Novare CIS has responded to the press statement issued by the Financial Sector Conduct Authority (FSCA) on Friday, 13 April 2018 regarding the matter of a fine issued against Novare to the value of R30,000.
Novare says it would like to state upfront “that we appreciate and respect the due diligence and hard work of the financial services industry regulatory bodies and authorities. We thank the regulators for their continued hard work and for upholding the quality of the financial services industry. We welcome the feedback received from the Financial Services Board (FSB) and affiliates on all matters and strive to assist them in their task of quality assurance and industry compliance.”
Novare states that in March 2018, the FSB’s team of representatives conducted a due diligence review of Novare CIS. As part of the review, all Novare Minimum Disclosure Documents (MDDs) were reviewed. A discrepancy was subsequently highlighted on the Novare Money Market Fund MDD.
From September 2016 to September 2017, the Novare Money Market Fund MDD quoted performance data for the period 2010 to 2015 which applied to a period during which the fund was managed as a segregated fund. This period was prior to the fund being regulated by the Registrar. (A segregated fund is managed as an in-house fund prior to being registered. This is often done with the aim to achieve a well-established base of assets under management and subsequent track record.)
Novare says the MDD failed to clearly indicate and separate which performance figures that had been achieved whilst the fund was managed as a segregated fund and which figures had been achieved as a registered fund.
“Novare acknowledged the FSB’s recommendation for a note to be added, to clearly identify the performance figures with the respective period(s), as to not have the potential to be misleading and create the impression that the fund had a longer track record as a registered fund. While being managed as a segregated fund initially, Novare publishes the full track record of the fund with the aim to be transparent and to give investors a full view of the fund’s performance since inception.
Novare recognised and agreed with the FSB’s findings as we strive to, at all times, uphold the highest level of transparency and accurate fund data. We confirm that the data displayed for the entire track record of the fund, although managed as a segregated fund from 2010 to 2015, is correct. The data displayed for the fund whilst managed as a registered fund is also a true reflection of the fund’s performance.”
Novare confirms that it has achieved a satisfactory resolution of the matter with the FSB, that the fine has since been settled and the MDD updated.