2025
Category: Regulatory Updates | Tags: FSCA, CIS, Financial Regulation, Compliance
Understanding FSCA Communication 16 of 2025
The Financial Sector Conduct Authority (FSCA) has released Communication 16 of 2025, a pivotal update to the conduct rules for Collective Investment Schemes (CIS) in South Africa.
This communication strengthens investor protection, market integrity, and the fair treatment of customers—cornerstones of the FSCA’s market-conduct mandate. It affects CIS managers, trustees, financial service providers, and linked investment service providers (LISPs) distributing CIS products.
“The FSCA is moving from tick-box compliance to outcome-based conduct — requiring firms to prove they deliver fair investor outcomes.”
Key Highlights
1️⃣ Investor Fairness and Transparency
Managers must ensure all fund information is accurate, comparable, and clear, covering:
- Transparent pricing and fee disclosure
- Risk classification and liquidity information
- Fair treatment in unit allocation and redemption
2️⃣ Product Governance and Suitability
Firms must maintain strong product-governance frameworks, including:
- Ongoing product-performance reviews
- Oversight of distribution partners
- Trustee accountability for investor outcomes
3️⃣ Operational and Risk Oversight
The FSCA stresses integrated risk management for liquidity, valuation, outsourcing, and cyber resilience.
4️⃣ Global Alignment
The update aligns with IOSCO’s Principles of CIS Operation, positioning South Africa within global best practice for collective investment regulation.
Why It Matters
CIS products remain one of South Africa’s most trusted savings vehicles. Yet, evolving investor expectations and digital distribution models demand greater transparency and governance.
For financial institutions, this means strengthening:
- Conduct-risk management frameworks
- Governance and reporting mechanisms
- Disclosure documents and marketing materials
Practical Steps for Compliance
- Review Fund Governance Structures – Ensure board and trustee independence meets new FSCA expectations.
- Update Product Approval Processes – Align design and distribution with target-market needs.
- Refresh Disclosure Documents – Standardise risk and performance information.
- Embed Conduct Culture – Train staff to think outcomes, not checklists.
💡 Navigate’s Perspective
At Navigate Compliance, we view Communication 16 of 2025 as a progressive step toward future-fit regulation.
It reinforces our belief that compliance + innovation = trust.
Navigate supports CIS managers with:
- FSCA gap assessments & conduct readiness audits
- Governance framework design & training
- Disclosure and conduct risk reviews
Through Navigate Learning, professionals can access accredited courses in Financial Compliance, AML, and Governance to meet FSCA standards.
Key Takeaways
- Communication 16 of 2025 modernises CIS conduct rules.
- Investor fairness and governance are now measurable outcomes.
- The FSCA is paving the way for COFI implementation.
- Early compliance action builds credibility and resilience.
Frequently Asked Questions (FAQs)
Q1. What is FSCA Communication 16 of 2025 about?
It updates conduct, governance, and investor-protection standards for Collective Investment Schemes (CIS) in South Africa.
Q2. Who must comply with it?
CIS managers, trustees, LISPs, and FSPs involved in CIS management or distribution.
Q3. How does this link to the COFI Bill?
It supports the Conduct of Financial Institutions (COFI) Bill by embedding outcomes-based supervision ahead of full implementation.
Q4. What are the risks of non-compliance?
Possible FSCA sanctions, administrative penalties, and reputational damage.
Q5. How can Navigate help?
Navigate offers consulting, audits, and training to ensure CIS managers achieve full regulatory readiness.
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