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FSB REGULATORY EXAMINATION PREPARATION





Section 4:
First Level Regulatory Examination: Representatives

© INSETA


Table of Contents
Heading Page number

Task list 7


Glossary of Terms 9
CHAPTER 1:

EXECUTE THE REQUIRED ACTIONS AS A REPRESENTATIVE IN TERMS THE FAIS ACT 13

    1. The purpose of the Financial Advisory and Intermediary Services Act, 37 of 2002 14

    2. The roles, responsibilities and requirements regarding representatives in terms of FAIS 17

    3. The requirements for licensing by the FSB for the role of the representative. 23

    4. The Fit and Proper requirements that apply to representatives 26

    5. The purpose of the register of representatives 51

    6. Distinguish between advice and intermediary services in terms of the FAIS Act. 53

    7. Explain when representatives can act under supervision 59

    8. Supervisory requirements 63

    9. Explain the record-keeping requirements in terms of Section 18 of the FAIS Act and the general Code of Conduct 65

    10. The roles and responsibilities of the key individual in terms of FAIS 70

Summary 73

Self-Assessment Questions 74

Self-Assessment Answers 77

CHAPTER 2:

CONTRIBUTE TOWARDS OBTAINING AN FSP LICENCE 81

2.1 The requirements that an FSP must meet to maintain an FSP and a representative licence 82

2.2 The processes that are required to remain updated with regard to

other legislation, amendments, updates and requirements published

that will affect the FSP 89

2.3 Undesirable business practices 89

2.4 Licensing 92

2.5 The Ombud for Financial Services Providers (FAIS Ombud) 103

Summary 111

Self-Assessment Questions 112

Self-Assessment Answers 115
CHAPTER 3:

ADHERE TO SPECIFIC OBLIGATIONS IN TERMS OF THE RELEVANT CODE OF CONDUCT AND OTHER SUBORDINATE LEGISLATION 117

3.1 Introduction 118

3.2 Safe custody of funds and premiums 120

3.3 Disclosures 122

3.4 Discuss how to ensure transparency and manage conflict

of interests 136

3.5 Ethical conduct in the financial services environment 145

3.6 Complaints 146

3.7 Steps when providing advice 148

3.8 Various provisions of the general Code of Conduct 154

Summary 163

Self-Assessment Questions 166

Self-Assessment Answers 169
CHAPTER 4:

APPLY KNOWLEDGE OF FINANCIAL PRODUCTS 173

4.1 The different types of financial services and financial products 174

4.2 Explain the relationship between different industry players with regard to financial products 183

Summary 187

Self-Assessment Questions 188

Self-Assessment Answers 191



CHAPTER 5:

AWARENESS OF CONSEQUENCES FOR REPRESENTATIVES THAT HAVE BEEN FOUND TO ACT FRAUDULENTLY OR COMMITTED ANY OTHER ACT THAT GIVES RISE TO DEBARMENT 195

5.1 Debarment of representatives 196

Summary 202

Self-Assessment Questions 203

Self-Assessment Answers 207
CHAPTER 6:

ALIGN EXECUTION OF DUTIES AND ACTIONS WITH THE COMPLIANCE REQUIREMENTS 211

6.1 The role and function of the compliance officer 212

Summary 217

Self-Assessment Questions 218

Self-Assessment Answers 221
CHAPTER 7:

CARRY OUT THE PROPER RECORD-KEEPING ACTIVITIES 223

7.1 Record-keeping 224

Summary 230

Self-Assessment Questions 231

Self-Assessment Answers 235
CHAPTER 8:

ADHERE TO THE REQUIREMENTS OF FICA AND OTHER RELEVANT ANTI-MONEY LAUNDERING LEGISLATION, AS IT APPLIES TO THE FSP 239

8.1 Introduction 240

8.2 Background to anti-money laundering legislation 244

8.3 The money laundering legislation 244

8.4 The impact of FICA on FSPs 251

8.5 The consequences of non-compliance 262

Summary 262

Self-Assessment Questions 263

Self-Assessment Answers 266

Self-Assessment Test 269

Answers to Self-Assessment Test 278

Useful websites 288


ANNEXURE A 289
Tasks
The material provided in this guide is based on the following tasks, as published in Government Gazette Board Notice 105 of 2008 and amended by Board Notice 60 of 2010.


1

Execute the required actions as a representative in terms of the FAIS Act.

2

Contribute towards obtaining an FSP Licence.

3

Adhere to specific obligations in terms of the relevant code of conduct and other subordinate legislation.

4

Apply knowledge of financial products.

5

Awareness of consequences for representatives that have been found to act fraudulently or committed any other act that gives rise to debarment.

6

Align execution of duties and actions with the compliance requirements.

7

Carry out the proper record-keeping activities.

8

Adhere to the requirements of FICA and other relevant anti-money laundering legislation, as it applies to the FSP.

Please note that any reference to:



  • masculine gender implies also the feminine

  • singular indicates also the plural, and vice-versa.

Glossary of Terms


Advice
Any recommendation, guidance or proposal of a financial nature furnished, by any means or medium, to any client or group of clients:


  • in respect of the purchase of any financial product or in respect of the investment in any financial product, or

  • on the conclusion of any other transaction, including a loan or cession, aimed at the incurring of any liability or the acquisition of any right or benefit in respect of any financial product, or

  • on the variation of any term or condition applying to a financial product on the replacement of any such product, or the termination of any purchase of or investment in any such product, and irrespective of whether or not such advice:

  • is furnished in the course of or incidental to financial planning in connection with the affairs of the client; or

  • results in any such purchase, investment, transaction, variation, replacement or termination, as the case may be, being affected.


Credit system
Each financial adviser needs to obtain a certain number of credits depending on the type of advice he provides. Credits refer to credits on the National Qualifications Framework (NQF) and are prescribed on a particular level.
Client
Client means a specific person or group of persons, excluding the general public, who is or may become the subject to whom a financial service is extended.
Complaint
Complaint means a complaint relating to a financial service rendered by a FSP to the complainant after the date of commencement of the Act in which it is alleged that the FSP has contravened or failed to comply with a provision of the FAIS Act, and as a result thereof, the complainant has suffered or is likely to suffer financial damage. The complaint could also be that the FSP has willfully or negligently rendered a financial service to the complainant which has caused damage to the complainant.
Compliance officer
The officer appointed by an FSP to ensure compliance with the Act.
Financial product includes, amongst others


  • securities and instruments, including:

- shares in a company other than a “share block company”

- debentures and securities debt

- any money market instrument

- any warrant, certificate and other instrument acknowledging, conferring or creating rights to subscribe to, acquire, dispose of, or convert securities and instruments referred to above

- any securities as defined in section 1 of The Securities Services Act, 2002


  • a participatory interest in one or more collective investment schemes.

  • a long-term or a short-term insurance contract or policy, referred to in the Long-term Insurance Act, 1998 (Act no. 52 of 1998), and the Short-term Insurance Act, 1998 (Act no. 53 of 1998), respectively

  • a benefit provided by a pension fund organisation or a friendly society (referred to in the Friendly Societies Act 1956) to the members of the organisation by virtue of membership

  • a foreign currency-denominated investment instrument including a foreign currency deposit

  • a health service benefit provided by a medical scheme as defined in

section 1(1) of The Medical Schemes Act, 1998 (Act No. 131 of 1998).
Financial services provider means
Any person, other than a representative, who as a regular feature of the business of such a person:
- furnishes advice

- furnishes advice and renders any intermediary service



- renders an intermediary service
Fit and Proper
Financial services providers and their representatives need to be “fit and proper”. Fit and Proper refers to both the experience and knowledge of the adviser, as well as personal character qualities such as honesty and integrity. Furthermore, the adviser needs to have the competence and operational ability to fulfil the responsibilities imposed by the Act.
Financial Services Board (FSB)
The government-appointed regulator which is responsible for the implementation and monitoring of the FAIS Act. The FSB is established in terms of the Financial Services Board Act.
FAIS
Financial Advisory Services and Intermediary Services Act
The Ombud for Financial Services Providers (FAIS Ombud)
The person appointed to resolve disputes between clients and financial service providers.
FICA
Financial Intelligence Centre Act
Intermediary services are defined as
Any act, other than the furnishing of advice as defined, performed by a person for or on behalf of a client or product supplier which results in a client entering into a transaction with a product supplier in respect of a financial product, or is done with a view to a dealing in, managing, keeping in safe custody, maintaining or servicing a financial product in which a client has invested, or collecting or accounting for premiums, or processing a client’s claim against a product supplier.

Key Individuals
Natural persons responsible for the managing or overseeing of, either alone or together with other people, the activities of a financial services provider, or of a representative.
Product supplier
Any person who issues a financial product by virtue of an authority, approval or right granted to such person under any law.
Person
Person means any natural person, partnership or trust, and includes any State organ, any company and any body of persons corporate or unincorporated. The term ‘natural person’ is used simply to distinguish a natural person from a legal person such as a trust or a company.
POCA
The Prevention of Organised Crime Act
POCDATARA
The Protection of Constitutional Democracy Against Terrorism and Related Activities Act
Representative
Any person who renders a financial service for or on behalf of a financial services provider, in terms of conditions of employment or any other mandatory agreement, but excludes a person rendering clerical, technical, administrative, legal or accounting service, which service does not require judgment on the part of that person, or does not lead a client to any specific transaction in respect of a financial product in response to general enquiries.
Chapter

1
Execute the required actions as a representative in terms of the FAIS Act
This chapter covers the following criteria:


KNOWLEDGE CRITERIA

Describe the roles, responsibilities and requirements regarding representatives as defined in the FAIS Act.

Describe the role and responsibilities of the key individual as defined in the FAIS Act.

Explain the requirements for licensing by the FSB for the role of the representative.

Explain when an individual is obliged to be registered as a representative in terms of FAIS.

Explain the fit and proper requirements that apply to the representatives.

Discuss the purpose of the register of representatives.

Distinguish between advice and intermediary services in terms of the Act.

Explain when representatives can act under supervision.

Describe the implications if a representative does not meet all the requirements in terms of Fit and Proper by the relevant date.

Explain the record keeping requirements in terms of Section 18 of the FAIS Act and the General Code of Conduct.

Purpose
Before the introduction of FAIS clients who received poor advice and service from insurance agents/brokers could only try to resolve their issues by going to court and in some instances there may have been relief through on Ombud scheme. Many people never went to court because they did not have the money to do so or just simply because they did not want to go through the ordeal of a court hearing.


This chapter tells you about the measures introduced by FAIS that have changed the financial services scene. Intermediaries and FSPs have to comply with specific requirements and consumers now enjoy protection in their dealings with financial services providers.
1.1 THE PURPOSE OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT, 37 OF 2002

“The era of properly regulated financial services has dawned, which should banish the dark ages of non-disclosure, unreadable fine print, and mis-selling.”


Trevor Manuel, Minister of Finance at the launch of the Ombud for Financial Services Providers (FAIS Ombud).
Before the introduction of the Financial Advisory and Intermediary Services Act (FAIS Act), clients who felt that they received inappropriate/poor advice from insurance agents/brokers had to seek recourse through the formal court system. The basis of a claim of this nature was the concept of delictual liability. The client had to prove on a balance of probabilities that the wrongful intentional/negligent act or omission of the adviser caused damage to the client. Very few clients had the financial means, the time and the knowledge to effectively access the court system. A gap existed for a more expeditious and cost-effective way of resolving consumer complaints.
The situation was worsened by the fact that the players in the financial industry were/are all governed and regulated by different Acts:


  • Banks are regulated by the Banks Act, 94 of 1990

  • Long-term insurers are regulated by the Long-term Insurance Act, 52 of 1998

  • Short-term insurers are regulated by the Short-term Insurance Act, 53 of 1998

  • Collective investment schemes are regulated by the Collective Investment Schemes Control Act, 45 of 2002

  • Disclosures to clients were regulated by the Policyholder’s Protection Rules, issued in terms of the Long-term Insurance Act, 52 of 1993

  • Retirement funds are regulated by the Pension Funds Act, 24 of 1956

  • Medical schemes are regulated by the Medical Schemes Act, 131 of 1998.

These Acts regulate the institutions with regard to certain aspects, but their main purpose was never the protection of the consumer as far as advice is concerned. Where a financial services provider or one of its representatives provided advice relating to a financial product to a client, the field was wide open. Further confusion arose from the fact that many of these Acts created an Ombudsman or Adjudicator to assist clients with complaints. It was not always clear where a client should lodge a complaint against bad advice.






Financial Advisory and Intermediary Services Act 37 of 2002
Introductory Provisions

1 Definitions and Application
financial services provider” means any person, other than a representative, who as a regular feature of the business of such person -

 

(a) furnishes advice; or

 

(b) furnishes advice and renders any intermediary service; or

 

(c) renders an intermediary service;


FAIS has addressed these problems with its definition of “financial services provider”, which includes (see section below) almost the entire range of financial services providers, such as insurers, agents, brokers, banks, etc. In fact, any person who as a regular feature provides financial advice as covered by the FAIS Act is included. With the introduction of a single the Ombud for Financial Services Providers (FAIS Ombud), the confusion is cleared, as the consumer now knows who to complain to regarding financial advice issues.


With the introduction of the FAIS Act, the net was tightened around South Africa’s financial service providers, including financial advisers. Until the introduction of the Act, anyone, even a person without any relevant skills, knowledge or qualifications could go into the business of financial advice. The introduction of the Act followed on a long list of financial scandals such as the collapse of Masterbond. Investors lost about R600 million in the Masterbond scam and the collapse of the scheme had a devastating effect on all involved. The Nel Commission of Inquiry which followed the Masterbond saga recommended that tough new legislation be put in place. The FAIS Act was created in response to that call, according to Charles Pillai, the first Ombud for Financial Services Providers.
FAIS became effective on 30 September 2004. The purpose of the Act is to regulate rendering of all financial advisory and intermediary services to clients. Affected parties had until Section 7 date (which was 15 June 2004) to register in order to be effective as from 1 September 2004.




Financial Advisory and Intermediary Services Act 37 of 2002
 To regulate the rendering of certain financial advisory and intermediary services to clients; to repeal or amend certain laws; and to provide for matters incidental thereto.

The FAIS Act was also promulgated with the aim of changing the concept of financial broker to one of professional financial planner. To ensure that the financial planner shows reasonable care and skill when imparting financial advice to a client, the Act created the role of an Ombud to protect and advise the individual client.


The purpose of the Act therefore is:
1. The protection of consumers in the financial services environment.

2. To ensure that consumers are provided with adequate information so that they can make informed decisions.



3. The regulation of the rendering of certain financial advisory and intermediary selling activities of financial planners.
The Act states that the executive officer of the (Financial Services) Board is the Registrar of Financial Services Providers and the deputy executive officer of the board is the Deputy Registrar of Financial Services Providers. They have the powers and duties provided for, by or under this Act, which includes the duty to administer this Act. (Section 2)



Financial Advisory and Intermediary Services Act 37 of 2002
Chapter 1

Administration of Act
2. Registrar and deputy registrar of financial services providers

 

The executive officer and deputy executive officer of the Board are respectively the registrar and deputy registrar of financial services providers and have the powers and duties provided for by or under this Act or any other law.


1.2 THE ROLES, RESPONSIBILITIES AND REQUIREMENTS REGARDING REPRESENTATIVES IN TERMS OF FAIS



1.2.1 The role of a representative
The role of a representative is to provide financial services to clients for or on behalf of an FSP. In this role the representative could be an employee of the FSP. He could also provide this service in terms of any other mandatory agreement with the FSP. This means that the representative may also be a consultant, an outsourced person or a temporary employee.




Financial Advisory and Intermediary Services Act 37 of 2002
Introductory Provisions

1 Definitions and Applications
representative” means any person, including a person employed or mandated by such first-mentioned person, who renders a financial service to a client for or on behalf of a financial services provider, in terms of conditions of employment or any other mandate, but excludes a person rendering clerical, technical, administrative, legal, accounting or other service in a subsidiary or subordinate capacity, which service-

 

(a) does not require judgment on the part of the latter person; or



 

(b) does not lead a client to any specific transaction in respect of a financial product in response to general enquiries;

[Definition of “representative” substituted by s. 45 of Act 22/2008]

Definition: Representative
A representative is any person who renders a financial service for or on behalf of a financial services provider, in terms of conditions of employment or any other mandatory agreement, but excludes a person rendering clerical, technical, administrative, legal or accounting service, which service does not require judgment on the part of that person, or does not lead a client to any specific transaction in respect of a financial product in response to general enquiries.
The following examples explain the role of a representative in practical terms.
Example 1:
John is employed by Excel Life. This agreement authorises him to provide financial services for Excel Life to clients. John is a representative for Excel Life (the authorised FSP).
Example 2:
Jack is an independent broker. He has a mandatory agreement with Excel Life. This agreement authorises him to provide financial services on behalf of Excel Life to clients. Jack is a representative for Excel Life (the authorised FSP).
Persons who do not qualify as representatives in terms of FAIS are those that provide clerical, technical, administrative, legal and accounting services. These people do not have to use judgment in their jobs concerning financial advice. Their services also do not lead a client to any transaction in respect of a financial product in response to general enquiries.
Example 1:
Joan is a clerk in the admin department of Excel Life. She processes clients' applications for policies.
Example 2:
Wilfred is a legal consultant with Excel Life. He makes sure that all their policy contracts are legally correct.
Neither Joan nor Wilfred has to use judgment in their jobs with regard to a client's application for a policy. Their services do not lead a client to any transaction in respect of a financial product in response to general enquiries. They are not representatives.
1.2.2 The requirements for representatives
The representative either renders an intermediary service and/or gives advice to clients on behalf of an authorised (licensed) FSP.
As such, the representative does not act for him/herself, but for the FSP – even in the case of a sole proprietor FSP – the whole business may consist of only one person, but the person fulfils various roles and in different legal and regulatory 'persona'. Representatives are appointed by FSPs and the FSP takes responsibility for the actions (and omissions) of the representatives.
It is therefore very important that the FSP ensures that the representatives which act on its behalf, meet all the regulatory requirements.
Representatives need to be able to provide proof at all times that they are authorised to act as representatives of the FSP. In addition, the FSP has to confirm that it accepts responsibility for the activities of its representatives.




Financial Advisory and Intermediary Services Act 37 of 2002
Chapter lll

Representatives of Authorised Financial Services Providers

Section 13
13. Qualifications of representatives and duties of authorised financial services providers

 

(1) A person may not -

 

(a) carry on business by rendering financial services to clients for or on behalf of any person who -

 

(i) is not authorised as a financial services provider; and

 

(ii) is not exempted from the application of this Act relating to the rendering of a financial service; or

(Commencement date of para. (a): 30 September 2004)

 

(b) act as a representative of an authorised financial services provider, unless such person-

 

(i) is able to provide confirmation, certified by the provider, to clients -

 

(aa) that a service contract or other mandate, to represent the provider, exists; and



[Item (aa) substituted by s. 52 of Act 22/2008]

 

(bb) that the provider accepts responsibility for those activities of the representative performed within the scope of, or in the course of implementing, any such contract or mandate; and



[Item (bb) substituted by s. 52 of Act 22/2008]

 

(ii) if debarred as contemplated in section 14, complies with the requirements determined by the registrar, after consultation with the Advisory Committee, by notice in the Gazette, for the reappointment of a debarred person as a representative.

 

(2) An authorised financial services provider must -

 

(a) at all times be satisfied that the provider’s representatives, and key individuals of such representatives, are, when rendering a financial service on behalf of the provider, competent to act, and comply with the requirements contemplated in paragraphs (a) and (b) of section 8(1) and subsection (1)(b)(ii) of this section, where applicable; and



[Para. (a) substituted by s. 52 of Act 22/2008]

 

(b) take such steps as may be reasonable in the circumstances to ensure that representatives comply with any applicable code of conduct as well as with other applicable laws on conduct of business.


FAIS requires that representatives meet specific requirements:




  • A representative must confirm to clients (as certified by the FSP) that he has an employment or mandate agreement with the FSP, to represent the FSP and

  • that the FSP accepts responsibility for the activities of the representative performed in terms of the agreement

If a representative was debarred, s/he can only operate as a representative again if the procedures for reappointment of debarred representatives have been followed.

  • A representative must be fit and proper as required by the FAIS Act. (We discuss this in more detail below.)

  • A representative appointed in the period 30 September 2004 to 31 December 2009 may work under supervision whilst obtaining the required experience requirements, subject to certain conditions.

  • A representative must comply with the FAIS Act and other relevant laws which apply to the conduct of business. (We discuss compliance with the General Code in more detail below).

  • If a representative also acts as a Key Individual, it follows that the representative will also have those responsibilities, in addition to the representative responsibilities.


1.2.3 The responsibilities of representatives
The FAIS Code of Conduct requires that financial service providers and their representatives fulfil the following responsibilities:


  • They have to act honestly and fairly, and with due skill, care and diligence, in the interests of clients and the integrity of the financial services industry

  • They must have and effectively employ the resources, procedures and appropriate technological systems for the proper performance of professional activities

  • They should obtain appropriate and available information regarding clients' financial situation, financial product experience and objectives in connection with the financial service required

  • They have to act with caution and treat clients fairly in a situation of conflicting interests

  • They have to comply with all applicable statutory or common law requirements applicable to the conduct of business.






Financial Advisory and Intermediary Services Act 37 of 2002
Chapter lV

Codes of Conduct

Section 16
16. Principles of code of conduct

 

(1) A code of conduct must be drafted in such a manner as to ensure that the clients being rendered financial services will be able to make informed decisions, that their reasonable financial needs regarding financial products will be appropriately and suitably satisfied and that for those purposes authorised financial services providers, and their representatives, are obliged by the provisions of such code to -

 

(a) act honestly and fairly, and with due skill, care and diligence, in the interests of clients and the integrity of the financial services industry;

 

(b) have and employ effectively the resources, procedures and appropriate technological systems for the proper performance of professional activities;

 

(c) seek from clients appropriate and available information regarding their financial situations, financial product experience and objectives in connection with the financial service required;

 

(d) act with circumspection and treat clients fairly in a situation of conflicting interests; and

 

(e) comply with all applicable statutory or common law requirements applicable to the conduct of business.


The FAIS Code of Conduct also contains particular responsibilities relating to:




  • The making of adequate disclosures of material information, including disclosures of actual or potential own interests in relation to dealings with clients

  • Adequate and appropriate record-keeping

  • Avoidance of fraudulent and misleading advertising, canvassing and marketing

  • Proper safekeeping, separation and protection of funds and transaction documentation of clients

  • Where appropriate, suitable guarantees or professional indemnity or fidelity insurance cover and mechanisms for adjustments of such guarantees or cover by the Registrar in any particular case; and

  • Any other matter that is necessary or expedient to be regulated in the code for the better achievement of the objects of the Act.






Financial Advisory and Intermediary Services Act 37 of 2002
Chapter lV

Codes of Conduct

Section 16
16. Principles of code of conduct

 

(2) A code of conduct must in particular contain provisions relating to -

 

(a) the making of adequate disclosures of relevant material information, including disclosures of actual or potential own interests, in relation to dealings with clients;

 

(b) adequate and appropriate record-keeping;

 

(c) avoidance of fraudulent and misleading advertising, canvassing and marketing;

 

(d) proper safe-keeping, separation and protection of funds and transaction documentation of clients;

 

(e) where appropriate, suitable guarantees or professional indemnity or fidelity insurance cover, and mechanisms for adjustments of such guarantees or cover by the registrar in any particular case;

[Para. (e) amended by s. 56 of Act 22/2008]

 

(eA) the control or prohibition of incentives given or accepted by a provider; and



[Para. (eA) inserted by s. 56 of Act 22/2008]

 

(f) any other matter which is necessary or expedient to be regulated in such code for the better achievement of the objects of this Act


1.3 THE REQUIREMENTS FOR LICENSING BY THE FSB FOR THE ROLE OF THE REPRESENTATIVE



The FAIS Registrar (FSB) licenses a FSP, subject to all the requirements in the FAIS Act. Once approved, a FSP is authorised or licensed to carry on with business as "a licensed/authorised FSP."
Representatives are appointed by the FSP, either through contract of employment or through another mandate agreement.
Representatives act on behalf of the FSP and the FSP is responsible for the actions of the Representative insofar as the representative provides a financial service in respect of FAIS products. As such, the FSP must maintain a register of all the representatives and Key Individuals employed or mandated by the FSP. This register is updated (showing any changes) by the FSP and provided to the FAIS Registrar every 15 days.
The FAIS Registrar does not issue licences to representatives, nor does the Registrar "approve" Representatives. The FSP appoints Representatives and carries all the responsibilities in relation to ensuring that the Representatives are fit and proper and comply with legislation and the FAIS subordinate legislation in particular (like the General Code).




Financial Advisory and Intermediary Services Act 37 of 2002
Chapter lll

Representatives of Authorised Financial Services Providers

Section 13
13. Qualifications of representatives and duties of authorised financial services providers

 

(1) A person may not -



b) act as a representative of an authorised financial services provider, unless such person-

 

(i) is able to provide confirmation, certified by the provider, to clients -

 

(aa) that a service contract or other mandate, to represent the provider, exists; and

[Item (aa) substituted by s. 52 of Act 22/2008]

 

(bb) that the provider accepts responsibility for those activities of the representative performed within the scope of, or in the course of implementing, any such contract or mandate; and



[Item (bb) substituted by s. 52 of Act 22/2008]

 

(ii) if debarred as contemplated in section 14, complies with the requirements determined by the registrar, after consultation with the Advisory Committee, by notice in the Gazette, for the reappointment of a debarred person as a representative.



(3) The authorised financial services provider must maintain a register of representatives, and key individuals of such representatives, which must be regularly updated and be available to the registrar for reference or inspection purposes.

 

(4) Such register must -

 

(a) contain every representative’s or key individual’s name and business address, and state whether the representative acts for the provider as employee or as mandatory; and

 

(b) specify the categories in which such representatives are competent to render financial services.

 

(5) The registrar may require information from the authorised financial services provider, including the information referred to in subsection (4), so as to enable the registrar to maintain and continuously update a central register of all representatives and key individuals, which register must be published in any appropriate media.

[Subs. (5) substituted by s. 52 of Act 22/2008]

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