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The 2008 FAIS Report

The 2008 FAIS Report. Presented by Richard Rattue. Agenda. THE ANNUAL REPORT Section 17(4) FAIS Session 1 09.00 -10.30 Submission and Deadlines Report Review: Category 1 (With / out CO) Break 15 mins 10.30-10.45am Session 2 10.45 – 11.00 Report Review: Category 2 Session 3

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The 2008 FAIS Report

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  1. The 2008 FAIS Report Presented by Richard Rattue

  2. Agenda THE ANNUAL REPORT Section 17(4) FAIS • Session 1 • 09.00 -10.30 • Submission and Deadlines • Report Review: Category 1 (With / out CO) • Break 15 mins • 10.30-10.45am • Session 2 • 10.45 – 11.00 • Report Review: Category 2 • Session 3 • 11.00-11.30 • Report Submission : FSB Presentation • Session 4 • 11.30-12.00 • Questions & Close

  3. Housekeeping • Please make sure that you have registered • Copies of all presentations will be on our website for download next Monday • Upon receipt of payment delegates will receive our internal guidance papers on the report via email. • FPI Members will get 3 CPD points • Delegates will need a copy of the relevant report for this session. • Please switch off cell phones

  4. Introduction • Report to be completed by all FSP’s in terms of Section 17(4) of FAIS Report has four flavours • Category 1 FSP’s • Category 2 FSP’s • Category 3 FSP’s • Separate report if you do not require a CO in terms of Section 17(1) of FAIS

  5. 2008 Report Overview • Fewer sections overall • Fewer questions due to consolidation • More focus on key risk areas i.e J Reps • Amalgamation of prior questions • Additional Monitoring Areas for CO’s • Improved structure • New Sections i.e Risk Man & Terminations • More Annexures for Cat 1 FSP’s • No efficacy or sampling submissions required from CO’s

  6. Clarity of Terms • Report Date • Report Period • Submission Date

  7. Gazetted Table A

  8. Revised Reporting Dates

  9. Report Columns • 1 Yes • compliant • 2 No • non compliant • 3 Not applicable • Cannot enter in shaded areas of report • 4 Developmental area • areas of concern identified and are to be fixed in a reasonable time frame • 5 Annexures or numbers • Number your submissions correctly

  10. 1. License Conditions and Restrictions / Financial Products • Fewer questions • Advise Registrar within 15 days of any changes • 1.4.1 / 1.4.2 Details of other regulators • 1.5.4 – Details of related parties where applicable 2. Key Individuals • Control of K.I.’s. • Changes in circumstances. • Fit and Proper Advancement • 2.3.3 Procedures to meet Column 4

  11. 3. FSP License 4. Representatives • Display of original or certified copy of license at every business premises . • 4.3/ 4.4 Juristic Rep Controls • Keeping control of your Reps and their Fit & Proper status. • Disclosure of supervised Reps and status and No of supervisors • Ongoing reviews /assessment of Reps under supervision. • Attachments re procedures • 4.5.3.8.Non compliance Report • Compliance of all Reps with the Gen Code of Conduct. • Debarment Details.

  12. 5. Insurance Cover • Fidelity guarantee • provides an employer with insurance cover for financial loss resulting from an employee's dishonesty. • PI Cover: • purpose is to cover your company against the potential liability and claims caused as a result of the professional work you undertake. • Guarantees: • A guarantee is effected to provide protection against an uninsured contingencies Intermediaries Guarantee Facility (IGF) .

  13. 6. Compliance Function. • Status of Compliance Function • CO Function Status • Regular reports submitted by the CO. • Quarterly Removed • Number of visits for outsourced CO’s • 6.4 CO to highlight additional issues • Efficacy Statement Removed

  14. 7. Record Keeping. • Section 18 • verbal communications with clients • complaints. • non compliance i.e. /breaches register • premature cancellation of transactions. • Continued compliance of Reps • Section 3.2 Gencode. • electronic /safe storage etc • accessible within 7 days • Longevity ( 5 years after product termination date.

  15. 8. General Code of Conduct. • 8.1 General Provisions. • 8.1.1 Conflict of Interest Policy • 8.1.2 Submit as an Annexure • Receipt of non cash incentives. • Disclosure thereof. • 8.2 Disclosures. • 8.2.1. Direct Marketer • 8.2.3. Details of non compliance iro Section 4,5,7. of General Code • 8.2.4. Provide copy of disclosure doc as an Annexure

  16. 8.3 Direct Marketing • Voice recording systems in place • CO monitoring of disclosures required • 8.3.2.4 Non Compliance Annexure Required 8.4 Advice • CO monitoring of Analysis and Record of Advice required • 8.4.2.5 % iro Section 8(4)a • 8.4.2.6Non Compliance Annexure Required –Record of Advice

  17. 8.5 Fund Custody. If yes you need. • Auditor. Section 19(3) Report • Separate Accounts • Premium Collection Section 45 of STI Act • 8.5.4 – Amount of IGF Cover • 8.5.5 – IGF Number • 8.5.6 - IGF Cover Schedule • CO to monitor procedures

  18. 8.6 Risk Management. • Section 11 & 12 Gen Code • 8.6.2 RM Plan Documented • 8.6.3 CO to monitor RM Plan • 8.6.4 Submit details of how RM plan is monitored • 8.7 Advertising. • 8.7.1 –Does FSP Advertise • Procedures in place to comply with Section 14. • Telephonic Advertising • CO to monitor voice logging • 8.8 Complaints . • Resolution mechanisms that comply with Sections 16-19 of the Gen code • Records of Complaints • 8.8.3 CO to submit annexure

  19. 8.9 Termination Procedures • Procedures to comply with Section 20 (Termination of client relationship) (Termination of FSP business) (Termination of Rep) • 8.10 Waiver of Rights. • Reps to use approved documents to ensure no waiver of rights is requested or induced form the client. • 8.10.2 –CO Required to monitor compliance with Sect 21 of Gen Code • 8.10.3 – Details of non compliance on Annexure

  20. 9. Exemptions • Board Notice 104 • Temp Exemption for Cat A providers from minimum qualifications. • Board Notice 97 • Exemption of executors , liquidators and other related persons. • 9.2.2.1. –CO Required to monitor compliance with BN 97 • 9.2.2.2 – Details of non compliance on Annexure

  21. 10. Money Laundering Control • Customer Identification • Record Keeping • Staff Training • Reporting • Copy of Internal rules required • Money Laundering Control officer details • FICA Exemption 4 Usage 10.7.Procedures to enable staff to identify and report 10.8Procedures to Risk Rate clients • 11. Financial Soundness • Solvency Requirements • Section 19 Monthly Records

  22. SECTION 2 – Forex FSP’s Consolidated Questions in 2008 • Forex FSP’s • Duties & Obligations 12.1 -12.4 • Forex Investment Advisors 12.5.1 -12.5.8 • 12.5.5 Details of trading platform /system used

  23. SECTION 3- Health Service Benefits • 13.2.1 – Details of Suspensions , withdrawals or lapses in Annexure • 13.2.2.- ORG and BR numbers required • 13.2.3 – Corporate Client Info

  24. Section 4 • Attachments and Signature • All attachments to be referenced to the relevant question number • Both Compliance Officer and a key individual to sign off the report before submission is made to the regulator

  25. Compliance Report 2008 NO CO • To be completed by all individuals who do not need to appoint a compliance officer in terms of Section 17(1) of FAIS • Slimmed down version. • Less annexures • No sampling • Signed off by KI of FSP

  26. Report Structure • SECTION 1. • To be completed by all FSP’s • SECTION 2. • Forex FSP’s Only • SECTION 3 • Health Services Benefits • SECTION 4 • Annexure(s) and sign off

  27. 1.License Conditions • Updating Information • Financial Product Controls 1.4 Other Regulators –New Annexure 1.5.4 Related Party Information • 2.Key Individuals • Circumstances and Conditions • 2.2 Column 4 Fit and Proper • 3.License • Display Original or Certified copy • 4.Staff Compliment • Annexure Required • 5.Insurance Cover

  28. Section Overview • 6 Compliance function • 7Record keeping • 8.1 General Provisions • 8.2 Disclosure • 8.3 Direct Marketing • 8.4 Advice • 8.5 Product custody • 8.6 Risk Management • 8.7 Advertising • 8.8 Complaints • 8.9 Termination of Agreement or Business • 8.10 Waiver of rights • 9.0 Exemptions • 10 Money Laundering • 11 Financial soundness

  29. 15min Break

  30. Welcome back to the second session

  31. Discretionary FSP’s Section 1 - same as Category 1 FSP’s.Except 9.3 Additional Exemption BN 15 of 2008 (Supervision) • 9.3.1 CO to report on usage by FSP Section 2 • 12.1 Obligations /Prohibitions • 12.2 Mandates • 12.3. Reporting • 12.3.2 Section 6 Compliance

  32. Discretionary FSP’s • 12.4 Administration • 12.4.2 Details of Computer packages iro admin • 12.4.3 Outsource arrangements iro admin • 12.5 Assets under Management • 12.5.2 Audit Status of accounts • Nominee Companies • Questions Consolidated • General Functions • Wrap Fund Details • Hedge Fund Details • 12.7.5 Names of product supplier used by HF FSP

  33. FSB Presentation Ronel Reyneke Specialist Analyst FAIS SUPERVISION

  34. Closing thoughts • Take it seriously • Honesty is the best policy. • Compliance Officer / Key Individual should not compromise report content. • Get it in on time.

  35. Knowledge Service(Logon for 14 Day Free Trial) • Financial Services Compliance Portal • Key Regulatory Information at your fingertips • Targeted to the Compliance Community • Internal CO’s • Compliance Practices

  36. Thank you • We hope to see you again soon

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