Subject Title - INSETA

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The duties of FSPs are described in the Act and subordinate legislation.There are specific provisions for compliance officers and compliancearrangements, requirements for record maintenance, disclosure, andauditing.The FAIS Registrar has power to enforce the Act and to impose penalties.The Act includes provisions relating to civil remedies, undesirable practices,offences and penalties, voluntary sequestration, winding-up and closure.The Act describes the role and power of the Ombud for Financial ServicesProviders (FAIS Ombud).1.3 PRODUCT CATEGORIES IN THE FAIS ACT1.3.1 The product categories in the FAIS ActEach authorised FSP is licensed to provide financial services in relation tocertain FAIS products. These products are defined and grouped in productcategories.FSPs may have various licences in respect of different product categories.The product category may also have different products falling in the maincategory and these are called product sub-categories.The category descriptions in the FAIS Act are as follows:“Category I”, in relation to a financial services provider, means all persons,other than persons referred to in Categories II, IIA, lll and IV, who areauthorised to render the financial services (other than financial servicesmentioned in Categories II, IIA, III and IV) as set out in the relevantapplication;“Category II”, in relation to a financial services provider, means all personswho are authorised as discretionary FSPs as set out in the relevantapplication;“Category IIA”, in relation to a financial services provider, means all personswho are authorised as hedge fund FSPs as set out in the relevant application;“Category III”, in relation to a financial services provider, means all personswho are authorised as administrative FSPs as set out in the relevantapplication;4 © <strong>INSETA</strong> - Section 1 12a
“Category IV”, in relation to a financial services provider, means all personswho require licences as Assistance Business FSP.The classification of the categories and sub-categories are important for thefollowing reasons:FSP licences are issued for specific product categories;Key individuals and representatives are approved and appointed tobe operative within certain product categories and sub-categories;Compliance officers are approved for certain product categories andsub-categories; andthe fit and proper requirements relate to product Categories and subcategories.1.3.2 Examples of product sub-categories in the FAIS ActLet‟s look at some examples of product categories and sub-categories:CATEGORIES I: SUBCATEGORIES1.1 Long-term Insurance Subcategory A1.2 Short-term Insurance Personal Lines1.3 Long-term Insurance Subcategory B1.3.1 Subcategory B11.3.2 Subcategory B21.4 Long-term Insurance Category C1.5 Retail Pension Benefits1.6 Short-term Insurance Commercial Lines1.7 Pension Fund Benefits1.8 Securities and instruments: Shares1.9 Securities and Instruments: Money market instruments1.10 Securities and Instruments: Debentures and securitised debt1.11 Securities and Instruments: Warrants, certificates and otherinstruments acknowledging debt1.12 Securities and Instruments: Bonds1.13 Securities and Instruments: Derivative instruments excludingwarrants1.14 Participatory interests in one or more collective investment schemes1.15 Forex Investment Business1.16 Health Service Benefits1.17 Long-term Deposits1.18 Short-term Deposits1.19 Friendly Society Benefits© <strong>INSETA</strong> - Section 1 12a 5
Page 1 and 2: LOGO TO BE CONFIRMEDFSB REGULATORY
Page 3 and 4: Table of ContentsTasksGlossary of T
Page 5 and 6: 8.8 Other provisions of the general
Page 7 and 8: TasksThe material provided in this
Page 10 and 11: PurposeThe FAIS Act introduced mark
Page 14 and 15: CATEGORY II: SUBCATEGORIES2.1 Long-
Page 16 and 17: 1.5.2 AdviceThe FAIS Act defines
Page 18 and 19: The elements of „advice‟ includ
Page 20 and 21: 1.5.3 Intermediary serviceLet's loo
Page 22 and 23: 1.5.2 Types of financial productsFi
Page 24 and 25: FSP licences are issued for specifi
Page 26 and 27: 5. To provide a financial service m
Page 28 and 29: 6. To give advice means to:a) give
Page 30 and 31: PurposeThis chapter introduces the
Page 32 and 33: Example 1:CBA Financial services is
Page 34 and 35: Submitting documentsEmploymenthisto
Page 36 and 37: financial soundness requirement - t
Page 38 and 39: The person was found guilty in any
Page 40 and 41: 2.3.5 Experience requirements for k
Page 42 and 43: TABLE A: CATEGORY I EXPERIENCE REQU
Page 44 and 45: Experience requirements for a Categ
Page 46 and 47: was obtained through active involve
Page 48 and 49: IF YOU…Were appointed from 1Janua
Page 50 and 51: A key individual must have already
Page 52 and 53: Key individuals fulfilling the role
Page 54 and 55: serious enough to impugn the honest
Page 56 and 57: Self-Assessment QuestionsPlease not
Page 58 and 59: ) Once a key individual has been ap
Page 60 and 61: Self-Assessment Answers1. Which of
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) Once a key individual has been ap
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56 © INSETA - Section 1 12a
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PurposeChapter 3 introduces you to
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Let's look at the responsibilities
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For example, a person may have star
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3.3.3 Competency requirements for r
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We discussed the tables under 2.3 a
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Experience requirements for Categor
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The main reason for the differentia
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Regulatory examinations for represe
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The purpose of the register is to:p
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Part of the management and oversigh
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Let‟s look at a summary of the co
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c) The representative register need
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Self-Assessment Answers1. In terms
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8. The general experience requireme
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PurposeIn Chapter 4 you will learn
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TABLE ACATEGORIES 1 and IV: LEVEL O
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4.2 SUPERVISION REQUIREMENTSKey ind
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Ensure that the supervision require
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Self-Assessment QuestionsPlease not
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Self-Assessment Answers1. In terms
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PurposeBefore a juristic entity can
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Understanding the process step by s
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5.3 SECTION 13As mentioned above, S
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What must be done?The FSP must main
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Registrar, by 31/12/2013.Failure by
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It should be a condition of the emp
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4. In order to meet the requirement
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5. Section 13 imposes certain dutie
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PurposeChapter 6 gives you an overv
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Ramifications for the FSP if debarm
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All other administrative or legal p
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3. May an FSP use information obtai
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PurposeDuring the course of the lif
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In the discussion of the purpose an
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caused by or arose out of the carry
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c) within 60 days after the busines
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PurposeThe FAIS General code prescr
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of crime, money-laundering legislat
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Requirements.the existence of a spe
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Disclosure must include the followi
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8.4 MANAGING TRANSPARENCY AND CONFL
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Where the juristic person is neithe
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what measures were taken to avoid/m
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A provider must continuously monito
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2. Identify the financial product o
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1. A brief summary of the informati
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are addressed in the business-speci
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8.8.3 Insurance 89One of the risks
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WHO? BY WHEN? WHAT?Category III pro
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a representative, the information m
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Record of advice 106A direct market
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influence the objective exercising
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4. What needs to be disclosed to cl
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Self-Assessment Answers1. Which of
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8. The two main requirements of giv
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PurposeThis chapter introduces you
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„compliance practice‟ means a c
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Internal compliance officer:where t
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9.1.5 Withdrawal of a compliance of
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One of the main functions of a comp
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Internal auditors normally audit co
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Information about the FSPs adherenc
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Compliance reports must be submitte
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PurposeThe application process for
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the financial services business as
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Disclose compliance with other appl
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easons why the provisional suspensi
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impartial tribunal or forum. This i
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10.3.2 Civil remediesRestrainingord
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10.4 LEVIES PAYABLE IN TERMS OF THE
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Any contravention of or failure to
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Self-Assessment Answers1. Which of
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PurposeAs a key individual, you nee
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11.2 EFFECT OF VOLUNTARY SEQUESTRAT
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2. A licence of ANY FSP may lapse:a
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5. Before sequestration, winding-up
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PurposeIn Chapter 12 you will find
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3. The records and documentation Th
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The Registrar has certain powers in
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SummaryThe FAIS Act requires string
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4. Section 22 of the FICA requires
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PurposeManaging the infrastructure
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A key individual, in respect of an
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The financial statements can either
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Self-Assessment Answers1. The opera
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PurposeChapter 14 introduces you to
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Sec 19(4) states that: the auditor
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2. The financial statements must:a)
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PurposeThe FIC Act imposes certain
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Accountable institutionsThe FIC Act
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The four (4) money laundering contr
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The documents used to identify and
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In an FSB FAIS Newsletter, the FSB
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Protection of Constitutional Democr
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steps to be taken to determine and
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3. Section 21(1) of the FICA requir
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PurposeChapter 16 is the last part
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The Ombud for Financial Services Pr
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11. If the complainant is unhappy w
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the contractual or other legal rela
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Self-Assessment Answers1. The funct
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