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Course Content

Task 1: Demonstrate understanding of the FAIS Act as a regulatory framework

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Task1 QCI – The FAIS Act and subordinate legislation

Task1 QC2 – An overview of the financial services

Task1 QC3 – Different types of Financial Products

Task1 QC4 – The Role and function of a Compliance Officer

Task 1 – Notes

RE5 Exam Practice Test for TASK 1

Task 2: Contribute towards maintaining a FSP Licence

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Task2 QC1 – The requirements a FSP must meet to maintain a FSP licence

Task2 QC2 – Assist in maintaining a FSP licence by executing the required actions as a Representative

Task2 QC3 – The requirements around the display of licences.

Task2 QC4 – Explain the implications for a Representative if an accreditation is suspended or withdrawn or lapsed in terms of the Medical Schemes Act, 1998, or any other enabling legislation.

Task2 QC5 – Undesirable practices

Task2 QC6 – Ensure that the execution of duties and actions as a representative does not constitute undesirable business practices.

Task2 QC7 – The implications for a Representative if the Authority declares a business practice to be undesirable.

Task2 QC8 – The measures available to the Authority if a Representative continues with undesirable business practices.

Task2 QC9 – The offences prescribed by the FAIS Act

Task 3: Define the role of the Key individual in terms of the FAIS Act.

The Financial Advisory and Intermediary Services (FAIS) Act defines a Key Individual (KI) as a person who manages or oversees an authorized financial services provider's (FSP) financial services. KIs are responsible for ensuring that the FSP complies with the FAIS Act and its licensing requirements. Responsibilities • Manage and oversee KIs manage the FSP's activities and supervise the people who work for them • Ensure compliance KIs ensure the FSP adheres to the FAIS Act, its license conditions, and the General Code of Conduct • Ensure fit and proper status KIs ensure that all representatives who report to them maintain their fit and proper status • Submit regulatory reporting KIs ensure that all regulatory reporting is submitted to the FSCA on time and with the correct information • Maintain operational capabilities KIs ensure that the FSP's operational capabilities are in accordance with FSCA licensing requirements • Key Individual considerations KIs must carry out their duties with due care, skill, and diligence. They must also be honest and have integrity. Consequences of non-compliance The FSCA can take action against KIs who fail to perform their duties, including debarment and fines.

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Task3 QC1 – The roles and responsibilities of key individuals as defined in the FAIS Act

Task3 QC2 – The regulated management and oversight responsibilities of a key individual

Task3 QC3 – The implications for a Representative should a key individual no longer meet the honesty, integrity and good standing requirements.

Task 4: Adhere to the specific Codes of Conduct

This task is mainly about the General Code of Conduct (GCOC).

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Task4 QC1 – Describe the general and specific duties of a provider

Task4 QC2 – Conflict of interest

Task4 QC3 – The requirements and impact of the disclosure rules on the FSP

Task4 QC4 – Apply the requirements of the General Code of Conduct for FSPs and Representatives

Task4 QC5 – The disclosures that need to be made by a Representative before rendering a financial service.

Task4 QC6 – Explain disclosures that must be made by a Representative when rendering a financial service.

Task4 QC7 – Describe the required disclosures regarding the provider, product supplier and financial service.

Task4 QC8 – Explain the specific disclosure requirements regarding fees and commission.

Task4 QC9 – Apply disclosure requirements in terms of financial services

Task4 QC10 – Explain the process of advice that should be followed by a Representative

Task4 QC11 – Explain the requirements when a Representative receives custody of financial products and funds

Task4 QC12 – Explain the manner in which complaints are to be handled by a Representative as required by the General Code of Conduct for FSPs and Representatives.

Task4 QC13 – Follow the complaints procedures and processes that are in place for Representatives

Task4 QC14 – Explain the requirements of the General Code of Conduct for FSPs and Representatives relating to the termination of an agreement

Task 5: Comply with regulated record keeping requirements

To comply with regulated record-keeping requirements as a Financial Services Provider (FSP), you must meticulously maintain detailed records of all client interactions, financial advice provided, and related transactions, ensuring they are easily accessible, stored securely, and kept for a minimum of five years after the termination of the financial product or service, allowing for inspection by the relevant regulatory body upon request; this includes both electronic and paper records, with the responsibility to readily convert them into a readable format if needed. Key aspects of FSP record-keeping compliance: Comprehensive documentation: Capture all client communications, including verbal conversations, written correspondence, and any financial needs analysis conducted. Client identification: Maintain proper records of client identification documents used to verify identity. Transaction details: Record all financial transactions executed on behalf of the client, including product details, dates, and amounts. Advice records: Document the rationale behind any financial advice given to clients, including suitability assessments and reasons for product recommendations. Accessibility: Ensure records are easily retrievable and can be presented to the regulator within a specified timeframe if required. Storage and security: Implement robust systems to protect records from loss, damage, or unauthorized access. Important points to remember: Legal obligation: Failure to comply with record-keeping regulations can lead to penalties and regulatory action. Third-party storage: If using a third-party to store records, ensure a written agreement is in place clearly outlining responsibilities. Regular review: Regularly review and update record-keeping procedures to maintain compliance with evolving regulations.

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Task5 QC1 – Explain the record keeping obligations by a Representative as prescribed by the FAIS and FIC Acts

Task5 QC2 – Carry out the record keeping and retrieval of records functionality correctly

Task 6: Comply with the requirements of the FIC Act and Money Laundering and Terrorist Financing control regulations, as it applies to the FSP.

FICA

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Task6 QC1 – Explain the requirements specific to a FSP prescribed by the FIC Act

Task6 QC2 – Describe how the FIC Act impacts a Representatives’ interaction with a client.

Task 7: Dealing with complaints that have been submitted to the Ombud for FSPs.

Complaints - procedures and processes

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Task7 QC1 – Explain the role and authority of the Ombud for FSPs

Task 8: Operate as a Representative in terms of the FAIS Act.

"Operating as a representative" in terms of the FAIS Act means acting as an individual who provides financial services to clients on behalf of a licensed "Financial Services Provider" (FSP), essentially meaning you are employed or mandated by the FSP to deliver financial advice or products to clients, while adhering to all the regulatory requirements set out in the FAIS Act regarding qualifications, conduct, and client protection. Key points about being a representative under FAIS: Acting on behalf of an FSP: You cannot directly provide financial services in your own name, but must do so under the license of the FSP you are representing. Required qualifications: To operate as a representative, you must hold the necessary qualifications and pass relevant regulatory exams to demonstrate your competence in the financial services field. Compliance with codes of conduct: You are bound by the FSP's compliance framework and the FAIS codes of conduct, which dictate ethical standards and client-centric practices. Supervision and oversight: The FSP is responsible for supervising your activities as a representative, ensuring proper client interaction and adherence to regulations. Example scenarios of a representative under FAIS: A financial advisor employed by an insurance company who sells insurance products to clients. A stockbroker working for a brokerage firm who provides investment advice to clients. A mortgage loan officer at a bank who assists clients in applying for home loans.

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Task8 QC1 – The roles and responsibilities of Representatives as defined in the FAIS Act

Task8 QC2 – Apply knowledge of the role of the Representative in terms of the FAIS Act

Task8 QC3 – The fit and proper requirements that apply to a Representative

Task8 QC4 – Distinguish between advice and intermediary services in terms of the FAIS Act

Task8 QC5 – Describe the purpose and requirements of the register of Representatives

Task8 QC6 – Explain when a Representative should be under supervision

Task8 QC7 – Explain the disclosure requirements for a Representative under supervision

Task8 QC8 – Describe the implications if a Representative no longer meets the Fit and Proper requirements.

Task8 QC9 – Define the purpose of debarment

Task8 QC10 – Describe when debarment should be considered.

Task8 QC11 – Explain the debarment process that should be followed in the event of a possible contravention of the FAIS Act

Task8 QC12 – Explain what Recourse a debarred Representative may have.

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About Lesson

Legislative Reference:

FAIS Act – Sec 1 Definition of Key Individual FAIS Act – Sec 7(3)
FAIS Act – Sec 18
BN 194 of 2017 – Sec 8
BN 194 of 2017 – Sec 12
BN 194 of 2017 – Sec 32
FSCA FAIS Notice 86 of 2018 – Condition 4(1)(f)

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