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Licensing requirements

Licensing requirements. Key Individuals chapter 4. 2. Licensing requirements for FSp and role of ki. Source: Section 8 of FAIS Act. 37. Use of specimen mandates. Registrar must approve specimen mandates used by administrative- and discretionary FSP’s

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Licensing requirements

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  1. Licensing requirements Key Individuals chapter 4

  2. 2. Licensing requirements for FSp and role of ki Source: Section 8 of FAIS Act

  3. 37. Use of specimen mandates Registrar must approve specimen mandates used by administrative- and discretionary FSP’s No changes or amendments can be made without prior approval of Registrar

  4. 38. Obligations regarding nominee co’s Discretionary FSP cannot exist without nominee company Holding Company is Discretionary FSP Discretionary FSP Fidelity guarantees in place • Wholly owned by discretionary FSP • Holds assets for investors • Ring fences assets • Cannot incur liabilities • Only owes investors money • Has adequate insurance for theft and disasters • Annually submit financials to FSB • Failure will mean license withdrawal Nominee Company

  5. 56. Maintain license of FSP Source: Section 7 and 8 of FAIS Act Authorised FSP or Rep can only do business with person rendering financial services if person has been issued with a license for rendering financial services and conditions and restrictions on license allow rendering of such service • On license being granted registrar may impose conditions having regard to: • All facts and information Category of financial services • Category of FSP in relation to fit and proper • Any guidelines by Advisory Committee Conditions may include that where KI is replaced, or new KI appointed or personal circumstances of KI changes and effects fit and proper no person can take part in management and oversight of licensee’s business Where license granted registrar issues license authorising applicant to act as FSP in Gazette and issues copy of licence. Registrar may withdraw license or amend condition or restriction and if new KI appointed impose new conditions and restrictions and license and issue new copy

  6. 56. Impact of licensing conditions of FSP Source: Section 8 of FAIS Act

  7. 58. Annual levies payable to Registrar Levies calculated on 31 August every year and payable by 30 October in same year

  8. 57. Implication if KI leaves employ of FSP Source: Section 8 (4) (iii) of FAIS Act Any change in personal circumstances of KI affecting fit and proper status will mean person cannot take part in management or oversight of FSP unless on application been approved by Registrar

  9. 59. What civil remedies and penalties can registrar impose Source: Section 18 of Financial Advisory and Intermediary Service Regulations A person who fails to comply with these regulations is guilty of an offence and liable on conviction to a fine not exceeding R500 000 or imprisonment for a period not exceeding 5 years or both

  10. 60. Actions leading to civil remedies Source: Section 33 of FAIS Act Apply for Court order restraining person From continuing to commit act or any omission Require person to take remedial steps Payment for amount as compensation Penalty for punitive purposes Interest and cost of suit

  11. 61. Report changes and profile changes Business changes reported in 15 days Banking details Shareholder Any contact details Business Name Representatives Business address Compliance Officer Auditors Source: FAIS Introductory Provisions Definitions

  12. 62. Licensing conditions for products and services No one can act as rep unless He has employment or mandate agreement with FSP

  13. 63. Not meeting licensing conditions for products and services Suspend license until conditions met Withdraw license

  14. 64. Implication of undesirable practice publication/notification by Registrar Source: Section of FAIS Act • FSP may not carry on business practice concerned • Registrar can direct that practice must be rectified • Registrar may not make order contemplated in Financial Institutions Act • FSP must rectify as directed within 60 days after direction

  15. 70. Interrelationship between FSP’s with co-responsibility Source: Section 7 (3) of FAIS Act FSP or Rep may only conduct financial services related business with person rendering financial services if that person has a license for rendering financial services and conditions and restrictions authorises that person to render financial services

  16. 88. License conditions and restrictions Source: Section 8 (4) of FAIS ACT Registrar may impose conditions and restrictions on authority granted by license having regard to: Facts and information Category of financial services Category of financial services providers Advisory Committee Guidelines After date of granting license KI replaced, appointed or personal situation changes and not fit and proper person cannot manage FSP

  17. 89. What gives rise to profile change

  18. 90. FAIS offences Source: Section 36 of FAIS Act Contravenes or fails to comply Makes misleading statement or conceals material fact Gives Auditor of CO false, misleading information Is not rep appointed or mandated by FSP and professes to be Guilty of offence on conviction fined R1 million or 10 years imprisionment or both

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