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FAIS Act Implementation Report Portfolio Committee on Finance

This report provides an overview of the implementation of the Financial Advisory and Intermediary Services Act (FAIS), including important definitions, advisory committees, recognized bodies, fees, exemptions, codes of conduct, and the Office of Ombud for Financial Services Providers.

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FAIS Act Implementation Report Portfolio Committee on Finance

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  1. REPORT BACK ON THE IMPLEMENTATION OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT (“FAIS”)

  2. PORTFOLIO COMMITTEE ON FINANCE 15 AUGUST 2003 GERRY ANDERSON DEPUTY EXECUTIVE OFFICER

  3. CONTENT • INTRODUCTION • IMPORTANT DEFINITIONS • ADVISORY COMMITTEE ON FINANCIAL SERVICES PROVIDERS (SECTION 5) • RECOGNISED BODIES (SECTION 6) • FEES (SECTION 41) • EXEMPTIONS (SECTIONS 12 & 44)

  4. CONTENT (CONTINUED) • CODES OF CONDUCT (SECTION 15) • OFFICE OF OMBUD FOR FINANCIAL SERVICES PROVIDERS (SECTIONS 20 – 31) • REGULATIONS (SECTION 35) • DETERMINATION OF SECTION 7 DATE • PUBLICATIONS IN GAZETTE

  5. 1. INTRODUCTION • PROMULGATION OF MAJORITY OF PROVISIONS OF THE FAIS ACT (15 NOVEMBER 2002) • PROMULGATION OF SECTIONS 20 – 31 RE OFFICE OF THE OMBUD (8 MARCH 2003) • SECTION 13(1)(B) - REPRESENTATIVES

  6. 2. IMPORTANT DEFINITIONS • FINANCIAL SERVICE PROVIDERS • KEY INDIVIDUALS • REPRESENTATIVES • FINANCIAL PRODUCTS • INTERMEDIARY SERVICES • ADVICE

  7. 3. ADVISORY COMMITTEE ON FINANCIAL SERVICES PROVIDERS (SECTION 5) • INITIAL APPOINTMENT OF MEMBERS BY MINISTER (25 NOVEMBER 2002) • ADDITIONAL APPOINTMENTS BY MINISTER (10 MARCH 2003) • MEETINGS OF ADVISORY COMMITTEE (18 AS AT 7 AUGUST 2003)

  8. 4. RECOGNISED BODIES(SECTION 6) • ROLE OF RECOGNISED BODIES AS DELAGATEES • DELEGATED FUNCTIONS (2 MAY 2003) • AUTHORISATIONS APPROVED IN PRINCIPLE

  9. 4. RECOGNISED BODIES(CONTINUED) • NAMES OF PROVISIONALLY APPROVED RECOGNISED BODIES: - THE ARCAY GROUP LIMITED - COMPLIANCE INSTITUTE OF SA - CELESTIS BROKER SERVICES - GROUP ADMINISTORS FORUM - PRICEWATERHOUSECOOPERS - FINANCIAL PLANNING INSTITUTE

  10. 4. RECOGNISED BODIES(CONTINUED) - FOREX INVESTMENT ASSOCIATION - INDEPENDENT BROKERS COUNCIL - MOONSTONE INFORMATION REFINERY (PTY) LTD. - THE SA FINANCIAL SERVICES INTERMEDIARY ASSOCIATION

  11. 5. FEES (SECTION 41)

  12. 5. FEES (CONTINUED)

  13. 5. FEES (CONTINUED)

  14. 5. FEES (CONTINUED)

  15. 5. FEES (CONTINUED)

  16. 5. FEES (CONTINUED)

  17. 5. FEES (CONTINUED)

  18. 5. FEES (CONTINUED)

  19. 5. FEES (CONTINUED)

  20. 5. FEES (CONTINUED)

  21. 5. FEES (CONTINUED)

  22. 5. FEES (CONTINUED)

  23. 5. FEES (CONTINUED)

  24. 5. FEES (CONTINUED)

  25. 5. FEES (CONTINUED)

  26. 6. CATEGORIES OF FSP’S • CATEGORY (I) - LONG-TERM INSURANCE : CATEGORY A - SHORT-TERM INSURANCE: PERSONAL LINES - LONG-TERM INSURANCE: CATEGORY B - LONG-TERM INSURANCE: CATEGORY C - RETAIL PENSION BENEFITS - SHORT-TERM INSURANCE: COMMERCIAL LINES

  27. CATEGORIES OF FSP’S (CONTINUED) - PENSION FUND BENEFITS (EXCLUDING RETAIL PENSION BENEFITS) - SECURITIES AND INSTRUMENTS - PARTICIPATORY INTERESTS IN COLLECTIVE INVESTMENT SCHEMES - FOREIGN CURRENCY DENOMINATED INVESTMENT INSTRUMENTS - HEALTH SERVICES BENEFITS

  28. 6. CATEGORIES OF FSP’S (CONTINUED) - DEPOSITS DEFINED IN THE BANKS ACT EXCEEDING 12 MONTHS - DEPOSITS DEFINED IN THE BANKS ACT - 12 MONTHS OR LESS - FRIENDLY SOCIETY BENEFITS

  29. 6. CATEGORIES OF FSP’S (CONTINUED) • CATEGORY (II) - DISCRETIONARY FSP • CATEGORY (III) - ADMINISTRATIVE FSP (LISP)

  30. EXEMPTIONS (SECTIONS 12 & 44) • GENERIC EXEMPTIONS • SPECIFIC EXEMPTIONS • GENERIC EXEMPTIONS CONSIDERED OR BEING CONSIDERED - EXPERIENCE REQUIREMENTS OF REPRESENTATIVES.

  31. 7. EXEMPTIONS (SECTIONS 12 & 44) (CONTINUED) - REQUIREMENTS FOR THE APPOINTMENT OF AN AUDITOR (SECTION 19) AND FIDELITY INSURANCE (SECTION 13 OF GENERAL CODE OF CONDUCT). - FIT AND PROPER REQUIREMENTS FOR ADMINISTRATIVE AND DISCRETIONARY FSP’S WITH REGARD TO QUALIFICATIONS AND EXPERIENCE.

  32. 8. CODES OF CONDUCT (SECTION 15) • GENERAL CODE OF CONDUCT (SECTION 15(1); • SPECIFIC CODES OF CONDUCT (SECTION 15(2) • ADMINISTRATIVE FSP’S; • DISCRETIONARY FSP’S;

  33. 8. CODES OF CONDUCT (SECTION 15) (CONTINUED) • BANK DEPOSITS NOT EXCEEDING A PERIOD OF 12 MONTHS (SECTION 15(2)(B); • PERSONS ENGAGED IN FOREIGN CURRENCY TRANSACTIONS;

  34. 9. OFFICE OF OMBUD FOR FSP’S (SECTIONS 20 – 31) • APPOINTMENT OF OMBUD FOR FSP’S; • ESTABLISHMENT OF OFFICE OF OMBUD; • RULES OF FAIS OMBUD (SECTION 26); • PROMOTION OF AWARENESS (SECTION 32); • FULL OPERATION OF OFFICE

  35. 10. REGULATIONS (SECTION 35) • PROMULGATED (13 JUNE 2003) • DEFINITIONS • MATTERS REQUIRED OR PERMITTED BY ACT TO BE PRESCRIBED - PERIOD CONTEMPLATED IN SECTION 45(2(B) OF ACT;

  36. REGULATIONS (SECTION 35)(CONTINUED) • PROHIBITIONS ON CANVASSING FOR, AND MARKETING OR ADVERTISING OF UNAUTHORISED FINANCIAL SERVICES (SECTION 35(1)(B) OF ACT) • COMPLIANCE ARRANGEMENTS - APPLICATION FOR APPROVAL; - ESTABLISHMENT OF COMPLIANCE FUNCTION

  37. REGULATIONS (SECTION 35)(CONTINUED) • MATTERS RELATING TO ADMINISTRATIVE AND DISCRETIONARY FSP’S (SECTION 35(1)(D) AND (E) OF THE ACT - NOMINEE COMPANIES OF DISCRETIONARY FSP’s; - INDEPENDENT NOMINEES OF ADMINISTRATIVE FSP’S;

  38. REGULATIONS (SECTION 35)(CONTINUED) - WRITTEN AGREEMENT WITH INDEPENDENT NOMINEE; - REQUIREMENTS FOR INDEPENDENT NOMINEE; - DUTIES OF INDEPENDENT NOMINEE;; - ENFORCING COURT ORDERS;

  39. REGULATIONS (SECTION 35)(CONTINUED) - CONSTRUCTION OF CERTAIN REFERENCES; - PENALTIES; - POWERS OF REGISTRAR TO CALL FOR INFORMATION. • PLANNED ADDITIONS TO REGULATIONS - RECOGNITION OF FOREIGN BROKING ENTITIES

  40. 11. DETERMINATION OF SECTION 7 DATE • SIGNIFICANCE OF SECTION 7 DATE; • RECOMMENDATIONS TO MINISTER ON POSSIBLE DATE; • CONSIDERATION OF INCENTIVES

  41. 12. PUBLICATIONS IN GAZETTE • DELEGATION OF POWERS TO RECOGNISED BODIES; • FEES; • REGULATIONS; • CODES OF CONDUCT FOR ADMINISTRATIVE AND DISCRETIONARY FSP’S (8/8/2003)

  42. 12. PUBLICATIONS IN GAZETTE (CONTINUED) • GENERAL CODE OF CONDUCT FOR AUTHORISED FSP’S AND REPRESENTATIVES (8/8/2003); • RULES ON PROCEEDINGS OF THE OFFICE OF THE OMBUD FOR FSP’S (8/8/2003);

  43. 12. PUBLICATIONS IN GAZETTE (CONTINUED) • DETERMINATION OF REQUIREMENTS FOR REAPPOINTMENT OF DEBARRED REPRESENTATIVES (8/8/2003); • QUALIFICATIONS AND EXPERIENCE OF COMPLIANCE OFFICERS IN RESPECT OF FINANCIAL SERVICES BUSINESS (8/8/2003);

  44. 12. PUBLICATIONS IN GAZETTE (CONTINUED) • DETERMINATION OF CRITERIA AND GUIDELINES FOR THE APPROVAL OF COMPLIANCE OFFICERS (8/8/2003);

  45. 13. DOCUMENTS CURRENTLY BEING CONSIDERED • FIT AND PROPER REQUIREMENTS (SECTION 8); • FSP APPLICATION FORM; • SPECIFIC CODE OF CONDUCT FOR AUTHORISED FSP’S AND REPRESENTATIVES CONDUCTING SHORT-TERM DEPOSIT-TAKING BUSINESS

  46. DOCUMENTS CURRENTLY BEING CONSIDERED(CONTINUED) • CODE OF CONDUCT FOR AUTHORISED FSP’S AND THEIR REPRESENTATIVES, INVOLVED IN FOREIGN EXCHANGE (“FOREX”)

  47. QUESTIONS?

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