Board Notice 194 0f 2017, published by the Financial Services Board, now called the Financial Sector Conduct Authority (FSCA). introduced the long awaited new Fit and Proper Requirements for Financial Services Providers, Key Individuals and Representatives. All the changes start taking effect from 1 April 2018.
What are the new requirements?
Current and prospective representatives in the financial services industry will mainly be influenced by the following changes:
- Class of Business Training
- Product Specific Training
- Attainment of CPD credits
- Changes to the questions in the Regulatory Examinations
- Class of Business Training
Class of Business training refers to the generic training in respect of the various classes of business for which representatives are accredited to provide a service.
Class of business training becomes a requirement and will be operational on 1 August 2018, and representatives appointed on or after that date, must complete class of business training prior to the rendering on service in those classes of business.
Representatives appointed before 1 April 2018 are exempted from class of business training, but only in respect of products for which they were authorised before 1 April 2018. If they want to be appointed in new product categories, they will have to complete the class of business training in respect of those products. Representatives who are still acting under supervision on 1 April 2018, are not exempted and must complete class of business training within 12 months commencing from 1 August 2018.
2. Product specific training
This refers to training in respect of a particular financial product, including amendments thereto, This training must be assessed.
Product specific training becomes operational on 1 May 2018, and representatives appointed on or after this date, must complete product specific training prior to rendering financial services in those product categories.
Representatives appointed before 1 April 2018 are exempted from product specific training, but only in respect of, they will have to complete product specific training in respect of those. products for which they were authorised before 1 April 2018. If they want to be appointed in new product categories they will have to complete training in respect of those products.
Representatives who are still acting under supervision on 1 April 2018 are not exempted and must complete the product specific training within 3 months from 1 May 2018. Representatives appointed between 1 April and 30 April 2018 must complete product specific training within 3 months from 1 May 2018.
3. Continuous Professional Development (CPD
It is a requirement for a representative to maintain the required competence to render financial services in the product categories within which they operate.
The CPD requirement becomes effective from 1 June 2018 and for CPD, for FAIS accreditation purposes, to be acceptable it must have been accredited by a Professional Body. It can be provided by any provider as long as a Professional Body has awarded approved it and indicated the number of CPD credits to it. The Institute of Bankers in SA is a registered Professional Body with specific reference to the banking sector.
A CPD cycle runs for a period of 12 months commencing on 1 June every year and ending on 31 May of the following year. A representative who renders financial services within a single subclass within a single class of business, must complete 6 CPD hours per cycle. A representative who renders financial services within more than 1 subclass within a single class of business, must complete 12 CPD hours per cycle. A representative who renders financial services within multiple classes of business, must complete 18 CPD hours per cycle.
4. Changes to the questions in the Regulatory Examinations
The new Fit and Proper requirements will form part of the regulatory exam question bank from 1 April 2018. It will be important for representatives who are going to take this examination to ensure they are using study material which is current and updated. There are various providers who offer training or material for these examinations.
Board Notice 194 of 207 is attached for further reference to the above.Board Notice 194 of 2017
