Codes of Conduct

1. Codes of Conduct Presented by the Inspired Learning Regulatory Academy

2. Code of Conduct Custody, client funds and premium Disclosure requirements Managing transparency and conflict of interest Ethical conduct in Financial Services Complaints handling Risk management, insurance , advertising and direct marketing Termination

3. Custody of clients funds Source: FAIS Act Section 10 Steps taken to safeguard funds and that funds dealt with ito mandate Distinguished from FSP funds Separate Bank Account Receive funds separate from others FSP pays bank charges FSP pays accumulated interest Steps taken to safeguard funds and that funds dealt with ito mandate Distinguished from FSP funds Safe guarding of funds Receipt of Funds Issue written confirmation, and include document description for identification purposes Issue written confirmation and paid into Bank account with in 1 day of receipt Client access to funds Receipt of title documents Outcome 24

4. Disclosure Source: Section 2 General Code of Conduct A provider must at all times render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and the integrityof the financial services industry. Outcome 25

5. 25. Disclosure Source: Section 7(1)(a) & (b) A reasonable and appropriate general explanation of terms Full and frank disclosure To enable client to make an informed decision Outcome 25

6. Disclosure Source: Section 7(1)(a) & (b) Provide client with material contractual information and material illustrations. Ensure client understands the advice and is able to make an informed decision Outcome 25

7. Disclosures on FSP’s Source: Section 4 (1) Code of Conduct Full business name, registration no, postal and physical address, contact numbers, email address Financial service details and conditions /restrictions and professional indemnity KI must ensure systems and procedures in place to meet disclosure requirements on FSP’s Legal relationship between product supplier, representative and responsibility for Reps actions Is Rep acting under supervision Specific exemption applicable to FSP Name and contact details of Compliance and Complaints Dept Outcome 26

8. Commission disclosure All amounts , sums, values charges, fees, remuneration Monetary obligations mentioned, or referred to and payable to product supplier or provider Must be reflected in specific monetary terms, …. the basis of the calculation must be adequately described Outcome 27

9. Commission disclosure Source: Section 3 (1) and 7 (1) of Code of Conduct Outcome 27

10. Disclosure - Product Source: Section 7 (1) (c) of Code of Conduct Provider must as early as possible name ,class, type of financial product Any rebate arrangements Terms conditions exclusions and warranties and waiting periods Any platform fee arrangements Any guaranteed minimum periods Underlying products must disclose net investment amount Restrictions , penalties and cooling off rights Realisable funds and material tax considerations Increase in premium Outcome 27

11. Disclosures on product suppliers Source: Section 4 (1) Code of Conduct Name, physical location, postal and telephone contact details. FSP holds more than 10% shares in provider and has received more than 30% commission in 12 months KI must ensure systems and procedures in place to meet disclosure requirements on product suppliers Contractual relationship between FSP and product supplier Product supplier FSP who has contract with other FSP must provide required information about itself FSP to give client information on product supplier asap or within 30 days after oral info Name and contact details of Compliance and Complaints Dept Outcome 28

12. Managing conflicts of interest Source: Definition: Code of Conduct • Means any situation in which a provider or a representative has an actual or potential interest that may, in rendering a financial service to a client, - • (a) influence the objective performance of his, her or its obligations to that client; or • (b) prevent a provider or representative from rendering an unbiased and fair financial service to that client, or from acting in the interests of that client, • including, but not limited to - • (i) a financial interest; • (ii) an ownership interest; • (iii) any relationship with a third party; • Definition of “conflict of interest” inserted by BN 58/2010 w.e.f. 19 April 2010 Outcome 28

13. Managing conflicts of interests Source: Definition: Code of Conduct and Section 3 Actual or potential interest that may influence service to client and prevent rendering of financial services in an unbiased and fair manner Disclose existence of personal interest or actual or potential conflict and take steps to treat client fairly Non-cash incentives and other indirect consideration could be viewed as a potential conflict of interests Outcome 29

14. Ethical conduct Honesty Integrity Transparency Internal rules Disclosure Record keeping Misuse of client funds Dishonesty Forgery Mis representation Fraud Outcome 31

15. Reps role i.t.o. ethical conduct End of chapter 4 slides Outcome 32

16. Insurance Source: Section 13 of Code of Conduct A provider, excluding a representative, must, if, and to the extent, required by the registrar maintain in force suitable guarantees or professional indemnity or fidelity insurance cover.  Outcome 35

17. Advertisements Source: Section14 General Code of Conduct Advertisement May not contain statement, promise or forecast which is fraudulent, untrue or misleading • Advertising principles • Performance • data • Illustrations and forecasts • No guarantees and for illustration only • Warning about risks in buying/selling • Information about past performance • Telephonic advertising must be recorded • Records produced on request in 7 days Outcome 35

18. Termination Source: Section 20 Code of Conduct Client terminates Provider terminates Reps stops operating Give effect to client request Take steps to ensure client undertsands implications Notify clients immediately Take steps to complete or transfer business promptly Notify clients immediately Take steps to complete or transfer business promptly Outcome 35