Secondary

Author Archive | Alan Holton

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Fairness in Debarment Procedures

In a recent (5 October 2018) matter heard before the Financial Services Tribunal, the applicant, Ms X, applied for a reconsideration of a decision taken by the respondent, Y (the FSP). The FSP had taken the decision to debar the applicant based on the recommendation of the chairperson who presided at the debarment hearing. The […]

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finance

Financial Soundness of Representatives

The new Determination of Fit and Proper Requirements for Financial Services Providers, 2017 (Board Notice 194 of 2017) sets out a number of new requirements relating to the financial soundness requirement of representatives. Natural Persons The financial soundness requirements set out in Chapter 6 of the Board Notice do not apply to any representative who […]

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cpd

CPD Important considerations before you proceed

In a nutshell In terms of Section 32 of Board Notice 194 of 2017 (Determination of Fit and Proper Requirements for Financial Services Providers, 2017), every sole proprietor, key individual and representative must comply with the minimum Continuous Professional Development (CPD) requirements set out in Sections 31 to 34 of the Board Notice (see link […]

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liability-insurance

Professional Indemnity Insurance and exclusions

A recent decision of the High Court in Bloemfontein where an FSP was found to have been negligent in advising a client to invest in the Sharemax scheme, is a “must read” for all FSPs. Clear and explicit, the judgement sets out unequivocally just what the duties and responsibilities of a financial advisor comprise. There […]

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warning

New steps to curb Churning

The Retail Distribution Review (RDR) of 2014 contained several comments that expressed concern about the negative effects of “churning” which it described as “inappropriate or unnecessary replacement of policies driven by intermediary incentives”. For example, Proposal NN contains the observation that “Analysis of the current distribution landscape has pointed to concerns about up-front commission on […]

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Appeal-Board

FSB Appeal Board Clarifies Factual Causation

The recent Appeal Board Determination in the matter of J&G Financial Service Assurance Brokers (Pty) Ltd and R L Prigge is an important Determination for a number of reasons. Mention has already been made in this publication of a number of the comments and criticisms made by the Chairman of the Appeal Board (Moonstone Investment […]

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insurance

Notes on the Insurance Bill

The Insurance Bill in its probable final form has now been published. The Bill deals essentially in prudential matters as these apply to insurers. However, there are a number of amendments to existing legislation proposed in the Bill that will be of interest to intermediaries. Fees other than commission S 8(5) of the STIA currently […]

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reminder

Important FICA Reminder for Motor Dealers

Motor dealers are reminded that if they receive a cash payment from a customer of more than R24 999,99 – and here cash means coins, banknotes or travellers cheques – that this must be reported to the Financial Intelligence Centre on each occasion. S 28(b) of the FIC Act, 2001 provides that a reporting institution must, […]

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finance

Financial Soundness – at all times

At a recent meeting between senior officials of the FAIS Division of the FSB and a committee of industry members, Ms Lorraine van Deventer expressed the concern that many FSPs still do not fully appreciate the financial soundness requirements that were imposed in the Fit and Proper Requirements contained in Board Notice 106 of 2008. In […]

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