Practical Compliance Advice

The telematic broadcast on 7 March provided factual information about FAIS related matters, with a good smattering of practical advice from the two guests. The first session of the presentation, by Charene Nortier, covered the following topics:

  • The Disclosure of Fees and other potential Conflict of Interests on Third Party Collective Investment Scheme portfolios
  • Amendment of financial soundness requirements (BN 202 of 2012)
  • Financial Services Providers who operate Cash Management System Accounts
  • Bulk Client Transfers and re-signing of mandates
  • The exemption regarding audited financial statement requirements
  • Debarments and the late notifications of Section 14(1) Debarments
  • The requirement to obtain suitable guarantees, Professional Indemnity Cover and/or Fidelity Insurance as per Board Notice 123 of 2009.
  • Appointing a compliance officer

Ms Nortier was ably assisted by two practitioners from the industry who added a lot of value to the presentation with practical input.

We foresee a lot of the content covered becoming very important in the near future when people leave the industry. One section that I found particularly interesting concerned the termination of business. The panel discussed the different requirements when business is terminated by the client, the FSP or a representative of the FSP. One interesting point raised concerns the options available to the client.

Say for instance that you sold your business to another FSP, and you now advise all your clients in writing that the new “owner” of your business will be looking after them. There is no legal obligation on the client to accept this, which could of course impact on the buyer of your business.

They also touched on the “ownership” of a client. What happens when a representative introduces a client, and later resigns. Does the rep take the client with, does it stay with the FSP, or is it the client of the product provider?

If you would like a copy of this DVD, please click here for details. I believe with the strike in Johannesburg now resolved, normal delivery times will apply.

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