New Proposals affecting Compliance Officers

Two new draft Board Notices were published by the FSB last week.

The first aims to provide clarity on what will be required of current Compliance Officers in terms of regulatory exams, while the second addresses the matter as it relates to Compliance Officers under supervision.

Notice on Qualifications, Experience and Criteria for Approval as Compliance Officer

The Registrar is of the view that a compliance officer must have a demonstrable knowledge and an understanding of Financial Advisory and Intermediary Services Act, 2002. The intention is that, in future, a compliance officer must successfully complete the first level regulatory examination applicable to the Category of FSP in respect of which he or she renders compliance services.

In practice, this means that a CO of a

  • Cat I or IV FSP must complete the RE 1
  • a Cat II or IIA FSP must complete RE 1 and RE 3 and
  • a Cat III FSP must complete RE 1 and RE 4.

Approved compliance officers will have six months after commencement of the proposed amendments to successfully complete the applicable regulatory examinations.

It appears that this requirement will replace the proposed CO regulatory exam. The FSB notes:

The Registrar is of the view that the FSB is not the best suited to develop an examination to test that type of knowledge and understanding. However, it remains the intention to ensure that compliance officers are competent to perform a compliance function. That will be achieved through implementing a new competency framework for compliance officers that are currently under development by the FSB.

A further proposal is the removal of the current condition of the Phase 1 approval which stipulates that the approval, granted to an individual referred to in paragraph 2(2)(a) of the Notice, lapses after twenty four months of the date of approval unless such individual reapplies for approval before the expiry of the twenty four months. The Registrar has decided to delete the provision in order to remove the administrative burden on those individuals as the same outcome can be achieved through other less burdensome measures.

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