1. Presented by the Inspired Learning Regulatory Academy
FAIS Definitions
Presented by the Inspired Learning Regulatory Academy

2. General duty of provider
Source: Section 2 of the General Code of Conduct
And in the integrity of financial services industry
Skill and dilligence
With due care,
Honestly and fairly
In interests of clients
Render financial services

3. Client Specific person or group of persons Excluding general public
Source: FAIS Introductory Provisions Definitions
Specific person or group of persons
Excluding general public
Who may be rendered a financial service intentionally
Or is successor in title of such person
Or the beneficiary of such person

4. Who is a representative
Source: FAIS Introductory Provisions Definitions
A person
Who renders a financial service
To a client
On behalf of a provider
By virtue of an employment contract
By virtue of a mandate from a provider
Outcome 1

5. No guidance or influence
Not a representative
Source: FAIS Introductory Provisions Definitions
A person providing clerical, technical, administrative, legal, accounting or related services IF service requires:
No judgement
No recommendations
No opinions
No guidance or influence
Not financial service
Outcome 1

6. Rendering financial services
Representatives role
Rendering financial services
Representative
Practice Management
Fit and Proper
Regulatory
compliance
Outcome 1

7. Who is a key individual Outcome 2
Source: FAIS Introductory Provisions Definitions
In relation to authorised Financial Service Provider or Representative
The activities or Body, Trust or Partnership
Relating to rendering of financial service or
Carrying on business as
Responsible for managing or overseeing
Corporate Body or Trust consisting of one natural person
Corporate or unincorporated Body, Trust or Partnership
Means any natural person
As Member, Director, Shareholder or Trustee, means any natural person
Outcome 2
Source: FAIS Introductory Provisions Definitions

8. Sole proprietor (FSP’s)
5. Fit and Proper
Source: BN 103, 104,105,106 and 60 and INSETA
Fit and Proper requirement
FSP’s
Sole proprietor (FSP’s)
Key individuals
Reps
Personal character qualities
Yes
Competency No
Yes
Experience No
Yes
Qualifications No
Yes
Regulatory Exams No
Yes
CPD No
Yes
Operational ability
Yes No
Financial Soundness
Yes No
Outcome 5

9. 9. Not fit and proper Outcome 9 Criminal or Civil proceedings
Source :BN 106 of 2008
Criminal or Civil proceedings
Disqualified/
Prohibited by Court for
Management
involvement
Statutory / Voluntary
Professional Body
5 years before
Application
Approval
Appointment
Authorisation withdrawn
Dishonesty
Negligence
Incompetence
Denied Membership
Dishonesty Negligence
Incompetence
Outcome 9

10. Register of representatives
Source: Section 13(2) of FAIS Act
FSP must maintain Register of Representatives
Updated regularly and ready for inspection
Contain all Representatives and Key Individuals names
Is Rep acting as employee or mandatory
Categories Reps competent to render financial services
Registrar may request information from FSP
Allows for maintenance and update central register
Register can be published in appropriate media
Person complying with FAIS for Rep is regarded as Rep
Outcome 6

11. Advice is Representatives responsibility
Source: FAIS Introductory Provisions Definitions
Advice
RecommendationGuidance
Proposal
Financial Nature
Client
Buying a
Financial
product
Investing in Financial product
Using financial product in another transaction, cede or pledge benefits or rights
Changes in nature of financial product – replacement, termination of buying or termination of investing in product
Outcome 7

12. Not advice
Source: FAIS Introductory Provisions Definitions
Analysis or report on a financial product without express or implied recommendation, guidance or proposal that transaction iro product meets clients needs, investment objectives or financial situation
Advice by pension fund board member, organisation and friendly society to members on benefits enjoyed by members. Advice by board members to members of medical scheme on health care benefits
Outcome 7

13. 7. Not advice Procedures to financial transaction
Source: FAIS Introductory Provisions Definitions
Procedures to financial transaction
Information about financial product
Describing financial product
Advice is not factual advice
Displaying promotional material
Answering admin queries

14. Intermediary service Outcome 7
Any act except giving of advice
Resulting in
client entering or offering to enter into transaction in respect of financial product with product provider
For client or on behalf of product supplier
With a view to receiving, submitting or processing claims of client against product supplier
With view to collecting or accounting for premiums or other money which client has to pay product supplier for financial product
With a view to buying, selling or dealing in managing, administering, keeping in safe custody, maintaining, servicing a financial product purchased by client from product supplier OR
Outcome 7

15. Intermediary service is not
Source: FAIS Introductory Provisions Definitions
A Bank acting as a conduit between client and product supplier in collecting premiums or money
An intermediary service by product supplier which is also a financial institution and regulated as such
Outcome 7

16. Reps obligation to be registered
Source: Section 13 of FAIS
1. Render services for authorised FSP only
2. FSP must accept responsibility for Reps activities in agreement
3. Reps must ensure necessary documents are available for clients
4. Written mandate must be available to Reps to provide to clients
6. He has employment or mandate agreement with FSP
5. No one can act as Rep unless
Reps information on register of representatives
No one can act as rep unless
If Rep debarred can only operate again if procedures for re-appointment of rehabilitated Rep have been followed
Outcome

17. Responsibilities regarding licensing
Source: Board Notice103
FSP must ensure KI and Reps at all times
Are competent and fit and proper
Take reasonable steps to ensure compliance with code
And other applicable laws of conduct of business
Reps must ensure
They remain fit and proper
Undergo required training
And training in product and process
Understand and comply with FSP ethics and codes of conduct and FAIS code of conduct
Outcome 3

18. Responsibilities of Reps
Source: Section 16 (1) of Code of Conduct
Act honestly and fairly, with due skill, care and diligence, in interests of clients and integrity of financial services industry
Have and employ effectively resources, procedures and appropriate technological systems for proper performance of professional activities
Seek from clients appropriate and available information regarding financial situations, financial product experience and objectives in connection with financial services required
Act with circumspection and treat clients fairly in situation of conflicting interests
Comply with all applicable statutory and common law requirements applicable to conduct of business
Outcome 1

19. Purpose of debarment Outcome 38
Source: Section 14 (1) and 13 (2) and 8 of FAIS
To stop any Representative not competent to act or not fit and proper or who failed to comply with FAIS
From rendering new financial service
Authority to act as representative is withdrawn
Name of Representative or Key Individual removed from register
Provided debarment does not prejudice clients ability to get advice
Outcome 38

20. Why consider debarment
Source: Section 14 (2) FAIS Act
Reasons for debarment are non-compliance with relevant fit and proper requirements or contravention of any provision of FAIS. The FSP may also take into consideration information from the Registrar, Ombud or anyone else.
Outcome 39

21. A provider cannot debar a person no longer in their employ
Debarment process
Source: Section 14(1) of FAIS Act
A FSP must debar a Representative in the following manner:
Withdraw authority to act for the FSP
Remove the Representative from the Representative register
Ensure the debarment does not prejudice interests of Representatives clients
Ensure unconcluded business of Representative is concluded
A provider cannot debar a person no longer in their employ
Outcome 40

22. Representative debarment recourse
Source: Section 14 (2) of FAIS
A debarred Representative may respond to the notice of debarment. The registrar must consider the response from the Representative and then decide to proceed with the debarment or not. The Representative must be notified of the decision.
BN 82 of 2003 states on reappointment of debarred Rep must provide substantiating documents, 12 months have elapsed, unconcluded business properly concluded, complaints and legal proceedings resolved and fit and proper status complied with
Outcome 41

23. Process to be followed by Registrar
Section 14 A of FAIS
On receipt of response registrar considers response and makes final order
If no response forthcoming, Registrar will only make decision if proof of delivery of service exists
Registrar issues notice of debarment- 14 days after date of notice of intention to debar
Notice must state grounds of debarment and terms attached thereto
Person is allowed an appeal
Notice dispatched by registered post
Name of person is placed on central register of debarred persons
Period of debarment is between 2 to 5 years
Outcome 42

24. Process to be followed by Registrar
Section 14 A of FAIS
If debarred person linked to other FSP’s, registrar will inform provider to remove name of person from register within 15 days of notice
If debarred person is a FSP regulatory action will ensue ito Section 9 of Act
An individual is debarred in individual capacity, no obligation by registrar to inform any other person
Most instances respondents do not respond and notices are returned as uncollected
Person cannot be traced is entered in FSB central database
Outcome 42

25. Debarment / FSP notifies registrar
Source: Section 14 (2) , (3) and (4) of FAIS Act
Section 14A of FAIS empowers Registrar to debar any person
FSP must have regard to information from Registrar, Ombud and other interested parties
Within 15 days of removal of names from Representatives register FSP must inform registrar in writing
Registrar may publish names in Gazette or appropriate public media
Outcome 42

26. Debarment by registrar
Source: Section 14 (2) , (3) and (4) of FAIS Act
Registrar may debar a person, including Representative for specified time from rendering financial service
Registrar must be satisfied person no longer meets requirements or has failed to comply with FAIS
FSP must within 5 days of being informed by registrar of debarment remove Representative from register
Outcome 42

27. Particular responsibilities of Reps
Source: Section 16 (1) of Code of Conduct
Adequate disclosures of relevant material information
Adequate and appropriate record keeping
Proper safe keeping and protection of funds and client documents
Appropriate and suitable guarantees or professional indemnity
Control or prohibition of incentives by provider
Any other matter necessary for achieving objectives of FAIS
Outcome 1

28. Acting under supervision
Supervision includes one or more of the following
Sign off by supervisor on advice given to client
Attending client meetings with supervisee
Post transaction sampling and follow up calls
Pre-transaction sign off
Scrutinize activities of supervisee
Outcome 8

29. When can Reps act under Supervision
Source: Board Notice 105 and 106
Services under supervision means financial services rendered by a Rep who does not have prescribed experience, qualification and RE exam requirements. Services then rendered under guidance, instruction or supervision of Supervisor
Sign-off by Supervisor on advice given by Rep
Pre-transaction sign-off
Attending meetings with Supervisee
Post transaction sampling
Follow up calls to clients
Supervisor can be a Representative or Key Individual
Outcome 8

30. When can Reps act under Supervision
Source: Board Notice 105
Category 1 practical experience
Gained in rendering of financial service
Active and ongoing
Knowledge, skills and expertise
Through rendering of financial services
Supervisor
Qualified and meets fit and proper requirements
Guides supervisee
Outcome 8