The last week of May 2019 will be remembered for three things by South Africans. Firstly the rush and urgency by FSPs, key individuals and representatives to ensure that they were compliant with the CPD requirements, secondly the bad start to the Cricket World Cup by the Proteas and thirdly, the FSCA’s two month exemption from CPD requirements.
Unfortunately, the latter did not apply to the Proteas. The light at the end of the tunnel appears to be a train heading their way.
True to form, many players in the industry only awoke to the reality of CPD requirements as the deadline drew near, leading to frantic efforts to comply at the last minute. This is in total contrast to the rationale for CPD, which we expand upon hereunder.
On 5 June 2019 the FSCA published FSCA Communication 2 of 2019 to provide further guidance to FSPs, key individuals and representatives regarding compliance with the continuous professional development requirements. The document also provided the rationale for the extension which received some criticism from sectors in the industry.
In response to the question “Why was the CPD deadline of 31 May 2019 extended?”, the FSCA notes that feedback received from the financial services industry indicated that there was confusion regarding the manner of accumulation of CPD hours as well as sources of CPD training that complied with the requirements.
“This is the first year of implementation and past experience has shown us that there is often a high level of non-compliance in the first period. Due to the fact that the consequences for non-compliance are either removal from the register and thus an inability to earn an income, or debarment which could result in job losses, the FSCA took the decision to mitigate this risk by affording an additional 2 months to comply with the CPD requirements.”
“It should be noted that this dispensation will not be repeated in future. FSP, key individuals and representatives must ensure that in the next CPD cycle the proper policies, procedures and processes are in place to comply with the deadline of 31 May 2020.”
Unpacking FSCA communication 2 of 2019
Besides again providing a background and introduction to the basics of CPD, it also shares the purpose and how CPD should be addressed.
CPD must be planned, implemented, maintained and monitored by the FSP on an on-going basis to ensure that it –
|●||maintains existing knowledge and skills appropriate to the activities and responsibilities of affected persons;|
|●||updates knowledge and skills on a continuous basis; and|
|●||acquires new knowledge and skills to assist with their current activities and responsibilities/functions contemplated in the future.|
This can only be achieved if CPD is implemented in a structured manner where the FSP has clear training and development plans in place for each CPD cycle. The principle is that the training and development that takes place in respect of CPD must be targeted, and must address any competence gaps that were identified, and/or develop additional knowledge and skills expertise where this was identified as a future need.
CPD should not just be a tick box exercise; it should be relevant to the function and role of the FSP, key individual and representative. CPD activities should further:
|●||contribute to your knowledge, skill, expertise, professional and ethical standards;|
|●||address any identified gaps in technical knowledge, generic knowledge, the context within which the financial services are rendered and knowledge of the applicable laws; and|
|●||take into consideration changes to internal/external conditions relevant to the financial service and financial products of the particular FSP, key individual and representative.|
Answers to questions
The communication also includes questions that were received from the financial services industry. The questions are divided into two sections. The first deals with questions surrounding the application of the CPD requirements. The second section deals with questions relating to non-compliance with the CPD requirements. We discuss this in the two articles below.
It is very clear that CPD requires a forward-looking approach. Whilst we still await clarity on the manner in which the Authority will require reporting, there is absolutely no uncertainty as to the requirement for detailed record keeping of all training interventions, including CPD.
The captain of the Proteas noted before the match against India that our national side is at its most dangerous when it has its back to the wall. The sad reality of that you are also not able to see the writing on the wall. To prevent this from happening to you, get your planning and monitoring actions in place as soon as possible.
Let’s hold thumbs that some of the minions at CWC pull off a few surprises and allow us to alter our game plan to at least get into the play-offs.
Click here to download FSCA Communication 2 of 2019.