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FSCA publishes final amendments under the FAIS Act

30 June 2020 Financial Sector Conduct Authority (FSCA)

On 26 June 2020, the Financial Sector Conduct Authority (FSCA) published final amendments to the General and Short-term deposit Codes of Conduct as well as Fit and Proper requirements under the FAIS Act. The amendments are necessary to contribute to the fulfilment of the FSCA’s legislated objectives and are ultimately intended to promote the fair treatment and protection of financial customers.

Some of the amendments emanated from policy processes that started as far back as 2014, such as the Retail Distribution Review. The introduction of the Insurance Act also resulted in various references to terminology and classes of insurance business in the Long-term Insurance Act and Short-term Insurance Act, as referenced in the Fit and Proper Requirements for Financial Services Providers, 2017 (Fit and Proper requirements), being outdated. Therefore, the amendments are needed to align the FAIS requirements with the current Insurance Act terminology.

The amendment notices underwent comprehensive public consultation and were also submitted to Parliament as required in terms of section 103 of the Financial Sector Regulation Act, 2017 (FSRA).

Following this process, the following documents have been published:
• The Amendment of the General Code of Conduct for Authorised Financial Services Providers and Representatives, 2003 (GCOC) and the specific code of conduct for authorised financial services providers and representatives conducting Short-term deposit business, 2004 (ST Deposit Code).
• A statement of the need expected impact and intended operation of the draft amendments to the GCOC and ST Deposit Code in terms of section 98 of the FSRA.
• A consultation report on the draft amendments to the GCOC and ST Deposit Code in terms of section 104(1) of the FSRA.
• The amendment of the determination of Fit and Proper Requirements
• A statement of the need, expected impact and intended operation of the amendments to the Fit and Proper requirements in terms of section 98 of the FSRA
• A consultation report on the draft amendments to the Fit and Proper requirements in terms of section 104(1) of the FSRA.

These documents are available on the FSCA’s website at www.fsca.co.za. For more information regarding the conduct standards please contact the FSCA’s Regulatory Framework department of the FSCA at [email protected].

Quick Polls

QUESTION

How to give affordable and appropriate financial advice to the low income market segment. There is little room on a R50 pm policy for advisers to be remunerated for the time it would it would take to educate & fulfil admin function. What is the solution?

ANSWER

[a] Eliminate non-advice sales / telesales
[b] Implement industry standards for non-advice information
[c] Introduce an insurer-funded pro-bono advice network to low income earners
[d] Reinforce the Policyholder Protection Rules
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