Financial Advisory and Intermediary Services Act 2002 (Act No. 37 of 2002)

TABLE 1

Task No.

Task

QC

Qualifying Criteria

Knowledge (K)

or Skill (S)

1

Demonstrate understanding of the FAIS Act as a regulatory framework

1

Describe the FAIS Act and subordinate legislation

K

2

Explain how the FAIS Act is integrated with other Financial Services Board legislation

K

3

Describe the requirements when interaction between FSPs takes place

K

4

Explain in general which departments of the Registrar's office deal with which FSP matters

K

5

Interact with the Registrar when and where required

S

6

Explain what is the correct format of communication with the Registrar

K

7

Explain what processes are required to remain updated with regards to published changes to legislation that will affect the FSP.

K

2

Define financial products and financial services.

1

Provide an overview of the financial services and different types of financial products an FSP can deal with

K

2

Apply knowledge of the financial products within the financial services environment

S

3

Explain the different financial products with examples of products in each category

K

3

Maintain the licence of the FSP

1

Describe the requirement for licensing of an FSP

K

2

Apply for an FSP licence

S

3

Describe the requirements for changing any aspect of an FSP licence

K

4

Explain the impact of licensing conditions on an FSP.

K

5

Manage the licensing conditions.

S

6

Describe what changes to the FSP licensing details must be communicated to the Registrar

K

7

Confirm that the Registrar is informed within the prescribed timeframes of any changes to the FSP licensing details.

S

8

Describe the implications for the FSP if any of the licensing conditions are not met

K

9

Discuss the requirements around the display of licences.

K

10

Verify that the FSP has internal controls and procedures in place to ensure that financial services are rendered within the limitations on categories and subcategories for which the licence is issued.

S

11

Explain the implications when a Key Individual leaves the employ of the FSP

K

12

Explain the implications for a Key Individual and/or FSP if an accreditation is suspended or withdrawn or lapsed in terms of the Medical Schemes Act, 1998, or any other enabling legislation

K

13

Explain what levies are payable to the Registrar and when they should be paid.

K

14

Verify that there are processes in place to pay the levies within the prescribed timeframes

S

15

Explain the reasons why a licence can be suspended or withdrawn.

K

16

Describe the conditions under which suspensions, withdrawals and reinstatements of authorisation may be imposed.

K

17

Explain what recourse an FSP has where its licence has been suspended or withdrawn.

K

18

Discuss why a licence would be lapsed

K

19

Describe how lapsing a licence differs from suspension or withdrawal of a licence

K

20

Discuss the effect of voluntary sequestration, winding-up or closure of a business on its licensing status

K

21

Describe the requirements where business rescue or application by Registrar for sequestration or liquidation takes place

K

22

Explain what is meant by "undesirable practices."

K

23

Check that there are processes in place to check whether the Registrar has published notices regarding undesirable practices

S

24

Verify that there are processes in place to ensure that the business is aware of declared undesirable practices and that they cease any such practices

S

25

Describe the implications for an FSP if the Registrar declares a business practice to be undesirable

K

26

Explain the reparation measures available to the Registrar if an FSP continues with undesirable business practices.

K

27

Explain the implications where the Registrar issues a directive

K

28

Describe the process of On-site inspections by the Registrar

K

29

Describe the FAIS Act offences

K

30

Ensure that there are processes in place to avoid actions that can be regarded as offences under the FAIS Act.

S

31

Define the recourse that an FSP has in the event of a decision made by the Registrar

K

32

Explain the process of enforcement as provided for in legislation

K

4

Operate as a key individual in terms of the FAIS Act

1

Describe the roles and responsibilities of key individuals as defined in the FAIS Act.

K

2

Explain the requirements for approval of a key individual by the Registrar

K

3

Describe the regulated management and oversight responsibilities of a key individual

K

4

Perform the regulated management and oversight responsibilities of a key individual

S

5

Explain the controls required to ensure sufficient management and oversight of the financial services that are rendered

K

6

Explain when an individual can commence acting as a key individual.

K

7

Describe the good standing, honesty and integrity requirements for a key individual.

K

8

Check whether a current/potential key individual meets the good standing, honesty and integrity requirements.

S

9

Explain the implications for a key individual should the key individual no longer meet the good standing, honesty and integrity requirements

K

10

Take appropriate action where a current key individual no longer meets the good standing, honesty and integrity requirements.

S

11

Explain the implications for an FSP should a key individual no longer meet the good standing, honesty and integrity requirements

K

12

Describe the competence requirements for a key individual

K

13

Check whether a current/potential key individual meets the competence requirements.

S

14

Describe the on-going training and development requirements for key individuals.

K

15

Verify that the record keeping required for the on-going meeting of

S

5

Manage and oversee the operational ability of the FSP.

1

Describe the operational ability requirements prescribed in the FAIS Act.

K

2

Confirm that there is adequate storage and filing systems for the safe keeping of records, business communications and correspondence.

S

3

Verify that the FSP has the required bank accounts

S

4

Implement and maintain the prescribed professional indemnity or fidelity insurance cover

S

5

Ensure that disaster recovery and business continuity plans are in place

S

6

Describe the financial soundness requirements for an FSP

K

7

Confirm that the financial soundness requirements are met

S

8

Describe the requirements when outsourcing an administration or system function relating to financial services

K

9

Ensure, where activities are outsourced, that written service level agreements are in place

S

10

Check that there are processes in place to ensure that suitable providers are selected for any outsourced functions

S

11

Confirm that where outsourced entities provide financial services, that they are authorised FSP's

S

6

Adhere to the General Code of Conduct

1

Describe the general and specific duties of a provider

K

2

Describe the processes that need to be in place to manage conflict of interest

K

3

Describe what could possibly be a conflict of interest

K

4

Define what needs to be in a conflict of interest policy

K

5

Ensure that the FSP is managing potential conflicts of interest.

S

6

Apply the requirements of the General Code of Conduct for FSPs and Representatives.

S

7

Explain the disclosures that need to be made before rendering a financial service

K

8

Explain disclosures that must be made when rendering a financial service

K

9

Check that disclosures are adequate to enable client's to make an informed decision.

S

10

Explain the requirements for an FSP when custody of financial products and funds occurs.

K

11

Confirm that there is a separate bank account with a registered bank into which client monies are deposited.

S

12

Explain the requirements of the General Code of Conduct for FSPs and Representatives relating to risk management and insurance

K

13

Explain the requirements of the General Code of Conduct for FSPs and Representatives relating to marketing and advertising

K

14

Explain the manner in which complaints are to be handled by the FSP as required by General Code of Conduct for FSPs and Representatives.

K

15

Verify that complaints procedures and processes are in place.

S

16

Follow the complaints procedures and processes that are in place for the FSP.

S

17

Explain the requirements of the General Code of Conduct for FSPs and Representatives relating to the termination of agreement or business

K

7

Manage and oversee the compliance functions as required by the FAIS Act

1

Describe the compliance arrangements required by the FSP

K

2

Explain the requirements of the compliance function within the FSP.

K

3

Establish the compliance function within the FSP

S

4

Establish and maintain compliance and reporting arrangements for the FSP

S

5

Check that the compliance arrangements specify frequency of monitoring and reporting

S

6

Implement and maintain a documented process to ensure the adequacy of the FSP's compliance and monitoring arrangements.

S

7

Describe when a Compliance Officer should be appointed

K

8

Explain the criteria for approval of a Compliance Officer by the Registrar.

K

9

Ensure that the Compliance Officer is approved by the Registrar

S

10

Describe the role and function of a Compliance Officer.

K

11

Confirm that the compliance function / compliance practice has sufficient resources to provide an efficient compliance service

S

12

Explain why it is important for the Compliance Officer to act independently from the management of the FSP

K

13

Confirm that the Compliance Officer / compliance practice can function objectively and sufficiently independently of the FSP and avoids conflicts of interest

S

14

Explain why it is important for the Compliance Officer to be able to avoid conflicts of interest during the execution of their duties

K

15

Manage potential conflict of interest where there is not a specifically appointed Compliance Officer / compliance practice

S

16

Understand the content of the compliance report(s) in order to be able to sign it off

K

17

Confirm that where the Compliance Officer found any instances of non-compliance that this is addressed and rectified.

S

18

Replace the Compliance Officer if he/she does not have the required approval of the Registrar

S

8

Comply with regulated record keeping requirements

1

Explain the record keeping obligations as prescribed by the FAIS and FIC Acts

K

2

Verify that record keeping and retrieval of records is carried out in terms of the obligations prescribed by the FAIS and FIC Acts

S

3

Describe the requirements imposed when record keeping is outsourced to a third party

K

4

Confirm that third party outsourcing agreements are executed correctly.

S

5

Explain the security requirements for record keeping in terms of confidentiality and access to records.

K

9

Manage and oversee the accounting and auditing requirements

1

Describe the accounting and auditing requirements prescribed by the FAIS Act

K

2

Check that the required accounting and auditing requirements are in place and carried out accurately and timeously.

S

3

Describe the requirements for appointing an auditor or accounting officer

K

4

Ensure that the audit report submitted to the Registrar where funds are received meets the regulatory requirements

S

10

Manage and oversee the requirements of the FIC Act and Money Laundering and Terrorist Financing control regulations, as it applies to the FSP.

1

Explain the requirements specific to an FSP prescribed by the FIC Act

K

2

Verify that all requirements for internal rules as required by the FIC Act are in place

S

3

Verify that the FSP has processes in place to ensure compliance with the identification, verification, record-keeping and reporting obligations under the FIC Act.

S

4

Check that there are processes in place to ensure that employees receive training in respect of, and are aware of, their obligation to report suspicious transactions.

S

11

Deal with complaints that have been submitted to the Ombud for FSPs

1

Explain the role and authority of the Ombud for FSPs

K

2

Discuss the obligations of the FSP in respect of an investigation conducted by the Ombud for FSPs

K

3

Check that there are processes in place to ensure that the FSP cooperates in the case of an investigation by the Ombud.

S

12

Define the role of the representative in terms of the FAIS Act.

1

Describe the roles and responsibilities of representatives as defined in the FAIS Act.

K

2

Explain when an individual must be appointed as a representative in terms of the FAIS Act

K

3

Describe the purpose and requirements of the register of representatives

K

4

Verify that the FSP maintains a register of representatives that meets the requirements of the FAIS Act

S

13

Manage and oversee the appointment of representatives

1

Explain what needs to be in place when appointing a representative

K

2

Verify that there are processes that enable the FSP to check that a representative meets the fit and proper requirements and can be appointed

S

14

Manage the rendering of services under supervision

1

Explain when representatives can act under supervision.

K

2

Confirm that there are sufficient qualified individuals to act in the role of supervisor

S

3

Describe the requirements that must be in place when representatives act under supervision.

K

4

Ensure that the supervisors understand their role and have the capacity for the number of supervisees

S

5

Verify that there is supervision in place to oversee representatives

S

6

Perform the necessary supervision functions on representatives

S

7

Explain the disclosure requirements for a representative under supervision

K

15

Manage and oversee the representatives appointed by an FSP

1

Describe the on-going Fit and Proper requirements for representatives.

K

2

Verify that the record keeping required for the on-going meeting of Fit and Proper requirements for representatives is in place

S

3

Implement and maintain a documented process to ensure that all representatives are competent and will provide financial services on behalf of the FSP in accordance with the FAIS Act

S

4

Check that there are processes to ensure that representatives are making progress towards the Fit and Proper requirements.

S

5

Describe the implications if a representative no longer meets the Fit and Proper requirements

K

16

Debar representatives that have failed to comply with any provision of the FAIS Act in a material manner

1

Define the purpose of debarment

K

2

Describe when debarment should be considered

K

3

Check that the employment/mandatory agreement with representatives include scope of activities as a representative and reasons for possible debarment

S

4

Explain the debarment process that should be followed in the event of a possible contravention of the FAIS Act

K

5

Confirm that all role players in the FSP are informed about the reasons why debarment would be considered, the process that would be followed and any recourse that a representative may have

S

6

Verify that there are internal processes and procedures in place for the debarment of representatives

S

7

Explain the timeframe and process to notify the Registrar of a debarment

K