A number of readers approached us regarding the consequences of not passing the level 1 REs by the required date. Many are of the opinion that they can carry on as usual until such time as the FSB sends them a letter to advise them of the Regulator’s intention to suspend their licence.
According to the regulations, you are obliged to notify the registrar in writing within 15 days of a change in any fit & proper status. This includes not having passed the RE by the required date.
In essence, this means that those who failed to write the RE at least once before the 30/6/2012 deadline are in breach of this requirement. If they continued to practice after this date, they were actually in contravention of the Act, and could have their licences withdrawn.
We saw the first steps being taken by the FSB in January this year against those who failed to make the June 2012 deadline. To the best of our knowledge, they received the “Intention to Suspend” letter, which gives them two months in which to rectify the situation, six months after the event. Whether this creates a precedent as far as those are concerned who failed to make the 31 March deadline, remains to be seen. We trust that the FSB will clarify this matter sooner, rather than later.
Space does not allow us to advise on all the possible permutations, but we suggest you seek expert advice if not sure. What happens, for instance, where a sole proprietor has only passed one of the two exams they are obliged to write, or where the FSP is a legal entity, consisting of only one person?
Some steps to be taken to rectify the situation include:
- Obviously, passing of the required exams as soon as possible.
- Informing the FSB of your failure to pass the RE
- Asking for a further extension in view of the fact that you made several attempts. Whether this will be granted, is not for us to speculate, but it may just buy you some more time.
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