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Overview and preparation techniques. Presented by the Inspired Learning Regulatory Academy. Minimum license requirements. Competency Product Category ,minimum experience, academic qualifications, Conditions. Operational Ability
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Overview and preparation techniques Presented by the Inspired Learning Regulatory Academy
Minimum license requirements • Competency • Product Category ,minimum experience, academic qualifications, Conditions • Operational Ability • Business address, communication facilities, bank account, money laundering controls, • Sound financial security • No unrehabilitated insolvent • Assets exceed liabilities Fit and Proper • Honesty and Integrity • Good character and integrity • Found guilty, fined , prohibited Court of Law or civil matter etc
Use of license • Displayed in prominent and durable manner • Reference in all business documentation, advertisements, promotional material • Not use license when withdrawn or suspended • Immediately or within reasonable time available Outcome 16
Compliance provisions within FSP • Effectively employ resources, procedures and appropriate technological systems • Structure internal control procedures to ensure business carried on in orderly and efficient manner • Control Measures • Specific Control Measures • Insurance • Advertising • May not contain statement, promise or forecast which is fraudulent, untrue or misleading • Have suitable guarantees or professional indemnity Outcome 43
Appointment of compliance officer No one can act as rep unless He has employment or mandate agreement with FSP Outcome 43
Role / function of compliance officer Source: Board Notice 127 Outcome 43
Role / function of compliance officer Source: FAIS Act Section 17 • FSP must establish and maintain procedures to be followed by provider and Reps to ensure compliance • CO must submit reports to registrar in manner and in matters determined by registrar • Provisions also apply to FSP who has 1 key individual or without a representative Outcome 43
Functions of compliance officer Source: Section 17 of FAIS Act and www.fsa.gov • The CO is required to supervise the compliance function. This CO must ensure requirements of FAIS met through procedures which the FSP (key individual) must establish. These may be: • Examination of the compliance function at the time of license application; • Direct examination of the compliance function as part of the general on-site inspections of the FSP • Direct examination of the internal policies and operational procedures and controls • Periodic assessment which should be filed with the regulators for review • Revising and re-examination of the compliance function where issues had previously been identified with the FSP about the operation of the function. Outcome 43
Undesirable business practice Source: Section 34 of FAIS Act • Harming relationships • If practice continues objectives of Act will be defeated • Unreasonably prejudicing client Practice directly or indirectly • Unfairly effecting any client • Deceiving any client Outcome 13
Registrar publishes undesirable notice Outcome 14
License suspension • Registrar may suspend or withdraw license at any time if • Licensee no longer meets fit and proper requirements • Licensee did not make full disclosure on license application form • Failed to comply with other provisions of FAIS • Is liable to pay levy or administrative sanction Outcome 17
License withdrawal • Registrar must make known the reasons for the suspension or withdrawal and any terms attached thereto by notice in the Gazette • Provisionally suspend or withdraw a licence. Grounds therefore and period and terms of suspension • Make known the suspension or withdrawal in the Gazette • Give licensee reasonable time to respond Outcome 17
Recourse for license suspension Source: FAIS Act Section 9 The Registrar must consider a response received from the licensee and may decide to: • Lift the provisional suspension or withdrawal • Make it final The licensee must be advised accordingly and notification must happen in the Gazette and other media if necessary. If a license is suspended or withdrawn, the licensee is not authorised to act as a FSP. Outcome 18
Lapsing of a license • Licensee becomes permanently disabled • Finally sequestrated • Dies • Finally liquidated or dissolved • License becomes dormant • Licensee voluntarily and finally surrenders license to Registrar • Advise registrar in writing Outcome 19
Lapsing vs suspension/ withdrawals Source: FAIS Act Section 11 • Lapsing of a license is the result of factors other than non-compliance: • Lapsing of the license is initiated by the FSP, following an event that gave rise it • There are no provisions in the Act to reinstate a lapsed license. • There are no requirements for debarment on lapsing of a license • There are no implications from other legislation when a license is lapsed • Suspension or withdrawal of a license is the result of non-compliance with the requirements of the FAIS Act: • Originates as a result of FSP actions or omissions • FSB may allow reinstatement of suspended or withdrawn licenses under certain conditions • After suspension or withdrawal a FSP will be debarred to apply for a new license. • There are implications for FSP’s registered under the Medical Schemes Act as the FSP will loose the accreditation if the license is suspended • when a license is lapsed Outcome 20
Reinstatement of license Source: FAIS Act Section 11 1. There are no provision in the Act to reinstate a lapsed license. A new application must be submitted . But this can only happen if that entity has not been permanently disbarred from receiving a license for that product category 2. The Registrar can reinstate a suspended license once all the conditions have been met 3. The Registrar may impose conditions if a suspension or withdrawal is lifted. These conditions may include certain actions by the FSP in relation to its business Outcome 21
reinstatement of authorisation imposed The Registrar must consider a response received from the licensee and may decide to: • Lift the provisional suspension or withdrawal • Make it final • Withdrawn license cannot be reinstated • Registrar can reinstate withdrawn license once conditions met • Registrar can impose conditions is suspension lifted Outcome 22
Determinations by Ombud • Registrar informs licensee of intention to suspend and gives reasonable time for submission • Inform licensee of intended period and terms of suspension • Prohibition on concluding new business from date of suspension • For unconcluded business determine measures for protection in interests of clients of licensee • Terms for lifting of the suspension • Registrar must consider any response received and may suspend or withdraw license thereafter or not to and must notify licensee Outcome 23
Complaints Source: Section 16 of FAIS Act Outcome 33
Complaints continued Source: Section 17 of FAIS Act • FSP must have internal complaint resolution system and procedures • Maintain comprehensive policy and have systems / procedures for resolution • Clients must have full knowledge or resolution procedures • Access to facilities such as branch or electronic / postal means • Resolution to be fair to both client and provider Outcome 33
Complaints continued again Source: Section 19 of FAIS Act Outcome 33
Role and powers of Ombud Source: FAIS Act Sections 20 to 32 Outcome 23
Receipt of complaints by Ombud • Ombud cannot proceed to investigate unless • Has informed other parties in writing • Is satisfied all parties have particulars of claim • All parties have had time to respond • In determining officially received complaint follow and implement any procedure • Allow any party right of legal representation • Explore any reasonable prospect of resolving complaint by settlement • May resolve complaint by conciliation , make recommendation
Determinations by Ombud Source: FAIS Act Sections 20 to 32 • Dismiss complaint or uphold complaint • Make award of fair compensation to complainant • Monetary award payable may bear interest • Determination reduced to writing with all reasons • Copies to registrar and all parties concerned • May lodge appeal and appeal goes to clerk or registrar of court for determination Outcome 23
Role powers and duties of registrar Outcome 14
Penalties • Contravention and failure to comply • Misleading, false or deceptive statement • Conceals material fact • Guilty of offence, on conviction to fine not exceeding R 1 million • Or imprisonment not exceeding • 10 years or both Outcome 14