FSB Circular 10 of 2012, provided figures on the number of FSPs who did not attempt to write the exams before 30 June 2012.
The total number of candidates who did not write before this date:
• Key Individuals 2 592 (15,82%)
• Representatives 6 398 (5%)
According to the circular, the Registrar will now commence with regulatory action against them. The nature of such action is not indicated.
Whilst the common assumption is that these people were either defiant, or had decided to leave the industry, it is not the total picture.
To this day, we get enquiries from FSPs who appear totally oblivious of the requirement to write these exams. A classic received recently read: “Hi Guys. I hear there are exams to be written. Which one do you recommend I do – RE1or RE5?”
An interesting development stems from the proposed action by the FSB. There is an obligation on product providers not to accept business from FSPs who are not regarded as being fit and proper. Up to now, these individuals were not listed, hence it was not possible for product houses to identify them.
We saw the so-called DOFA (date of first appointment) letters at the end of June, addressed to people whose records at the FSB indicated that they had not written the exams by that date. From this, one can assume that the purported transgressors, mentioned above, will be given an opportunity to state their case, after which action will be taken.
Our view is that key individuals will be debarred by the FSB. The same fate will have to be applied to representatives by their key individuals.