Competency Product Category,minimum experience, academic qualifications, Conditions Sound financial security No unrehabilitated insolvent Assets exceed.

OVERVIEW AND PREPARATION TECHNIQUES

Presented by the Inspired Learning Regulatory Academy

MINIMUM LICENSE REQUIREMENTS

CompetencyProduct Category ,minimum

experience, academic qualifications, Conditions

Sound financial security No unrehabilitated insolvent

Assets exceed liabilities

Honesty and IntegrityGood character and integrity

Found guilty, fined , prohibited Court of Law or civil matter etc

Operational AbilityBusiness address,

communication facilities, bank account, money laundering

controls,

Fit and Proper

USE OF LICENSE

Displayed in prominent and

durable manner

Reference in all business

documentation, advertisements,

promotional material

Not use license when withdrawn or

suspended

Immediately or within reasonable

time available

OUTCOME 16

COMPLIANCE PROVISIONS WITHIN FSP

•Have suitable guarantees or professional indemnity

•May not contain statement, promise or forecast which is fraudulent, untrue or misleading

•Structure internal control procedures to ensure business carried on in orderly and efficient manner

•Effectively employ resources, procedures and appropriate technological systems

Control Measures

Specific Control

Measures

InsuranceAdvertising

OUTCOME 43

APPOINTMENT OF COMPLIANCE OFFICER

No one can act as rep

unless

He has employment or mandate

agreement with FSP

Authorized FSP with more than one KI or Rep, subject to 35 (1) (c), must

appoint Compliance Officer

CO is any person with suitable qualifications and experience

determined by Registrar

Provisions of Section 19 regarding auditor apply with changes to CO

OUTCOME 43

ROLE / FUNCTION OF COMPLIANCE OFFICERSource: Board Notice 127

CO approved by Registrar

No longer complies with criteria and guidelines

Registrar may make know withdrawal and reasons in

Gazette

• May withdraw approval if• CO contravened / failed

to comply with FAIS or

• Criteria set by registrar in consultation with Advisory Committee

• Or any appropriate media

OUTCOME 43

ROLE / FUNCTION OF COMPLIANCE OFFICER

FSP must establish and maintain procedures to be followed by provider and

Reps to ensure compliance

CO must submit reports to registrar in manner and in

matters determined by registrar

Provisions also apply to FSP who has 1 key

individual or without a representative

Source: FAIS Act Section 17

OUTCOME 43

FUNCTIONS OF COMPLIANCE OFFICER

The CO is required to supervise the compliance function. This CO must ensure requirements of FAIS met through procedures which the FSP (key individual) must establish. These may be:• Examination of the compliance function at the time of

license application; • Direct examination of the compliance function as part of

the general on-site inspections of the FSP• Direct examination of the internal policies and

operational procedures and controls • Periodic assessment which should be filed with the

regulators for review• Revising and re-examination of the compliance function

where issues had previously been identified with the FSP about the operation of the function.

Source: Section 17 of FAIS Act and www.fsa.gov

OUTCOME 43

UNDESIRABLE BUSINESS PRACTICE

Harming relationships

Unreasonably prejudicing client

Deceiving any clientUnfairly effecting any client

If practice continues objectives of Act will be

defeated

Source: Section 34 of FAIS Act

Practice directly or indirectly

OUTCOME 13

REGISTRAR PUBLISHES UNDESIRABLE NOTICE

Publishes intention in Gazette

Gives reasons in Gazette and invites written representation receivable 21

days from publication

Declaration published and FSP must stop

practice

OUTCOME 14

Registrar may suspend or withdraw license at any time if

Licensee no longer meets fit and proper requirements

Licensee did not make full disclosure on license application form

Failed to comply with other provisions of FAIS

Is liable to pay levy or administrative sanction

LICENSE SUSPENSION

OUTCOME 17

LICENSE WITHDRAWAL

Registrar must make known the reasons

for the suspension or withdrawal and any

terms attached thereto by notice in

the Gazette

Provisionally suspend or withdraw a

licence. Grounds therefore and period

and terms of suspension

Make known the suspension or

withdrawal in the Gazette

Give licensee reasonable time to

respond

OUTCOME 17

RECOURSE FOR LICENSE SUSPENSION

The Registrar must consider a response received from the licensee and may decide to: • Lift the provisional suspension or withdrawal • Make it final

The licensee must be advised accordingly and notification must happen in the Gazette and other media if necessary.

If a license is suspended or withdrawn, the licensee is not authorised to act as a FSP.

Source: FAIS Act Section 9

OUTCOME 18

Licensee becomes permanently disabled Finally sequestrated Dies Finally liquidated or dissolved License becomes dormant Licensee voluntarily and finally surrenders

license to Registrar Advise registrar in writing

LAPSING OF A LICENSE

OUTCOME 19

LAPSING VS SUSPENSION/ WITHDRAWALS

Suspension or withdrawal of a license is the result of non-compliance with the requirements of the FAIS Act: • Originates as a result of FSP actions or omissions • FSB may allow reinstatement of suspended or withdrawn licenses under

certain conditions • After suspension or withdrawal a FSP will be debarred to apply for a new

license. • There are implications for FSP’s registered under the Medical Schemes Act as

the FSP will loose the accreditation if the license is suspended when a license is lapsed

Lapsing of a license is the result of factors other than non-compliance: • Lapsing of the license is initiated by the FSP, following an event that gave rise it • There are no provisions in the Act to reinstate a lapsed license. • There are no requirements for debarment on lapsing of a license • There are no implications from other legislation when a license is lapsed

Source: FAIS Act Section 11

OUTCOME 20

REINSTATEMENT OF LICENSE

1. There are no provision in the Act to reinstate a lapsed license. A new application must be submitted . But this can only happen if that entity has not been permanently disbarred from receiving a license

for that product category 2. The Registrar can reinstate a suspended license once all the

conditions have been met 3. The Registrar may impose conditions if a suspension or

withdrawal is lifted. These conditions may include certain actions by the FSP in relation to its business

Source: FAIS Act Section 11

OUTCOME 21

REINSTATEMENT OF AUTHORISATION IMPOSED

The Registrar must consider a response received from the licensee and may decide to: • Lift the provisional suspension or withdrawal • Make it final

• Withdrawn license cannot be reinstated• Registrar can reinstate withdrawn license once conditions met• Registrar can impose conditions is suspension lifted

OUTCOME 22

DETERMINATIONS BY OMBUD

Registrar informs licensee of intention to suspend and gives reasonable time for submission

Inform licensee of intended period and terms of suspension

Prohibition on concluding new business from date of suspension

For unconcluded business determine measures for protection in interests of clients of licensee

Terms for lifting of the suspension

Registrar must consider any response received and may suspend or withdraw license thereafter or not to and

must notify licensee

OUTCOME 23

COMPLAINTS

Lodge complaint in writing Record complaints for 5 years

Handle complaints in timely and fair manner Investigate and respond promptly

Not resolved to clients satisfaction advise client of further steps

available

Source: Section 16 of FAIS Act

OUTCOME 33

COMPLAINTS CONTINUEDSource: Section 17 of FAIS Act

FSP must have internal complaint resolution

system and procedures

Maintain comprehensive policy and have systems / procedures for resolution

Clients must have full knowledge or resolution

procedures

Access to facilities such as branch or electronic /

postal means

Resolution to be fair to both client and provider

OUTCOME 33

COMPLAINTS CONTINUED AGAINSource: Section 19 of FAIS Act

FSP internal complaint resolution system must

reduce details of internal complaint resolution system to

writing

Handle complaints in timely and fair manner

Access to procedures are at all times available to clients and be made

known

Include clear summary of procedure after dismissal of complaint or if client wishes to

proceed to Ombud

Name , address and contact details of Ombud

OUTCOME 33

ROLE AND POWERS OF OMBUD

Consider and dispose of complaintsProcedurally fair, informal,

economical and expeditiously

Equitable in circumstances with regard to contractual relationship

An provisions of Act

Ombud must be independent and impartial

Source: FAIS Act Sections 20 to 32

OUTCOME 23

RECEIPT OF COMPLAINTS BY OMBUD

Explore any reasonable prospect of resolving complaint by settlement

May resolve complaint by conciliation , make recommendation

All parties have had time to respond

In determining officially received complaint follow and implement any procedure

Allow any party right of legal representation

Ombud cannot proceed to investigate unless

Has informed other parties in writing Is satisfied all parties have particulars of claim

DETERMINATIONS BY OMBUD

Dismiss complaint or uphold complaint

Make award of fair compensation to complainant

Monetary award payable may bear interest

Determination reduced to writing with all reasons

Copies to registrar and all parties concerned

May lodge appeal and appeal goes to clerk or registrar of court for determination

Source: FAIS Act Sections 20 to 32

OUTCOME 23

ROLE POWERS AND DUTIES OF REGISTRAR

Approach a Court for restraining order against person

contravening FAIS Act

Declare a business practice undesirable

Institute action in Court of Law against

any person for payment of

compensation on behalf of another

person and punitive damages

Institute civil proceedings on

behalf of a person against FSP

OUTCOME 14

PENALTIESContravention and failure to

comply

Misleading, false or deceptive statement

Conceals material fact

Guilty of offence, on conviction to fine not exceeding R 1 million

Or imprisonment not exceeding 10 years or both

OUTCOME 14