Class of Business deadlines – Clarity from the FSCA

The amended Fit and Proper requirements of Board Notice 194 of 2017 determined various requirements that need to be implemented and complied with before specific deadline dates. Since the release of the original Board Notice, various other notices and amendments have been released that provided updates on this. One of these deadlines is the new Class of Business (COB) requirement that has an impact on FSPs, Key Individuals and Representatives.

Often, eagle-eyed subscribers assist us with clarification of issues raised in our newsletters. Thanks to Craig Ormrod who provided us with feedback from the FSCA on what is a rather complicated matter.

COB Training Deadlines

In terms of the Fit and Proper Requirements (BN 194 of 2017) the transitional arrangements regarding representatives were as follows:

Representative working under supervision before 1 April 2018 1 August 2019 BN 194 – section 52(12)
Representative (whether under supervision or not) appointed after 1 April 2018 but before 1 August 2018 1 August 2019 BN 194 – section 52(13)

On 6 August 2018 an exemption was published (FAIS Notice 52 of 2018) exempting new entrants (a person who has a date of first appointment of 1 August 2018 or thereafter and specific representatives as defined in that exemption) from having to do COB training. The exemption was only valid until 31 January 2019. This was required to allow the affected persons to be appointed as representatives working under supervision as the services under supervision exemption that was applicable at the time did not provide for COB. Please note that the exemption was not extended to representatives referred to in the Table above as they had until 1 August 2019 to comply with the COB requirements.

On 1 February 2019 the new Exemption of Services under Supervision (FSCA FAIS Notice 86 of 2018) came into effect. In terms of this Notice the transitional arrangements regarding representatives are as follows:

Representative working under supervision prior to 1 February 2019 1 February 2020 FSCA Notice 86 – section 4(3)
Representative working under supervision from 1 February 2019 onward 12 months from the date of first appointment FSCA Notice 86 – Condition 2(3)

It is important to note that the Services under Supervision exemption allowed persons already working under supervision (including the persons referred to in the first table) additional time to complete their COB training. This was done intentionally to accommodate the industry, especially given the comments received by the FSCA regarding the availability of COB training.

It is correct that a person appointed after 1 February 2019 only has 12 months to meet COB training requirements whilst representatives who were in the industry prior to that date may have had more time. Once again, this was done intentionally to accommodate persons already in the industry.

In light of the many variables which impact on an individual’s competence profile, Moonstone has developed a web-based application that provides FSPs with a practical solution to these challenges.

Click here for more information about Fit and Proper Manager.

It is also important to note that Moonstone Business School of Excellence (MBSE) is a duly accredited institution and provides training in all nine COB modules stipulated in the Act. Visit the MBSE website or visit the Event page for more detail.

Click here to download the relevant annexure from the Board Notice 194 of 2017 that describes all 9 Classes of Business.

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