The FSCA’s draft Conduct Standard for Section 13B pension fund benefit administrators
The FSCA’s Conduct Standard relating to Section 13B pension fund administrators is a new regulatory framework designed to replace the outdated Board Notice 24 of 2002. It aims to strengthen governance, compliance, and fair treatment of customers, in other words retirement funds and their members, by benefit administrators who administer pension fund benefits.
The FSCA has confirmed that the amended draft Conduct Standard, incorporating industry’s comments, was submitted to Parliament on 1 April 2025.
Axiomatic considers the following to be the main points of the Conduct Standard
- Governance and business conduct: Administrators must implement a robust governance framework, including detailed policies that ensure compliance with the Treating Customers Fairly (TCF) principles. This includes documenting, monitoring, and regularly reviewing governance effectiveness.
- Fit and proper requirements: Directors, senior managers, and heads of control functions must meet specific fit and proper standards to ensure competent and ethical leadership.
- Administration agreements and outsourcing: The standard sets clear requirements for administration agreements with funds, including indemnity and fidelity insurance. Outsourcing of administration functions must be to FSCA-approved administrators, with proper oversight and controls in place.
- Conflicts of interest: Administrators must adopt and implement conflict of interest policies, ensuring all employees are aware of these policies and that conflicts are managed effectively.
- Communication and complaints management: Clear rules govern communication with funds and members, including disclosures and structured complaints handling processes with proper record keeping.
- Data management: The standard prescribes strict data management and record keeping requirements, including minimum retention periods and controls over third party data handling.
- Financial and operational controls: Administrators must maintain sound financial practices, including trust accounts, auditing, and statutory reporting. Operational procedures must ensure data security and accurate administration.
The draft Conduct Standard proposes an implementation period of 6 months for administrators to comply. The FSCA, however, has agreed to a staggered implementation, with some conditions coming into effect on publication date, while others will allow for either a 6- or 12-month implementation period.
Note to reader:
This is a very comprehensive Conduct Standard with numerous details and implications for administrators. If you fulfil an administrative function or an oversight role, we suggest you read the Conduct Standard.
Compliance Starts with a Conversation
Understanding the FSCA’s draft Conduct Standard is crucial. Speak to our team for professional advice and a clear path forward.
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