Secondary

RE

New Fit and Proper Regulations and the Regulatory Exams

The long anticipated amended “Determination of Fit and Proper Requirements for Financial Services Providers, 2017” was finally printed in December last year.

The following requirements are applicable in terms of the regulatory examinations:

The competence requirements relating to regulatory examinations contained in this Part –

(a) subject to paragraph (b), apply to all FSPs, key individuals and representatives;
(b) do not apply to –
(i) a Category I FSP, its key individuals and representatives that are authorised, approved or appointed only to render financial services or manage or oversee financial services in respect of the financial products: Long-term Insurance subcategory A and/or Friendly Society Benefits; and
(ii) a representative of a Category I FSP that is appointed only to –
(aa) perform the execution of sales in respect of a Tier 1 financial product provided that the requirements in section 22(b)(ii) are complied with; and/or
(bb) render financial services in respect of a Tier 2 financial product.

The amended determination comes into effect on 1 April 2018, with the following exceptions:

Section in Notice Effective Date
Section 13(3) – FSP recording obligations and (5) – establishment of a competence register. 1 May 2018
Section 29(1)(a) – Class of Business training 1 August 2018
Section 29(1)(b) – Product Specific training 1 May 2018
Section 29(2) – KI class of business training 1 August 2018
Section 31 – 34 – Continuous Professional development 1 June 2018
Section 38 – Automated advice requirements 1 May 2018
Sections 44(1) and (2): 45: 48 and 49 -Financial soundness, but only insofar as it relates to a juristic representative 1 March 2019

Regulatory Exam Study Material

The amended requirements will have a substantial impact on the content of the study material for the REs.

The FSB plans to provide more specific guidance on the impact of the changes to the Fit and Proper Requirements, and specifically on the deadline by when the amended requirements are to be incorporated in the regulatory exam questions.

Candidates who are currently preparing to write the exams should consider the possible implications of such changes, and endeavour to write the exams before it becomes effective.

Candidates are advised to carefully consider the above and to only write the REs once they are absolutely ready.

Click here for a copy of the Determination of Fit and Proper Requirements for Financial Services Providers, 2017

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