FAIS Fit and Proper requirements amended

10 October 2006 Anina Scholtz, Celestis

The keenly awaited amendments to the FAIS Fit and Proper legislation were gazetted under Board Notice 91 of 2006 on 16 August 2006. While the amendments did not introduce revised academic standards, they did make important changes to the time scales within which new industry entrants will need to qualify as FAIS Fit and Proper.

Existing key individuals and representatives currently have three years from the date of first appointment in which to qualify, academically, as FAIS Fit and Proper.

Date of first appointment
The date of first appointment refers to the date on which the key individual or representative was first appointed to that position by any FSP. If the key individual or representative transfers to a different FSP, the original three-year period continues to apply. In other words, if a key individual or representative was appointed to an FSP on 1 October 2004, he or she will need to qualify as Fit and Proper by 30 September 2007 irrespective of whether he or she changes to another FSP after the original (first) date of appointment.

There is now no distinction between key individuals or representatives in terms of the qualification (academic) standards or time periods required to attain FAIS Fit and Proper status.

Those who were key individuals or representatives on 1 October 2004 have until 30 September 2007 to qualify in terms of the Fit and Proper legislation. Anyone who was appointed as a key individual or representative after 1 October 2004 has three years from the date of first appointment to qualify as FAIS Fit and Proper.

Real impact
Now, we need to understand the real (and significant) change that has been legislated. Anyone appointed as a key individual or representative after 1 January 2007 has until 31 December 2009 to qualify academically as FAIS Fit and Proper, irrespective of the date of appointment.

If a key individual or representative is appointed on 1 November 2009, then he or she has precisely two months in order to qualify, academically, as Fit and Proper.
Clearly, this amendment heralds the introduction of a new wave of thinking in our industry. We need to change our mindset as regards future representatives. Quite simply, from the end of 2009 you will have to have attained the minimum academic standards (credits) before you sign up as a representative with an FSP.

Academic standards
As already mentioned, the academic standards have not been altered. In terms of a long-term (Category C) FAIS licence, for example, a new entrant requires a Grade 12 certificate or 30 credits at NQF Level 5 or a full, appropriate NQF Level 4 certificate. For many of us, this should not represent a problem and most FSPs have already adopted minimum entry standards equal to or exceeding these criteria. However, the minimum FAIS Fit and Proper academic requirements could change in the future without a change to the dates by which they need to be attained.

Finally, anyone appointed in the industry for the first time must gain 12 months of relevant experience before he or she is fully Fit and Proper. Even someone who exceeds the prescribed minimum academic standards must spend a year under supervision within an FSP. 

Anina Scholtz
Head: Compliance

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