The FAIS Supervision Department conducted a training intervention in 2014 for Category I FSPs who are not obliged to employ the services of a compliance officer. This continued during 2015 and 2016.
During 2014 and 2015 a total of 99 FSPs were visited and an additional 60 FSPs were visited during 2016. The rationale for selecting this category of FSPs was to provide guidance where required in respect of compliance with the FAIS Act and other subordinate legislation.
Interactive workshops were hosted at the FSB during February 2016 and 3 March 2017, with third workshop on 10 March 2017.
The most common trends identified during the onsite visits related to either non-compliance or partial compliance with the following:
- Risk management;
- Agreements with product suppliers;
- Suitability analysis & record of advice;
- Conflict of interest management;
- Professional indemnity cover;
- Complaints handling processes;
- Competency requirements, i.e. regulatory examinations and/or qualifications; and
- Non-submission of annual compliance reports and/or financial statements.
As at 15 January 2017, a total of thirteen FSPs did not comply with the FAIS legislation, despite additional assistance being provided after the onsite visit. Regulatory action was taken against these FSPs with six currently under suspension and seven FSPs’ having their authorisations withdrawn.
The analysis further revealed that a total of 92% of issues initially raised at the onsite visits were resolved.