Secondary

legislation

FAIS clearly unclear about intermediary services

The Free market Foundation recently published an article on a matter which has certainly been a major bugbear since the introduction of the FAIS Act.

When does a person have to register for an intermediary service, and when not?

Gary Moore, senior legal researcher at the Free Market Foundation writes:

“A person who provides advice or intermediary services without being licensed could be fined up to R10 million or imprisoned for up to ten years, or both.”

“Some advice is expressly excluded from advice requiring a licence (providing mere factual information about how to enter a transaction regarding a financial product, objective product information, and reports about a financial product without recommending any transaction as appropriate).”

“However, no service is expressly excluded from an “intermediary service” which requires a Fais licence.”

This confusion led to many FSPs actually appointing their clerical staff as representatives to avoid the threat of a massive fine.

Moore then goes on to discuss a Supreme Court of Appeal ruling in 2013 on the matter.

Please click here to read the full article. (3 minutes reading time required).

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