Subject Title - INSETA

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PurposeThe FAIS General code prescribes how and what FSPs and other role-playersmust do in order to comply with the FAIS Act. Chapter 8 introduces you tosome of these requirements. You will learn how the FSP must account formoney and funds received from clients and how to ensure adequatedisclosure to clients. The chapter also looks at ethical conduct on the financialservices industry and equips you to ensure that the required steps are takenwhen giving advice to clients.We also discuss transparency, conflict of interest, risk management,contingency planning, insurance and advertising requirements. As a keyindividual you must ensure that the direct marketing principles andrequirements are adhered to as well as the effects of termination ofagreements by clients and services by representatives.8.1 CUSTODY, CLIENT FUNDS AND PREMIUMSThe General Code 49 of the FAIS Act applies to the provision of financialservices and includes the procedures to be followed when an FSP receivesfinancial products, funds or premiums from clients and holds it in custodybefore paying it over into a bank account. These provisions are subject toany other legislation, which may be more prescriptive with regards to thecustody of financial products and funds.The key individual must ensure that there are adequate systems in place toadhere to the prescribed requirements.49 PART VIII, Section 10 of the General Code136 © <strong>INSETA</strong> - Section 1 12a
The following must be done:Separate bankaccountReceipt of fundsReceipt ofdocumentsSafeguardingThe FSP must have a separate bank account at abank, designated to receive funds and premiumsfrom clients, which is separate from any other funds,except a short term insurer that complies withSection 45 of the Short Term Insurance Act.The FSP is responsible for bank charges except thecharges that relate to deposit or withdrawal - whichthe client must pay 50 .The FSP must pay all interest accumulating in theaccount to the client or owner of the funds. 51When the FSP receives funds from a client, without abank being involved, it must issue a writtenconfirmation when the money is received. 52The money must be paid into the bank account withinone (1) day of receipt. 53When title documents are lodged with an FSP onbehalf of a client, the FSP must issue a writtenconfirmation when the documents are received,indicating description of the documents so that theycan be identified. 54If the FSP or a designated third party receives fundsor financial documents, reasonable steps must betaken to ensure that they are adequately safeguardedand that:– the funds or financial products are dealt withaccording to the client's mandate 55– the funds or financial products are easilydistinguished from the FSPs funds or assets 56– the client has easy access to an amount paidinto the separate account, less all relevantdeductions but subject to other applicablelaws. (For instance, if the funds are proceeds50 Section 10(1)(d)(iii) of the General Code51 Section 10(1)(d)(iv) of the General Code52 Section 10(1)(b) of the General Code53 Section 10(1)(d)(i) of the General Code54 Section 10(1)(a) of the General Code55 Section 10(1)(e)(i) of the General Code56 Section 10(1)(e)(ii) of the General Code© <strong>INSETA</strong> - Section 1 12a 137
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LOGO TO BE CONFIRMEDFSB REGULATORY
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Table of ContentsTasksGlossary of T
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8.8 Other provisions of the general
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TasksThe material provided in this
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PurposeThe FAIS Act introduced mark
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The duties of FSPs are described in
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CATEGORY II: SUBCATEGORIES2.1 Long-
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1.5.2 AdviceThe FAIS Act defines
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The elements of „advice‟ includ
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1.5.3 Intermediary serviceLet's loo
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1.5.2 Types of financial productsFi
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FSP licences are issued for specifi
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5. To provide a financial service m
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6. To give advice means to:a) give
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PurposeThis chapter introduces the
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Example 1:CBA Financial services is
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Submitting documentsEmploymenthisto
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financial soundness requirement - t
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The person was found guilty in any
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2.3.5 Experience requirements for k
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TABLE A: CATEGORY I EXPERIENCE REQU
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Experience requirements for a Categ
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was obtained through active involve
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IF YOU…Were appointed from 1Janua
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A key individual must have already
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Key individuals fulfilling the role
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serious enough to impugn the honest
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Self-Assessment QuestionsPlease not
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) Once a key individual has been ap
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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
Page 94 and 95: PurposeIn Chapter 4 you will learn
Page 96 and 97: TABLE ACATEGORIES 1 and IV: LEVEL O
Page 98 and 99: 4.2 SUPERVISION REQUIREMENTSKey ind
Page 100 and 101: Ensure that the supervision require
Page 102 and 103: Self-Assessment QuestionsPlease not
Page 104 and 105: Self-Assessment Answers1. In terms
Page 106 and 107: 98 © INSETA - Section 1 12a
Page 108 and 109: PurposeBefore a juristic entity can
Page 110 and 111: Understanding the process step by s
Page 112 and 113: 5.3 SECTION 13As mentioned above, S
Page 114 and 115: What must be done?The FSP must main
Page 116 and 117: Registrar, by 31/12/2013.Failure by
Page 118 and 119: It should be a condition of the emp
Page 120 and 121: 4. In order to meet the requirement
Page 122 and 123: 5. Section 13 imposes certain dutie
Page 124 and 125: PurposeChapter 6 gives you an overv
Page 126 and 127: Ramifications for the FSP if debarm
Page 128 and 129: All other administrative or legal p
Page 130 and 131: 3. May an FSP use information obtai
Page 134 and 135: PurposeDuring the course of the lif
Page 136 and 137: In the discussion of the purpose an
Page 138 and 139: caused by or arose out of the carry
Page 140 and 141: c) within 60 days after the busines
Page 146 and 147: of crime, money-laundering legislat
Page 148 and 149: Requirements.the existence of a spe
Page 150 and 151: Disclosure must include the followi
Page 152 and 153: 8.4 MANAGING TRANSPARENCY AND CONFL
Page 154 and 155: Where the juristic person is neithe
Page 156 and 157: what measures were taken to avoid/m
Page 158 and 159: A provider must continuously monito
Page 160 and 161: 2. Identify the financial product o
Page 162 and 163: 1. A brief summary of the informati
Page 164 and 165: are addressed in the business-speci
Page 166 and 167: 8.8.3 Insurance 89One of the risks
Page 168 and 169: WHO? BY WHEN? WHAT?Category III pro
Page 170 and 171: a representative, the information m
Page 172 and 173: Record of advice 106A direct market
Page 174 and 175: influence the objective exercising
Page 176 and 177: 4. What needs to be disclosed to cl
Page 178 and 179: Self-Assessment Answers1. Which of
Page 180 and 181: 8. The two main requirements of giv
Page 182 and 183: PurposeThis chapter introduces you
Page 184 and 185: „compliance practice‟ means a c
Page 186 and 187: Internal compliance officer:where t
Page 188 and 189: 9.1.5 Withdrawal of a compliance of
Page 190 and 191: One of the main functions of a comp
Page 192 and 193: 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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