Key Individual Chapter 1

Anti-money laundering compliance FICA internal rulesMonitoring and identification Auditing and Accounting process Codes of conductSubordinate legislation Manage and oversee FAIS record keepingFSP infrastructure

Operational ability of FSP in regulatory environment Compliance functionAll licensing requirements Services under supervision Training and developmentDebarment Manage and oversee Appointment of RepsActivities of Reps Source: Section 8,13 and 14 of FAIS Act and BN 106

Criminal or civil proceedings Statutory or voluntary professional Body Denied membership of any Body Found guilty by regulatory or supervisory Body License suspended or withdra wn Source: section 2 of BN 106 as amended 5 years Prima facie evidence Disqualified from management of company

Change in personal circumstances of KI may affect fit and proper status Renders person not to be fit and proper and cannot take part in conduct or management or oversight of FSP Source: Louis Wessels Legal Adviser FSB and Section 8 (4) (b) (iii)

Experience Qualifications Regulatory Exams 1 and 2 CPD Competence Source: Section 8 (1) (i) (ii) of FAIS Act and BN 106

Source: BN 106 and substituted by BN 60 of 2010 One subcategoryAdvice minimum ExperienceServices Minimum Experiences Long term Insurance sub cat A 6 months2 months Short term Insurance Personal Lines 1 year6 months Long term Insurance sub cat B1 and B2 1 year6 months Long term Insurance sub cat C 1 year6 months Retail Pension benefits 1 year6 months Pension Fund Benefits 1 year6 months Securities and instruments Shares, Money market Debentures Warrants Derivatives Collective investments Forex 2 years1 year

Appointing Reps Rep Register Activities of Reps Complaints resolution Operational ability Product provider contracts Compliance with Codes and FAIS Act Accounting and auditing Reporting to Registrar Competency and integrity checks Source: Section 13(2) of FAIS Act

Where any KI is replaced by new KI Is appointed or assumes office Change in personal circumstances of KI Such person not fit and proper Source: Section 8 (4) of FAIS

Identify whether classified as part of transitional arrangements or as new entrant – (see BN 104) May select further qualifications from qualifications list and complete relevant qualification within 5 years of appointment Reps must meet qualifying criteria published in subordinate legislation. FAIS Registrar published list of “recognised qualifications” for each category and subcategory Source: Board Notice 106

Product specific Regulatory Exam and exemptions depending on qualifications Qualifications not listed may gain recognition by making application which MAY be added to qualification list Entry level requirements for each License Category FAIS Registrar published list of “recognised qualifications” for each category and subcategory Source: BN 106 section 5

RE 1 will deal with core legislation applicable on FSP, representatives and Key Individuals Registrar and Advisory Committee appointed Examining Bodies Rules set for setting, examining, marking and moderating exams RE 1 must be completed 2 years after date of 1 st appointment RE 2 must be completed 6 years after date of 1 st appointment Reps can be appointed without completing RE 1 but must work under supervision Test factual knowledge of examinees on rendering financial services applicable to categories or subcategories Reps to meet 1 st and 2 nd level exams 2 nd level exams are product specific relevant to category or sub-category

Not completing CPD notional hours will result in debarment SETA is Sector Education Training Authority Accredited provider means provider of occupational learning programs Professional skills are abilities required to apply professional knowledge CPD must be verified by provider of CPD program Between 15 and 60 hours of notional learning every 3 years Process of learning and development to enable FSP, KI, Rep to perform competently in licensed categories and subcategories Conferences, courses, seminars, workshops, product seminars Professional knowledge - subjects related to financial services industry

Register of Representatives List name and whether they are mandatory Categories competent in Updating register Changing circumstances every 15 days Source: Section 13 (3) of FAIS Act

Management and oversight requires processes to recruit and appoint representatives KI’s will need to do the following: Honesty and Integrity reference checks - FSB debarred list -Professional Body membership validity Obtain details of previous experience Obtain and verify details of qualifications Check completion of Regulatory Exams Obtain and verify CPD status

Competent to act and practical experience in financial services Active involvement and ongoing gain of knowledge, skills and expertise Pre-transaction and advice sign-off Attend meetings with Supervisee Post transaction sampling and client follow up Source: BN 106 and 104

Representations must be factually correct and in plain language Adequate and appropriate in circumstances In writing and done timeously Suitable guarantees and professional indemnity Ensure clients can make informed decisions Financial product needs satisfied Rep must provide confirmation that service contract or mandate exists Adequate disclosures of relevant material information Disclosures of actual or potential own interests Source: Section 13, 16 of FAIS Act and section 3 to 5 of Code of Conduct

Disclose information on product supplier Disclose information on provider Disclose financial service information Disclosure of changes made without delay Avoid conflict of interestsDisclose conflict in writing Provided orally and then in writing All monies and fees payable to provider disclosed Basis for calculation described adequately Source: Section 3 to 5 and 7 to 9 of Code of Conduct

Source: Section 8 and 13 of FAIS Act Complies with fit and proper: Personal character qualities of honesty and integrity Competence and operational ability Financial soundness Complies with fit and proper: Personal character qualities of honesty and integrity Competence and operational ability Financial soundness FSP must at all times be satisfied that Reps and KI’s are when rendering a financial service competent to act and comply with Act and Code of Conduct Registrar may debar Reps and KI’s not meeting requirements (see REPS course) Registrar may debar Reps and KI’s not meeting requirements (see REPS course)

Source: BN 106 Competence requirements: Qualifying criteria List of qualifications Minimum experience Passed RE CPD compliance Sole proprietor and other KI must do above FSP must have 1 KI with above Juristic FSP must have 1 KI with above Reps must have minimum experience and qualifications Health services benefits accreditation Competence requirements: Qualifying criteria List of qualifications Minimum experience Passed RE CPD compliance Sole proprietor and other KI must do above FSP must have 1 KI with above Juristic FSP must have 1 KI with above Reps must have minimum experience and qualifications Health services benefits accreditation Experience requirements: Active and ongoing gaining of knowledge and skills Active involvement in rendering financial services In or outside RSA Intermittent periods not more than 5 yrs Simultaneous or multiple categories Rep must have same as KI but can be exempted and be under supervision KI must have 1 yrs practical experience in management and oversight Gained in similar or corresponding to financial services rendered by FSP Experience requirements: Active and ongoing gaining of knowledge and skills Active involvement in rendering financial services In or outside RSA Intermittent periods not more than 5 yrs Simultaneous or multiple categories Rep must have same as KI but can be exempted and be under supervision KI must have 1 yrs practical experience in management and oversight Gained in similar or corresponding to financial services rendered by FSP Regulatory Exams and CPD: All Reps and KI’s must pass RE Reps must do so w/i 2 yrs of first appointment Second level with in 6 yrs of 1 st appointment CPD requires 15 to 60 notional hours of learning over 3 year cycle Cycle starts after RE 1 passed Regulatory Exams and CPD: All Reps and KI’s must pass RE Reps must do so w/i 2 yrs of first appointment Second level with in 6 yrs of 1 st appointment CPD requires 15 to 60 notional hours of learning over 3 year cycle Cycle starts after RE 1 passed Qualifications: List of qualifications in Table A Must comply with Highest qualification required in respect of sub-categories Qualifications: List of qualifications in Table A Must comply with Highest qualification required in respect of sub-categories