Secondary

FSB Acts Against RE Dodgers

The title of this article reminds me of a Dickens character. From immediate reactions we received, it appears that not all those who missed the June deadline are artful dodgers. Some simply expected a further reprieve, others were fast asleep.

These letters, however, will come as a rude awakening. It is the first step in the process leading up to suspension, followed by withdrawal of their licences.

The “Notification of Intention to Suspend Authorisation” (NISA) letter, of which we obtained a copy, is dated 5 December 2012. The receiver has until 31 January 2013 “…to respond to this letter and to provide reasons to the Registrar as to why the intended suspension should not be effected and/or reasons why the period and terms of the suspension should be changed.” Failure to respond will result in the FSB proceeding with the suspension, followed by withdrawal after a further two months.

Ironically, the person who received this letter passed the RE5 exam before June 2012, but failed to write the RE1 by this deadline. He has subsequently written twice, but after 30 June, hence the letter. It thus appears that the FSB is very strict about applying its ruling, irrespective of whether any subsequent attempts were made post June 2012 / prior March 2013.

A compliance officer in Pretoria copied us in her correspondence to the FSB regarding one of her clients who had in fact written before the deadline, and apparently received the NISA letter in error. We promptly sent confirmation of our uploading of the candidate’s information to assist the Regulator in verifying the facts.

Please remember that, if you registered, but did not actually go and write, it is deemed as not having written.

When such suspension is implemented, the following conditions apply:

  • The licensee is prohibited to conclude any new business as envisaged by the Act with immediate effect;
  • The licensee must inform all affected clients and product suppliers concerned that his/her authorisation to act as a financial services provider has been suspended, and the Registrar must be copied with such correspondence; and
  • The licensee must, in consultation with clients and product suppliers concerned, take reasonable steps to ensure that any outstanding business is transferred to another authorised financial services provider in the best interest of clients, and the Registrar must be advised accordingly;

In order to have the suspension lifted, such affected persons must successfully complete the required regulatory exams, and submit a copy of their results to the FSB within the two-month suspension period.

What happens if you fail the exams in this period?

“Should the Registrar’s ultimate decision be to suspend your authorisation and you fail to successfully complete the relevant first level regulatory examination as contemplated in section 10 of the Determination prior to 31 March 2013, the Registrar will proceed with the withdrawal of you authorisation. This letter should therefore also be regarded as notification by the Registrar of his intention to withdraw your authorisation for the grounds referred to above.”

We suggest you write your “Please Sir, can I have some more…” letter to the FSB at your earliest convenience, and get on with preparing for the exam. It really is the right thing to do.

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