2. REPORT BACK ON THE IMPLEMENTATION OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT (“FAIS”)

3. PORTFOLIO COMMITTEE ON FINANCE 15 AUGUST 2003 GERRY ANDERSON DEPUTY EXECUTIVE OFFICER

4. CONTENT 1. INTRODUCTION 2. IMPORTANT DEFINITIONS 3. ADVISORY COMMITTEE ON FINANCIAL SERVICES PROVIDERS (SECTION 5) 4. RECOGNISED BODIES (SECTION 6) 5. FEES (SECTION 41) 6. EXEMPTIONS (SECTIONS 12 & 44)

5. CONTENT (CONTINUED) 7. CODES OF CONDUCT (SECTION 15) 8. OFFICE OF OMBUD FOR FINANCIAL SERVICES PROVIDERS (SECTIONS 20 – 31) 9. REGULATIONS (SECTION 35) 10. DETERMINATION OF SECTION 7 DATE 11. PUBLICATIONS IN GAZETTE

6. 1.INTRODUCTION PROMULGATION OF MAJORITY OF PROVISIONS OF THE FAIS ACT (15 NOVEMBER 2002) PROMULGATION OF SECTIONS 20 – 31 RE OFFICE OF THE OMBUD (8 MARCH 2003) SECTION 13(1)(B) - REPRESENTATIVES

7. 2. IMPORTANT DEFINITIONS FINANCIAL SERVICE PROVIDERS KEY INDIVIDUALS REPRESENTATIVES FINANCIAL PRODUCTS INTERMEDIARY SERVICES ADVICE

8. 3. ADVISORY COMMITTEE ON FINANCIAL SERVICES PROVIDERS (SECTION 5) INITIAL APPOINTMENT OF MEMBERS BY MINISTER (25 NOVEMBER 2002) ADDITIONAL APPOINTMENTS BY MINISTER (10 MARCH 2003) MEETINGS OF ADVISORY COMMITTEE (18 AS AT 7 AUGUST 2003)

9. 4. RECOGNISED BODIES (SECTION 6) ROLE OF RECOGNISED BODIES AS DELAGATEES DELEGATED FUNCTIONS (2 MAY 2003) AUTHORISATIONS APPROVED IN PRINCIPLE

10. 4. RECOGNISED BODIES (CONTINUED) NAMES OF PROVISIONALLY APPROVED RECOGNISED BODIES: -THE ARCAY GROUP LIMITED -COMPLIANCE INSTITUTE OF SA -CELESTIS BROKER SERVICES -GROUP ADMINISTORS FORUM -PRICEWATERHOUSECOOPERS -FINANCIAL PLANNING INSTITUTE

11. 4. RECOGNISED BODIES (CONTINUED) -FOREX INVESTMENT ASSOCIATION - INDEPENDENT BROKERS COUNCIL -MOONSTONE INFORMATION REFINERY (PTY) LTD. -THE SA FINANCIAL SERVICES INTERMEDIARY ASSOCIATION

12. 5. FEES (SECTION 41) SERVICES REQUIRED 1. RECOGNISED REPRESENTATIVE BODIES 1.1APPLICATION BY A REPRESENTATIVE BODY FOR RECOGNITION BY THE FINANCIAL SERVICES BOARD IN TERMS OF SECTION 6(4) OF THE ACT. FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R20 000 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% N/A

13. 5. FEES (CONTINUED) SERVICES REQUIRED 1.2DELEGATION OF A POWER TO A REPRESENTATIVE BODY BY THE REGISTRAR, AND RECOGNITION BY THE FINANCIAL SERVICES BOARD [(SECTION 6(3) AND (4), RESPECTIVELY, OF THE ACT] FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R5 000 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% N/A

14. 5. FEES (CONTINUED) SERVICES REQUIRED 1.3ADDITIONAL SERVICES RENDERED RELATING TO RECOGNISED BODIES FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R500 PER HOUR FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% N/A

15. 5. FEES (CONTINUED) SERVICES REQUIRED 2.LICENSING AND MATTERS INCIDENTAL THERETO 2.1 APPLICATION FOR THE ISSUE OF A LICENCE AS A FINANCIAL SERVICES PROVIDER (EXCLUDING AN ADMINISTRATIVE FSP AND A DISCRETIONARY FSP) FOR THE RENDERING OF ADVICE AND/OR INTERMEDIARY SERVICES FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R1 000 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% R400

16. 5. FEES (CONTINUED) SERVICES REQUIRED 2.2APPLICATION FOR THE ISSUE OF A LICENCE AS A DISCRETIONARY FSP. 2.3APPLICATION FOR THE ISSUE OF A LICENCE AS A DISCRETIONARY FSP IN ADDITION TO A LICENCE REFERRED TO IN 2.1 AND 2.4 FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R10 000 R9 000 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% R4 000 R3 600

17. 5. FEES (CONTINUED) SERVICES REQUIRED 2.4APPLICATION FOR THE ISSUE OF A LICENCE AS AN ADMINISTRATIVE FSP 2.5APPLICATION FOR THE ISSUE OF A LICENCE AS AN ADMINISTRATIVE FSP IN ADDITION TO A LICENCE REFERRED TO IN 2..1 AND 2.2 FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R30 000 R15 000 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% R12 000 R6 000

18. 5. FEES (CONTINUED) SERVICES REQUIRED 2.6APPLICATION FOR THE ISSUE OF A LICENCE AS AN ADMINISTRATIVE FSP OR DISCRETIONARY FSP FOR A PERSON WHO IMMEDIATELY PRIOR TO THE DATE CONTEMPLATED IN SECTION 7(1) OF THE ACT WAS AN INVESTMENT MANAGER FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R500 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% N/A

19. 5. FEES (CONTINUED) SERVICES REQUIRED (INCLUDING A LISP) APPROVED IN TERMS OF SECTION 4(1)(a) OF THE STOCK EXCHANGES CONTROL ACT, 1985 (ACT NO 1 OF 1985), OR SECTION 5(1)(a) OF THE FINANCIAL MARKETS CONTROL ACT, 1989 (ACT NO 55 OF 1989), AS THE CASE MAY BE. FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60%

20. 5. FEES (CONTINUED) SERVICES REQUIRED 2.7APPLICATION FOR APPROVAL AS A COMPLIANCE OFFICER: a) EXERCISE OF THE FUNCTIONS REFERRED TO IN SECTION 2(C )(i), (ii) AND (iii) OF THE DETERMINATION OF CRITERIA AND GUIDELINES FOR APPROVAL OF COMPLIANCE OFFICERS, 2003 FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R700 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% R280

21. 5. FEES (CONTINUED) SERVICES REQUIRED b)EXERCISE OF OTHER FUNCTIONS REFERRED TO IN THE SAID DETERMINATION FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R300 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% R120

22. 5. FEES (CONTINUED) SERVICES REQUIRED 2.8APPLICATION FOR APPROVAL OF A KEY INDIVIDUAL OF A FINANCIAL SERVICES PROVIDER 2.9APPLICATION FOR APPROVAL OF A FINANCIAL SERVICES PROVIDER’S AUDITOR IN TERMS OF SECTION 19 OF THE ACT. FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R150 PER KEY INDIVIDUAL R150 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% R60 PER KEY INDIVIDUAL R60

23. 5. FEES (CONTINUED) SERVICES REQUIRED 2.10AMENDMENT OF A LICENSING RESTRICTION REGARDING A LIMITATION ON THE FINANCIAL PRODUCT IN RESPECT OF WHICH ADVICE AND/OR INTERMEDIARY SERVICE IS RENDERED. FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R750 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% R300

24. 5. FEES (CONTINUED) SERVICES REQUIRED 2.11AMENDMENT OF A LICENSING CONDITION. 2.12 APPLICATION FOR EXEMPTION FROM ANY PROVISION OF THE ACT (EXCLUDING EXEMPTION IN TERMS OF SECTION 12 OF THE ACT) SUBMITTED WITH AN APPLICATION FOR A LICENCE AS FINANCIAL SERVICES PROVIDER. FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R500 R700 FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% N/A

25. 5. FEES (CONTINUED) SERVICES REQUIRED 2.13APPLICATION FOR EXEMPTION FROM ANY PROVISION OF THE ACT, AFTER LICENSING. 2.14APPLICATION BY A FINANCIAL SERVICES PROVIDER FOR APPROVAL OF AN ADDITIONAL KEY INDIVIDUAL. FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R900 R150 PER KEY INDIVIDUAL FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% N/A

26. 5. FEES (CONTINUED) SERVICES REQUIRED 2.15APPLICATION FOR A CHANGE IN NAME OF A FINANCIAL SERVICES PROVIDER. 2.16ADDITIONAL CERTIFIED COPY OF LICENCE CERTIFICATE IN TERMS OF SECTION 8(5)(a)(ii) OF THE ACT. FEES PAYABLE TO THE REGISTRAR FOR DIRECT APPLICATION R150 R50 PER COPY FEES PAYABLE TO THE REGISTRAR THROUGH RECOGNISED REPRESENTATIVE BODIES LESS 60% N/A

27. 6. CATEGORIES OF FSP’S CATEGORY (I) - LONG-TERM INSURANCE : CATEGORY A -SHORT-TERM INSURANCE: PERSONAL LINES -LONG-TERM INSURANCE: CATEGORY B -LONG-TERM INSURANCE: CATEGORY C -RETAIL PENSION BENEFITS -SHORT-TERM INSURANCE: COMMERCIAL LINES

28. 6.CATEGORIES OF FSP’S (CONTINUED) -PENSION FUND BENEFITS (EXCLUDING RETAIL PENSION BENEFITS) -SECURITIES AND INSTRUMENTS -PARTICIPATORY INTERESTS IN COLLECTIVE INVESTMENT SCHEMES -FOREIGN CURRENCY DENOMINATED INVESTMENT INSTRUMENTS -HEALTH SERVICES BENEFITS

29. 6. CATEGORIES OF FSP’S (CONTINUED) -DEPOSITS DEFINED IN THE BANKS ACT EXCEEDING 12 MONTHS -DEPOSITS DEFINED IN THE BANKS ACT - 12 MONTHS OR LESS -FRIENDLY SOCIETY BENEFITS

30. 6. CATEGORIES OF FSP’S (CONTINUED) CATEGORY (II) -DISCRETIONARY FSP CATEGORY (III) -ADMINISTRATIVE FSP (LISP)

31. 7.EXEMPTIONS (SECTIONS 12 & 44) GENERIC EXEMPTIONS SPECIFIC EXEMPTIONS GENERIC EXEMPTIONS CONSIDERED OR BEING CONSIDERED - EXPERIENCE REQUIREMENTS OF REPRESENTATIVES.

32. 7. EXEMPTIONS (SECTIONS 12 & 44) (CONTINUED) - REQUIREMENTS FOR THE APPOINTMENT OF AN AUDITOR (SECTION 19) AND FIDELITY INSURANCE (SECTION 13 OF GENERAL CODE OF CONDUCT). -FIT AND PROPER REQUIREMENTS FOR ADMINISTRATIVE AND DISCRETIONARY FSP’S WITH REGARD TO QUALIFICATIONS AND EXPERIENCE.

33. 8. CODES OF CONDUCT (SECTION 15) 1. GENERAL CODE OF CONDUCT (SECTION 15(1); 2. SPECIFIC CODES OF CONDUCT (SECTION 15(2) ADMINISTRATIVE FSP’S; DISCRETIONARY FSP’S;

34. 8. CODES OF CONDUCT (SECTION 15) (CONTINUED) BANK DEPOSITS NOT EXCEEDING A PERIOD OF 12 MONTHS (SECTION 15(2)(B); PERSONS ENGAGED IN FOREIGN CURRENCY TRANSACTIONS;

35. 9. OFFICE OF OMBUD FOR FSP’S (SECTIONS 20 – 31) APPOINTMENT OF OMBUD FOR FSP’S; ESTABLISHMENT OF OFFICE OF OMBUD; RULES OF FAIS OMBUD (SECTION 26); PROMOTION OF AWARENESS (SECTION 32); FULL OPERATION OF OFFICE

36. 10. REGULATIONS (SECTION 35) PROMULGATED (13 JUNE 2003) DEFINITIONS MATTERS REQUIRED OR PERMITTED BY ACT TO BE PRESCRIBED -PERIOD CONTEMPLATED IN SECTION 45(2(B) OF ACT ;

37. 10.REGULATIONS (SECTION 35) (CONTINUED) PROHIBITIONS ON CANVASSING FOR, AND MARKETING OR ADVERTISING OF UNAUTHORISED FINANCIAL SERVICES (SECTION 35(1)(B) OF ACT) COMPLIANCE ARRANGEMENTS -APPLICATION FOR APPROVAL; -ESTABLISHMENT OF COMPLIANCE FUNCTION

38. 10.REGULATIONS (SECTION 35) (CONTINUED) MATTERS RELATING TO ADMINISTRATIVE AND DISCRETIONARY FSP’S (SECTION 35(1)(D) AND (E) OF THE ACT -NOMINEE COMPANIES OF DISCRETIONARY FSP’s; -INDEPENDENT NOMINEES OF ADMINISTRATIVE FSP’S;

39. 10.REGULATIONS (SECTION 35) (CONTINUED) - WRITTEN AGREEMENT WITH INDEPENDENT NOMINEE; -REQUIREMENTS FOR INDEPENDENT NOMINEE; -DUTIES OF INDEPENDENT NOMINEE;; -ENFORCING COURT ORDERS;

40. 10.REGULATIONS (SECTION 35) (CONTINUED) - CONSTRUCTION OF CERTAIN REFERENCES; -PENALTIES; -POWERS OF REGISTRAR TO CALL FOR INFORMATION. PLANNED ADDITIONS TO REGULATIONS -RECOGNITION OF FOREIGN BROKING ENTITIES

41. 11. DETERMINATION OF SECTION 7 DATE SIGNIFICANCE OF SECTION 7 DATE; RECOMMENDATIONS TO MINISTER ON POSSIBLE DATE; CONSIDERATION OF INCENTIVES

42. 12. PUBLICATIONS IN GAZETTE DELEGATION OF POWERS TO RECOGNISED BODIES; FEES; REGULATIONS; CODES OF CONDUCT FOR ADMINISTRATIVE AND DISCRETIONARY FSP’S (8/8/2003)

43. 12. PUBLICATIONS IN GAZETTE (CONTINUED) GENERAL CODE OF CONDUCT FOR AUTHORISED FSP’S AND REPRESENTATIVES (8/8/2003); RULES ON PROCEEDINGS OF THE OFFICE OF THE OMBUD FOR FSP’S (8/8/2003);

44. 12. PUBLICATIONS IN GAZETTE (CONTINUED) DETERMINATION OF REQUIREMENTS FOR REAPPOINTMENT OF DEBARRED REPRESENTATIVES (8/8/2003); QUALIFICATIONS AND EXPERIENCE OF COMPLIANCE OFFICERS IN RESPECT OF FINANCIAL SERVICES BUSINESS (8/8/2003);

45. 12. PUBLICATIONS IN GAZETTE (CONTINUED) DETERMINATION OF CRITERIA AND GUIDELINES FOR THE APPROVAL OF COMPLIANCE OFFICERS (8/8/2003);

46. 13. DOCUMENTS CURRENTLY BEING CONSIDERED FIT AND PROPER REQUIREMENTS (SECTION 8); FSP APPLICATION FORM; SPECIFIC CODE OF CONDUCT FOR AUTHORISED FSP’S AND REPRESENTATIVES CONDUCTING SHORT-TERM DEPOSIT-TAKING BUSINESS

47. 13.DOCUMENTS CURRENTLY BEING CONSIDERED (CONTINUED) CODE OF CONDUCT FOR AUTHORISED FSP’S AND THEIR REPRESENTATIVES, INVOLVED IN FOREIGN EXCHANGE (“FOREX”)

48. QUESTIONS?