Act No. and year
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Short Title
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Extent of repeal or amendment
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Act No. 37 of 2002
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Financial Advisory and Intermediary Services Act, 2002
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| 1. | The amendment of section 1— |
| (a) | by the insertion in subsection (1) after the definition of "advice" of the following definition: |
" 'alternative investment fund' means a collective investment undertaking, including investment compartments of a collective investment undertaking, constituted in any legal form, including in terms of a contract, by means of a trust, or in terms of statute, which—
| (a) | raises capital from one or more investors to facilitate the participation or interest in, subscription, contribution or commitment to, a fund or portfolio, with a view to investing it in accordance with a defined investment policy for the benefit of the investors; and |
| (b) | does not require approval as a collective investment scheme in terms of the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002);"; |
| (b) | by the insertion in subsection (1) after the definition of "authorised financial services provider" of the following definition: |
" 'Authority' means the Financial Sector Conduct Authority established in terms of section 56 of the Financial Sector Regulation Act;";
| (c) | by the deletion in subsection (1) of the definitions of "Board" and "board of appeal"; |
| (d) | by the insertion before the definition of "client" of the following definition: |
" 'conduct standard' has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act, 2017;";
| (e) | by the insertion after the definition of "financial product" of the following definition: |
" 'Financial Sector Regulation Act' means the Financial Sector Regulation Act, 2017;";
| (f) | by the deletion in subsection (1) of the definition of "Financial Services Board Act"; |
| (g) | by the insertion in subsection (1) in the definition of "financial product" after paragraph (g) of the following paragraph; |
| "(gA) | an investment, subscription, contribution, or commitment in an alternative investment fund;"; |
| (h) | by the substitution in subsection (1) in the definition of "financial product" for paragraph (j) of the following paragraph: |
| "(j) | any financial product issued by any foreign product supplier [and marketed in the Republic] and which in nature and character is essentially similar or corresponding to a financial product referred to in paragraph (a) to (i), inclusive;"; |
| (i) | by the substitution in subsection (1) for the definition of "fit and proper requirements" of the following definition: |
" 'fit and proper requirements' means the requirements [published under] referred to in section 6A;";
| (j) | by the substitution in subsection (1) for the definition of "intermediary service" of the following definition: |
" 'intermediary service' means, subject to subsection (3)(b), any act other than the furnishing of advice, performed by a person [for or on behalf of a client or product supplier]—
| (a) | the result of which is that a client may enter into, offers to enter into or enters into any transaction in respect of a financial product [with a product supplier]; or |
| (i) | buying, selling or otherwise dealing in (whether on a discretionary or non-discretionary basis), managing, administering, keeping in safe custody, maintaining or servicing a financial product [purchased by a client from a product supplier or in which the client has invested]; |
| (ii) | collecting or accounting for premiums or other moneys payable by the client [to a product supplier] in respect of a financial product; or |
| (iii) | receiving, submitting [or], processing or settling the claims of a client [against a product supplier] in respect of a financial product;"; |
| (k) | by the insertion in subsection (1) after the definition of "intermediary service" of the following definition: |
" 'joint standard' has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;";
| (l) | by the deletion in subsection (1) of the definition of "official web site"; |
| (m) | by the insertion in subsection (1) after the definition of "Ombud" of the following definition: |
" 'Ombud Council' means the council established in terms of section 175 of the Financial Sector Regulation Act;";
| (n) | by the insertion after the definition of "product supplier" of the following definition: |
" 'prudential standard' has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;";
| (o) | by the insertion in subsection (1) after the definition of "publish" of the following definition: |
" 'Register' means the Financial Sector Information Register referred to in section 256 of the Financial Sector Regulation Act;";
| (p) | by the deletion in subsection (1) of the definition of "registrar"; |
| (q) | by the insertion in subsection (1) after definition of "this Act" of the following definition: |
" 'Tribunal' means the Financial Services Tribunal established in terms of section 219 of the Financial Sector Regulation Act;";
| (r) | by the deletion of subsection (3)(b)(ii); and |
| (s) | by the addition of the following subsection: |
| "(7) | Unless the context otherwise indicates, words and expressions not defined in subsection (1) have the same meaning ascribed to them in terms of the Financial Sector Regulation Act.". |
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| 2. | The insertion after section 1 before Chapter 1 of the following sections: |
"Relationship between Act and Financial Sector Regulation Act
1A.
| (1) | A reference in this Act to the Board or the registrar must be read as a reference to the Authority. |
| (2) | Except as otherwise provided by this Act or the Financial Sector Regulation Act, the powers and duties of the Authority in terms of this Act are in addition to the powers and duties that it has in terms of the Financial Sector Regulation Act. |
| (3) | A reference in this Act to the Authority determining or publishing a matter by notice in the Gazette must be read as including a reference to the Authority determining or publishing the matter by notice published in the Register. |
| (4) | Unless expressly provided otherwise in this Act, or this Act requires a matter to be prescribed, a reference in this Act to a matter being— |
| (a) | prescribed must be read as a reference to the matter being prescribed in a prudential standard, a conduct standard or a joint standard; or |
| (b) | determined must be read as a reference to the Authority determining the matter in writing and registering the determination in the Register. |
| (5) | A reference in this Act to an on-site visit in terms of a provision of this Act must be read as a reference to a supervisory on-site inspection in terms of the Financial Sector Regulation Act. |
| (6) | A reference in this Act to an inspection in terms of a provision of this Act must be read as a reference to an investigation in terms of the Financial Sector Regulation Act. |
(7)
| (a) | A reference in this Act to the Authority announcing or publishing information or a document on a web site must be read as a reference to the Authority publishing the information or document in the Register. |
| (b) | The Authority may also publish the information or document on its web site. |
| (8) | A reference in this Act to a determined or prescribed fee must be read as a reference to the relevant fee determined in terms of section 237 and Chapter 16 of the Financial Sector Regulation Act. |
| (9) | A reference in this Act to an appeal of a decision of the Authority must be read as a reference to a reconsideration of the decision by the Tribunal in terms of the Financial Sector Regulation Act. |
Regulatory instruments
| 1B. | For the purposes of the definition of "regulatory instrument" in section 1 of the Financial Sector Regulation Act, fit and proper requirements determined in terms of section 6A, codes of conduct drafted under section 15 and criteria and guidelines for the approval of compliance officers determined under section 17(2) are regulatory instruments.". |
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| 3. | The repeal of section 2. |
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| 4. | The substitution in section 3(2)(b) for subparagraph (i) of the following subparagraph: |
| "(i) | the fee payable [in terms of this Act]; and". |
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| 5. | The deletion in section 4 of subsections (1), (5) and (6). |
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| 6. | The substitution for section 6 of the following section: |
"Delegations
6.
| (1) | The Authority may, in writing, delegate to any person a power or duty conferred upon the Authority under this Act in respect of any matter relating to a conduct standard referred to in section 6A(2)(a), (b) and (e). |
| (2) | The Authority must, where the delegation is to a person other than a staff member of the Authority, be satisfied that the person has sufficient financial, management, human resources and experience necessary for performing the delegated power or duty. |
| (3) | A delegation is subject to the limitations and conditions specified in the delegation. |
| (4) | A delegation does not divest the Authority of responsibility in respect of the delegated power or duty and anything done by a delegate in accordance with a delegation is deemed to be done by the Authority. |
| (5) | A delegation made under this section may be amended or revoked in writing at any time, but an amendment or revocation does not affect any rights or liabilities accrued because of the acts of the delegate." |
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| 7. | The amendment of section 6A— |
| (a) | by the substitution in subsection (1) for the words preceding paragraph (a) of the following words: |
"[The registrar, for purposes of this Act, by notice in the Gazette—]
A conduct standard may be made on any of the following matters:"; and
| (b) | by the insertion after paragraph (a) of the following paragraph: |
| "(aA) | may classify representatives into different categories; and". |
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| 8. | The amendment of section 8 by the substitution for subsections (1) and (1A) of the following subsections: |
| "(1) | An application for an authorisation referred to in section 7(1), including an application by an applicant not domiciled in the Republic, must be submitted to the [registrar] Authority in the form and manner determined by the [registrar] Authority by notice on the [official] Authority’s web site, and be accompanied by information to satisfy the [registrar] Authority that the applicant complies with the fit and proper requirements [determined for financial services providers or categories of providers, determined by the registrar by notice in the Gazette, in respect of— |
| (a) | personal character qualities of honesty and integrity; |
| (bA) | operational ability; and |
| (1A) | If the applicant is a partnership, trust or corporate or unincorporated body, [the requirements in paragraphs (a) and (b) of subsection (1) do not apply to the applicant, but in such a case] the application must be accompanied by additional information to satisfy the [registrar] Authority that every person who acts as a key individual of the applicant complies with the fit and proper requirements for key individuals in the category of financial services providers applied for[, in respect of— |
| (a) | personal character qualities of honesty and integrity; |
to the extent required in order for such key individual to fulfill the responsibilities imposed by this Act.".
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| 9. | The amendment of section 9(1)— |
| (a) | by the substitution for paragraphs (c) and (d) of the following paragraphs: |
| "(c) | has failed to comply with any other provision of this Act or any requirement under the Financial Sector Regulation Act, including a conduct standard, a prudential standard or a joint standard; |
| (d) | [is liable for payment of] has failed to pay a levy [under section 15A of the Financial Services Board Act, 1990 (Act No. 91 of 1990), a penalty under section 41(2) and (3) or an administrative sanction under section 6D(2) of the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001), and has failed to pay the said levy, penalty or administrative sanction], an administrative penalty, or [and] any interest in respect thereof;"; and |
| (b) | by the substitution for paragraph (f) of the following paragraph: |
| "(f) | has failed to comply with a regulator’s [any] directive [issued under this Act]; or". |
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| 10. | The substitution in section 13 for subsection (3) of the following subsection: |
| "(3) | [The] An authorised financial services provider must— |
| (a) | maintain a register of representatives, and key individuals of [such] those representatives, which must be regularly updated and be available to the [registrar] Authority for reference or inspection purposes[.]; and |
| (b) | within five days after being informed by the Authority of the debarment of a representative or key individual by the Authority, remove the name of that representative or key individual from the register referred to in paragraph (a).". |
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| 11. | The substitution for section 14 of the following section: |
"Debarment of representatives
14.
(1)
| (a) | An authorised financial services provider must debar a person from rendering financial services who is or was, as the case may be— |
| (i) | a representative of the financial services provider; or |
| (ii) | a key individual of such representative, |
if the financial services provider is satisfied on the basis of available facts and information that the person—
| (iii) | does not meet, or no longer complies with, the requirements referred to in section 13(2)(a); or |
| (iv) | has contravened or failed to comply with any provision of this Act in a material manner; |
| (b) | The reasons for a debarment in terms of paragraph (a) must have occurred and become known to the financial services provider while the person was a representative of the provider. |
(2)
| (a) | Before effecting a debarment in terms of subsection (1), the provider must ensure that the debarment process is lawful, reasonable and procedurally fair. |
| (b) | If a provider is unable to locate a person in order to deliver a document or information under subsection (3), after taking all reasonable steps to do so, including dissemination through electronic means where possible, delivering the document or information to the person’s last known e-mail or physical business or residential address will be sufficient. |
| (3) | A financial services provider must— |
| (a) | before debarring a person— |
| (i) | give adequate notice in writing to the person stating its intention to debar the person, the grounds and reasons for the debarment, and any terms attached to the debarment, including, in relation to unconcluded business, any measures stipulated for the protection of the interests of clients; |
| (ii) | provide the person with a copy of the financial services provider’s written policy and procedure governing the debarment process; and |
| (iii) | give the person a reasonable opportunity to make a submission in response; |
| (b) | consider any response provided in terms of paragraph (a)(iii), and then take a decision in terms of subsection (1); and |
| (c) | immediately notify the person in writing of— |
| (i) | the financial services provider’s decision; |
| (ii) | the persons’ rights in terms of Chapter 15 of the Financial Sector Regulation Act; and |
| (iii) | any formal requirements in respect of proceedings for the reconsideration of the decision by the Tribunal. |
| (4) | Where the debarment has been effected as contemplated in subsection (1), the financial services provider must— |
| (a) | immediately withdraw any authority which may still exist for the person to act on behalf of the financial services provider; |
| (b) | where applicable, remove the name of the debarred person from the register referred to in section 13(3); |
| (c) | immediately take steps to ensure that the debarment does not prejudice the interest of clients of the debarred person, and that any unconcluded business of the debarred person is properly attended to; |
| (d) | in the form and manner determined by the Authority, notify the Authority within five days of the debarment; and |
| (e) | provide the Authority with the grounds and reasons for the debarment in the format that the Authority may require within 15 days of the debarment. |
| (5) | A debarment in terms of subsection (1) that is undertaken in respect of a person who no longer is a representative of the financial services provider must be commenced not longer than six months from the date that the person ceased to be a representative of the financial services provider. |
| (6) | For the purposes of debarring a person as contemplated in subsection (1), the financial services provider must have regard to information regarding the conduct of the person that is furnished by the Authority, the Ombud or any other interested person. |
| (7) | The Authority may, for the purposes of record keeping, require any information, including the information referred to in subsection (4)(d) and (e), to enable the Authority to maintain and continuously update a central register of all persons debarred in terms of subsection (1), and that register must be published on the web site of the Authority, or by means of any other appropriate public media. |
| (8) | A debarment effected in terms of this section must be dealt with by the Authority as contemplated by this section. |
| (9) | A person debarred in terms of subsection (1) may not render financial services or act as a representative or key individual of a representative of any financial services provider, unless the person has complied with the requirements referred to in section 13(1)(b)(ii) for the reappointment of a debarred person as a representative or key individual of a representative.". |
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| 12. | The repeal of section 14A. |
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| 13. | The amendment of section 20 by the substitution for subsection (3) of the following subsection: |
| "(3) | The objective of the Ombud is to consider and dispose of complaints under this Act, and complaints for which the Adjudicator is designated in terms of section 211 of the Financial Sector Regulation Act, in a procedurally fair, informal, economical and expeditious manner and by reference to what is equitable in all the circumstances, with due regard to— |
| (a) | the contractual arrangement or other legal relationship between the complainant and any other party to the complaint; and |
| (b) | the provisions of this Act and the Financial Sector Regulation Act.". |
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| 14. | The insertion after section 20 of the following section: |
"Ombud scheme
| 20A. | The scheme in relation to complaints implemented by this Part is declared to be a statutory ombud scheme for the purposes of the Financial Sector Regulation Act.". |
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| 15. | The substitution in section 21 for the expression "Board", wherever it occurs in the section, of the expression "Minister". |
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| 16. | The amendment of section 22(1) by the substitution for paragraph (a) of the following paragraph: |
| "(a) | funds [provided by the Board] accruing to the Ombud in terms of legislation on the basis of a budget submitted by the Ombud to the [Board] Minister and approved by the latter; and". |
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| 17. | The amendment of section 23 by the substitution for subsection (1) of the following subsection: |
| "(1) | [Despite the provisions of the Public Finance Management Act, 1999 (Act No. 1 of 1999), the board of the Financial Services Board as defined in section 1 of the Financial Services Board Act, 1990 (Act No. 97 of 1990),] The Ombud is the accounting authority of the Office.". |
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| 18. | The repeal of section 26. |
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| 19. | The repeal of section 32. |
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| 20. | The deletion in section 35(1) of paragraphs (b), (c) and (d). |
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| 21. | The substitution for section 39 of the following section: |
"Right to reconsideration of decision
| 39. | Any person aggrieved by a decision of a financial services provider to debar that person in terms of section 14 may apply for the reconsideration of the decision to the Tribunal.". |
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| 22. | The repeal of sections 41 and 44. |
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| 23. | The amendment of section 45— |
| (a) | by the deletion in subsection (1) of paragraph (a)(ii); and |
| (b) | by the insertion after subsection (1) of the following subsections: |
| "(1A) | The provisions of this Act do not apply to the— |
| (a) | performing of the activities referred to in paragraph (b)(ii) and (iii) of the definition of "intermediary service" by a product supplier— |
| (i) | who is authorised under a particular law to conduct business as a financial institution; and |
| (ii) | where the rendering of such service is regulated under such law; and |
| (b) | rendering of financial services by a manager as defined in section 1 of the Collective Investment Schemes Control Act, 2002, to the extent that the rendering of financial services is regulated under that Act. |
| (1B) | The exemption referred to in— |
| (a) | subsection (1A)(a) does not apply to a person to whom the product supplier has delegated or outsourced the activity, or any part of the activity, contemplated in paragraph (a), and where the person is not an employee of the product supplier; and |
| (b) | subsection (1A)(b) does not apply to an authorised agent as defined in section 1 of the Collective Investment Schemes Control Act, 2002.". |
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| 24. | The amendment of the arrangement of sections— |
| (a) | by the insertion after item 1 of the following items: |
"1A. Relationship between Act and Financial Sector Regulation Act
1B. Regulatory instruments"; and
| (b) | by the substitution for item 6 of the following item: |
"6. Delegations";
| (c) | by the insertion after item 20 of the following item: |
"20A. Ombud scheme"; and
| (d) | by the substitution for item 39 of the following item: |
"39. Right to reconsideration of decision".
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