Failure to write the REs within the stipulated time frames calls for action on the part of those affected. The following guidelines were published by the FSB to assist FSPs in conforming to requirements:
- Guideline on Section 14 (A) debarment process
- Penalties for late notification of debarments
- Reappointment of debarred reps
This article is only concerned with debarment as a result of a representative, key individual or sole proprietor no longer being considered fit and proper due to failure to comply with the requirement to complete the prescribed regulatory exam by a specified date.
A very important consideration in this regard is the date of appointment of the individual concerned. Board Notices 104 and 106 both indicate that newly appointed representatives have two years from date of first appointment to complete the level 1 REs, but BN 104 goes further. It states that a person working under supervision has until 31 December of the year in which this period of grace falls. By way of example: a rep appointed on 1 February 2010 has until December 2012 to write the level 1 exam, provided such a rep is working under supervision.
Furthermore, the fact that a newly appointed rep has to write the level 1 RE within two years of first appointment in the industry means, by implication, that such a person does not yet satisfy this fit and proper requirement, and should, by default, be working under supervision.
The guidelines linked above state that a key individual, and by default, a sole proprietor, is appointed by the Regulator, and can therefore only be debarred by the Regulator. Given the time lines involved, this is actually a possible life line for those who have not yet written the level 1 REs. The sooner you write the exams, the less time you will have to spend in the wilderness trying to get back in business.
Add to this the onerous obligation of advising all your clients that your licence has been suspended, with the implicit reputational damage, and it may just be in your own interest to get it done sooner, rather than later.