The May edition of the FSCA FAIS Newsletter contains a summary of events since the publication of Board Notice 194 of 2017 (the “Fit and Proper” Board Notice) which came into effect on 1 April 2018 and impacted on the RE 1 and RE 5 regulatory exams.
The “Fit and Proper” Board Notice contains amended qualifying criteria for these two exams, resulting in amendments to both the exams as well as the study and preparation material.
Updated Study Material
There are two sets of material which can be used for preparation purposes:
- The Preparation Guide for RE1 and RE5 which is available at https://www.fsca.co.za/Regulated Entities/Pages/LR-FAIS-Amendments.aspx and
- The legislation itself. The Preparation Guide refers to the relevant sections in the Act and subordinate legislation that must be studied.
The Preparation Guides are invaluable as they stipulate the content of the exams, in that they seek to explain what the examination questions will be testing. All examination questions are based on the content as set out in these Preparation Guides. In addition to the above, the Preparation Guides map out exactly where a candidate can find the relevant information in the legislation. The format that is used to provide this information is as follows:
|TASK||QUALIFYING CRITERIA||REFERENCE / MOTIVATION|
|The task describes what the candidate must be able to do in respect of the legislation.||The qualifying criteria refer to the knowledge that a person must have to perform the task in column 1.||In this column the reference to the actual legislation is provided – if you read the particular section of the legislation, then you will have the required knowledge as referred to in column 2.|
Every question in the question bank for all the regulatory examinations is based on the “qualifying criteria” (or the knowledge column) as explained above. The questions MUST be linked to these knowledge criteria otherwise it may not be included in the examination as an examination question.
It is important to read the actual legislation. One cannot expect to be tested on legislation without having read the legislation. By reading the legislation you will get used to the definitions, terminology and the manner in which the legislation is drafted. Please be advised that the same terminology and approach is used in the examination questions. The questions must be technically correct in that the correct legislative terms must be used at all times. Reading the legislation will help you to interpret the questions correctly.
The FSCA does not endorse any training manuals as it has made available the tools needed to assist candidates to prepare for the examinations. Not all training manuals are alike as their authors are not legislative experts, or may have interpreted legislation incorrectly, or might not have covered all the information that will be covered in the examination (i.e. not all the qualifying criteria are covered in the training manual).
Complaints received by the FSCA in respect of the regulatory examinations include:
- The examination included questions that were not covered in my training manual;
- The questions in the examination did not resemble the questions in the mock exams;
- I obtained 100% for every mock examination, but when I wrote the regulatory examination I failed – there must be something wrong with the examination;
- I know the training manual off by heart, but I still fail the regulatory examination.
In each of these examples, the candidate does not question whether the training manual is complete or accurate, and whether the mock examination questions were accurate and reasonably in line with the real/ actual examination questions. Candidates conclude that the training manual and all the mock questions are correct, and therefore it is the regulatory examination that is problematic.
It is therefore very important that all FSPs, key individuals and representatives satisfy themselves that the training provider they use has the required skills and expertise, that the training material that is provided is 100% accurate and complete (in line with the content provided in the FSCA Preparation Guide) and that the mock questions are not sub-standard.
Queries related to the exams can be addressed to the two examination bodies or alternatively to FAIS.Exams@fsca.co.za.