Provided you have ensured continued compliance with all aspects of the FAIS Act and its subordinate legislation during the reporting period, you will not be faced with any major issues in the completion of the 2006 Compliance Report due from the end of August for most FSP's.
The final version of the 2006 report is yet to be published in the Government Gazette, but we do not expect it to differ substantially from the final draft.
New focus
In short, the format of the 2006 Compliance Report has remained the same as the 2005 report and it appears the same reporting software will be employed as last year. However, the focus of the report has shifted from reporting on general compliance with the FAIS Act, to more specific issues.
This is highlighted in the questions surrounding the following:
*The fit and proper education requirements of Key Individuals
*Representatives acting on behalf of more than one FSP
*The role of the compliance officer in monitoring the compliance
*The maintenance of records by the FSP (procedures to record written and verbal communications to clients, storage of records and their retrieval for inspection)
*The existence of written contractual relationships between the FSP and its clients
*The required disclosures to clients regarding the FSP, the product providers and the financial services being rendered and whether these disclosures were updated when necessary
*Whether the FSP conducted needs analyses for its clients
*Whether the FSP relied on S8(4)(a) and(b) of the Code of Conduct as the reason for providing the client with limited advice and if so, how often
*Whether records of advice were maintained and provided to the client
*Whether the FSP has appropriate money laundering controls in place, details of the appointed money laundering control officer, whether the compliance officer monitored whether the FSP obtained the FICA information, whether any other accountable institutions relied on the verification of clients by the FSP and an instruction to attach a copy of the FSP's internal rules to the Compliance Report.
Controls and procedures
Several questions revolve around the controls and procedures the FSP has in place to ensure compliance with the FAIS Act and the monitoring by the Compliance Officer of these controls and procedures.
The final version of the 2006 report is yet to be published in the Government Gazette, but we do not expect it to differ substantially from the final draft.
New focus
In short, the format of the 2006 Compliance Report has remained the same as the 2005 report and it appears the same reporting software will be employed as last year. However, the focus of the report has shifted from reporting on general compliance with the FAIS Act, to more specific issues.
This is highlighted in the questions surrounding the following:
*The fit and proper education requirements of Key Individuals
*Representatives acting on behalf of more than one FSP
*The role of the compliance officer in monitoring the compliance
*The maintenance of records by the FSP (procedures to record written and verbal communications to clients, storage of records and their retrieval for inspection)
*The existence of written contractual relationships between the FSP and its clients
*The required disclosures to clients regarding the FSP, the product providers and the financial services being rendered and whether these disclosures were updated when necessary
*Whether the FSP conducted needs analyses for its clients
*Whether the FSP relied on S8(4)(a) and(b) of the Code of Conduct as the reason for providing the client with limited advice and if so, how often
*Whether records of advice were maintained and provided to the client
*Whether the FSP has appropriate money laundering controls in place, details of the appointed money laundering control officer, whether the compliance officer monitored whether the FSP obtained the FICA information, whether any other accountable institutions relied on the verification of clients by the FSP and an instruction to attach a copy of the FSP's internal rules to the Compliance Report.
Controls and procedures
Several questions revolve around the controls and procedures the FSP has in place to ensure compliance with the FAIS Act and the monitoring by the Compliance Officer of these controls and procedures.
Separate Schedules
A further change to this year's report sees the introduction of separate Schedules A and B. Schedule A is the Compliance Report to be completed by the approved Compliance Officer, while Schedule B is the Compliance Report to be completed by those FSP's who, in terms of S17(1) of the FAIS Act, are exempt from requiring a Compliance Officer.
The intention of introducing Schedule B is to make it easier for this group of FSP's to complete and submit their reports. It covers the same ground as the Schedule A report but removes those questions relating to monitoring by the Compliance Officer and to representatives.
Reporting dates
With the exception of those FSP's whose Financial Year end was 31 January 2006 and whose reporting date has been changed to 31 August 2006, the reporting dates have remained the same as last year, with the report to be submitted two months after the expiration of the reporting date.
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