Secondary

Update on level II REs and CPD

The initial idea was for the Level II REs to focus more on product knowledge, with CPD kicking in afterwards to ensure you stay up to date with developments in your chosen fields of expertise.

The Retail Distribution Review (RDR) proposals already provide a good indication of where we are heading. There is talk of generic as well as provider specific product knowledge. By way of example: if you are licensed for short-term personal lines, you will be required to show that you understand the basic principles of short-term insurance. In addition, Insurer A, with whom you are contracted, will be required to ensure that you understand the material aspects of their specific products.

This accreditation will not be conducted in the style currently in place – it will have to be done under strict exam conditions similar to what is currently in place for the Level I REs.

FSB research

The FSB considered the South African Revenue Services (SARS) competency model for tax practitioners which requires them to be registered with SARS. This registration is subject to the tax practitioner being a member of a “recognized controlling body”, where the membership criteria requires the tax practitioner to meet and maintain at least the minimum competency standard as prescribed by SARS.

Recognised controlling bodies registered with SARS must comply with very specific criteria, including minimum qualifications and experience requirements, continuous professional education requirements, a code of ethics and conduct and disciplinary codes and procedures.

The FSB then held discussions with a number of professional bodies and associations in the financial services industry to obtain a better understanding of the role that these bodies can play in relation to industry competency standards. Discussions included the viability of the tax practitioner model in the financial services context.

It was recognised that the financial services industry includes various sub-sectors which makes the implementation of one standard competency model impossible. However, the principles applicable to competency standards can be applied across all sectors as long as it is relevant to the context of the affected persons.

The FSB also engaged with the South African Qualification Authority (SAQA) to ensure that its requirements are considered, where appropriate, when drafting a competency model.

Research was also conducted overseas with various regulatory bodies regarding international competency standards and requirements, and the various competency models employed there.

Going forward

Subject matter experts were selected by the Registrar in the establishment of a small workgroup to assist the FSB in reviewing the competency requirements for the future context. The aim is to draft a competency model which incorporates the local and international best practice principles and which will assist in achieving the market conduct outcomes in the future financial services context.

Regular industry updates will be provided as the competency model for both the current and future requirements gains substance, and stakeholders will be invited to provide input in order to finalise the model. The FSB also intends conducting an impact assessment prior to implementation to ensure that the new model will achieve what it is intended to do.

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