The Registrar of the Financial Services Board (FSB) intends to amend the current fit and proper requirements applicable to financial services providers (FSPs), key individuals and representatives. The Registrar intends on doing so by revoking the Determination of Fit and Proper requirements for FSPs 2008, as well as the Notice on Determination of Qualifying Criteria and Qualifications for FSPs, number 1 of 2008.
In December 2015, the Registrar released the first publication of the proposed amendments to the fit and proper requirements and stakeholders were invited to submit comments. The Registrar has considered the comments and incorporated them where appropriate into the revised draft of the fit and proper requirements. The objective is to build onto the existing competency requirements by establishing a framework which will ensure that FSPs have the required product related knowledge, meet the appropriate standards of professionalism and undergo continuous professional development. The review process has now been completed and the revised draft is now available for comment. Interested parties can submit their written submissions on the proposed amendments to FAIS.Consultation@fsb.co.za by 15 December 2016.
The amendments which will bring significant changes are highlighted below:
- Proposed definitions
The amendments will define the concepts relevant to the proposed new competency requirements.
- Honesty, Integrity and Good Standing
The Registrar has clarified that the honesty and integrity of a person who is not a natural person, must be demonstrated through its corporate culture as well as the personal behaviour of its directors and key individuals.
- Competency and CPD Requirements
There are significant changes proposed to the competency requirements. Amongst others, there are changes to the product related knowledge and CPD requirements. There are also amendments to the competency requirements that are proportionate and fit for purpose.
There will be alignment with education, training and development practices and standards where the proposed competency requirements have been aligned with the standards of the South African Qualifications Authority (SAQA).
- Operational Ability
Additional requirements proposed relate to governance, outsourcing of functions to person other than representatives, the appointment of representatives and automated advice, of which a definition will be provided.
- Financial Soundness Requirements
The proposed amendments look to extend the solvency requirements to juristic representatives of Category I FSPs.
- Transitional Arrangements
The amendments will provide transitional arrangements to accommodate the proposed competency requirements.