conditions attached such as: what types of services can be offered - PowerPoint PPT Presentation

Requirements for an FSP to maintain a license • Licensing condition  Each license that is issued by the Registrar has conditions attached such as:  what types of services can be offered  which category or subcategory the FSP can operate in.  When applying for authorisation it must be submitted in the form and manner as determined by the Registrar  The application also needs to be accompanied by sufficient information to satisfy the Registrar that the applicant is fit and proper.

Requirements for an FSP to maintain a license  The Registrar may also request from the applicant any additional information that he deems necessary.  The Registrar may also take any other information regarding the applicant or proposed key individual of the applicant into account, obtained from any source including the Ombud. • Licensing condition  FSP’s should have adequate systems and processes (internal controls) in place to ensure that they can comply with the conditions of their license.  FSP’s can have more that one license so as to expand what services or products they're allowed to offer.

Requirement Responsibility Representatives must ensure that they don’t No one may offer financial services to clients offer services on behalf of an un-authorised on behalf of an un-authorised FSP FSP Representatives must confirm to clients that Representatives should ensure that the they are acting on behalf of the FSP as an relevant documentation is available and used employee or under a mandate. to confirm the required information to clients All debarred Representatives must have The Representatives must ensure that the followed the procedures for reappointment of conditions of section 2 of BN82 of 2003 must a debarred rep before they can act as a rep have been met before applying for again. reappointment. The FSP is responsible for its Representatives & The FSP must at all times ensure that key individuals fit and proper status. Representatives and key individuals are fit and The FSP can implement internal rules to proper and comply with all applicable codes of promote compliance with the code of conduct conduct. but reps must ensure that they understand what is required of them, and obey

Remaining updated with legislation • It is crucial for FSP’s to remain up to date with legislation and there are three main areas that need to be observed:  Security related legislation  Insurance specific legislation  Consumer protection legislation • The FSP should ensure that they have the necessary procedures and systems in place to identify and flag changes in legislation for E.g. a subscription to moonstones newsletter or risk SA magazine. • Representatives should also actively seek information about legislative changes

Undesirable business practices • Any actions that lead directly or indirectly to the below effects are considered undesirable business practises.  Harm relations between FSP’s, clients or the general public.  Cause unreasonable prejudice to clients.  Deceive clients.  Unfairly affect clients.  If allowed to continue will defeat one or more objects of the FAIS Act.

The Process of Declaring a practise undesirable • The registrar first published an intention to make a declaration and allows the FSP a chance to respond. • The registrar then officially publishes the declaration and the FSP must legally stop with the undesirable practise from the date of the declaration going forward. • If the FSP ignores the declaration and continues with the undesirable practise then the registrar may inform the FSP to rectify or reinstate any damages or loss caused to other FSP’s or clients. • Once issued with the order to rectify or reinstate any damages the FSP has 60 days to do so. • If the FSP does not rectify or reinstate the damages then they could face a fine of not more than R10 million or imprisonment of not more than 10 years.

Displaying of Licenses • All FSP licenses must be displayed in a durable and prominent manner within each of the business premises. • The license must always be available immediately or within a reasonable time to any person who has a legal right to request it or wants to enter into a business relationship with the FSP. • All advertisements, business documentation and promotional material must make reference to the FSP’s license. NB!! It is not necessary to refer to the license number in promotional material • The license must be available for production to anyone who requests proof that the business is licensed. • Certified copies of the license may be used for display purposes

Suspension or withdrawal of license • Reasons for suspension or withdrawal:  No longer meets the fit and proper requirements.  Didn’t disclose all required information when applying for the license.  Submitted false or misleading information when applying for the license.  Failed to comply with any aspects of the FAIS act.  Still owes levies, penalties or administrative sanctions to the FSB.  Doesn’t have a key individual.

Process of suspending or withdrawing a license • When the registrar is planning on suspending or withdrawing a license the following process is followed. Step 1: The registrar may consult a regulatory authority before taking action Step 2: The registrar must firstly inform the FSP of the intention to suspend or withdraw the license and provide the FSP with certain information and give them a chance to respond • NB!! the registrar must provide the FSP with the following information:  the intended period of suspension.  the terms and conditions attached to the suspension or withdrawal.

Process of suspending or withdrawing a license NB!! such terms and conditions may include  the prohibiting of new business and protection of client interests regarding un-concluded business  what terms need to be met to lift the suspension. Step 3: the registrar must then consider the response received from the FSP and decide whether or not to suspend or withdraw the license Step 4: if the registrar decided to suspend or withdraw a license then he must publish the suspension or withdrawal with reasons and conditions on the official website and public media. NB!! If the FSP’s license gets withdrawn then the licensee will be debarred from applying for a new license for a period specified by the registrar • Suspensions and withdrawals of licenses are the result of non- compliance with requirements of the FAIS Act

Suspension and withdrawal • Recourse for the FSP:  The FSP is given an opportunity to respond to the registrar following which the registrar then makes a final decision on whether or not to suspend or withdraw the license.  In the case of a provisional suspension or withdrawal after considering the FSP’s response the registrar will then decide on whether or not to:  lift the provisional suspension or withdrawal or  to make it final. • NB!! If the license has been suspended or withdrawn either provisionally or finally the FSP can no longer act as a FSP until the suspension has been lifted or a new license is approved by the registrar.

Lapsing of a license • The license of an FSP who is a natural person may lapse in the following instances:  The licensee is finally sequestrated  The licensee dies  The licensee becomes permanently unable to carry on business because of physical or mental disease or serious injury • The license of an FSP who is a juristic person may lapse in the following instances.  The FSP is liquidated or dissolved  The business has become dormant  The FSP’s license is surrendered to the registrar

Lapsing of a license • The licensee, key individual or any other person in control of the affairs of the licensee must advise the registrar in writing of the lapsing of the license and reasons therefore. • The registrar may publish the lapsing of a license on the official website or in any other public media.

The Roles, Powers & Requirements of the FAIS Ombud • The role of the FAIS Ombud is to resolve disputes relating to the rendering of financial services by providers where they:  Either failed to comply with the FAIS act or  Have due to wilful or negligent conduct caused the client to suffer or  will potentially cause clients to suffer prejudice or damage. • The FAIS Ombud acts independently and objectively and takes no instructions from any person regarding the exercise of authority. • The services provided by the Ombud are not the same as a legal advisor but are instead limited to investigation and determination of complaints relating to the FAIS Act. • The Objective of the FAIS Ombud is to consider and dispose of complaints in a procedurally fair, informal, economical and expeditious manner and according to what is fair in all circumstance.

The Powers of the FAIS Ombud The FAIS Ombud is authorised to investigate and adjudicate(make a decision on) complaints by clients against FSP’s and Representatives. • Complaints could relate to:  Areas of non-compliance by the FSP  Financial services being offered negligently  Wilfully committing misconduct whilst offering a financial service. • Compensation could vary from:  Ordering the complainant to be placed in the position that he or she would have been, had it not been for the misconduct of the representative.  Simply correcting a misunderstanding.