The Financial Sector Conduct Authority published the consultation paper on 31 July 2018 to obtain public comment on the Exemption on Services under Supervision. The paper makes provision for representatives who do not meet all the competence requirements to work under supervision with certain conditions.
In this article we focus on the entry level requirements for the representative at the date of first appointment (the DOFA date) as representative of a financial services provider and the specific compliance periods to complete their competence requirements.
At the date of first appointment a representative of a Category I or IV FSP, must have a Grade 12 National Certificate or an equivalent qualification; unless the representative is appointed only to perform execution of sales or renders financial services in respect of Long-term Insurance subcategory A and /or Friendly Society Benefits.
A representative appointed to a Category II, IIA or III FSP must have a recognised qualification.
The paper makes provision for an exception in relation to what they call “specific representatives” of Category I FSPs. These are representatives who only have a date of appointment to render financial services in respect of a Tier 2 financial product or for execution of sales in respect of Tier 1 products. They are given additional time to work under supervision where they are appointed after this first DOFA date to provide financial services in respect of Tier 1 financial products.
Class of Business Training
Representatives other than specific representatives mentioned above, must complete their class of business training within six months from date of first appointment. The regulatory examination must be completed within two years from the reps DOFA date and they must complete the applicable qualification within six years.
A representative must comply with the CPD requirements from the date on which the representative meets the class of business training requirements, RE exam and qualifications requirements. This effectively means that they could only be liable for CPD in their 7th year.
A representative must work under supervision for at least the minimum experience periods applicable to the categories of the FSPs and financial product for which it is appointed to work under supervision but may not work under supervision for a period longer than six years from date of appointment.
While these are only proposals at this stage, we still advise you to review your supervision plan and agreement that you have in place for representatives under supervision and consider how it may be impacted.
To read the complete paper, click here.