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

TABLE 2

No.

Task

Knowledge Criteria

Skill Criteria

1

Apply the Category II and/or IIA FSP business model

Describe the characteristics of a Category II and/or IIA FSP and how that differentiates it from other financial services providers in Cat I and/or III.

Take the difference between Category II and/or IIA FSPS and other financial services providers into account when making business related decisions

Discuss the separation of client assets from category II and/or IIA FSP's assets.

Perform the fiduciary duty of the CAT II and/or IIA FSP.

Identify which assets belong to the client and which belong to the category II and/or IIA FSP.

Interpret basic financial systems.

Implement systems and processes to separate client and CAT II and/or IIA FSP assets.

Explain the role and responsibilities of the different parties involved, including but not limited to:

Describe the need for relevant contractual agreements to be in place with the relevant other party.

Verify that the relevant contractual agreements are in place with the relevant other party.

Business is conducted in accordance with the contractual agreements.

2

Manage the role of the independent nominee

Describe the duties the nominee company is responsible for.

Verify that there are processes in place to check that the nominee company executes its’ responsibilities towards the Category II and/or IIA FSP.

Explain the purpose of the nominee company.

Confirm the nominee company complies with its duties.

3

Manage and oversee client mandates

Explain why the category II and/or IIA FSP must use mandates that have been approved by the FSB.

Manage client mandates in accordance to mandatory requirements.

Explain why a mandate cannot be used if it is not approved by the FSB.

Explain why a mandate cannot be used if it is not signed by the client or his duly authorised representative.

Explain why such a mandate must adhere to the requirements in the Discretionary Code of Conduct.

Explain what the requirements are for mandates.

4

Manage and oversee typical daily transactions

Explain how different products have different turnaround times and should be adhered to.

Check that the systems and processes enable the implementation and execution of different turnaround times for different products.

Describe how there should be adequate controls in place to manage risks.

Check that the systems and processes have embedded controls to manage and contain risk.

5

Manage and oversee disclosures

Explain how to ensure transparency and manage conflict of interests.

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

6

Understand the legal environment of the CAT II and/or IIA FSP

Explain the liquidity requirement.

Apply the liquidity requirements to own business.

Explain the implications of the liquidity requirements,

Describe the fidelity cover requirements.

Apply the fidelity requirements to own business.

Explain the implications of the fidelity cover requirements.

Describe the applicable capital requirement.

Apply the applicable capital requirements to own business.

Explain the implications of the capital requirements.

Explain why the Category II and/or IIA FSP is not allowed to engage in the netting of transactions.

Verify that there are systems in place to check that netting of transactions will not take place.

Explain why a Category II and/or IIA FSP must ensure that it only conducts business with another FSP that has the appropriate categories/subcategories on its license, and that business must also be conducted within the parameters of the client mandate.

Verify that it only conducts business with another FSP that has the appropriate categories/ subcategories on its license, and that business must also be conducted within the parameters of the client mandate, to ensure that all business is legitimate.

Describe what the continual compliance with the license requirements and conditions are.

Check that there are systems in place to check that new products or proposed business ventures will meet the limitations of the license requirements and conditions are.

7

Apply the record keeping requirements

Explain the period for which records must be kept.

Incorporate the record keeping requirements when planning system updates and strategic initiatives.

Describe the requirements specifically applicable to telephone and/or electronic requirements.

Verify that systems are in place to manage the record keeping risks of electronic and telephonic transactions.

8

Comply with requirements when reporting to clients

Explain why clients must receive written reports at quarterly intervals, that provide them with investment and related information.

Verify that there are systems and processes that enable the preparation and delivery of accurate quarterly reports.

9

Institute a personal account Trading policy

Describe why a Discretionary FSP should have a personal account policy and why this is important.

Check that there is a personal account trading policy and that there are controls to check that this is adhered to.

10

Apply prohibitions in terms of the Discretionary Code of Conduct

Explain the prohibitions in terms of the Discretionary Code of Conduct.

Check that there are processes and controls in place to ensure that the FSP adheres to the prohibitions in terms of the Discretionary Code of Conduct.

11

Deal with Nominee Regulations

Describe the requirements of the Nominee Regulations, and what the FSP and the nominees must adhere to.

Check that there are processes and controls in place to ensure that the FSP adheres to the requirements in terms of the Nominee Regulations.