The FSB published guidelines on the correct interpretation and application of section 13(1)(c) of the FAIS Act which states:
A person may not render financial services or contract in respect of financial services other than in the name of the financial services provider of which such person is a representative.”
One of the reasons given for the insertion of this particular section reads:
“…to prevent the undesirable business practice of “renting a licence”. It has come to the attention of the Registrar that juristic representatives are, increasingly, contracting in their own names with product suppliers for the distribution of the latter’s products without the FSP being aware of such contracts or with whom such contracts were concluded. The same ignorance applies when thereupon the representative contracts with clients not knowing that the representative actually acts on behalf of an FSP.”
We are busy studying the document and will comment in more detail in our next newsletter.
Moonstone Compliance clients will be fully informed on how this affects them.
We do offer a consultation service for others who may wish to obtain clarity on how it will impact on them.
The Guidance Note can be accessed here.