Moonstone: Fit and Proper regulations

NEBULOUS SHOULD BE A FOUR-LETTER WORD

Trying to clarify the implications of the new Fit and Proper regulations is like undoing a "kraaines" in a Penn reel when your six-year old daughter attempted her first solo cast.

For the sake of clarity, this article will only focus on those FSPs who were appointed before or on 31 December 2007. Next week we will discuss those appointed after this date.

Transitional arrangements were put in place for key individuals, representatives and sole proprietors currently in the industry. For the group identified above, the most important aspects are:

• The requirements in respect of a qualification have NOT been increased to a full qualification. That means that if, for example, the requirement was 30 credits on NQF Level 4 as at the end of 2009, it remains 30 credits on NQF level 4 unless the FSP decides to add a new sub-category to his/her license.
• Those who have not yet obtained the required credits have until 31 December 2009 to do so. Do not think that you can leave this until November – the admin process to ensure official confirmation on the National Learner Record Database can take up to four months. We recommend that you finish your training no later than August 2009 to avoid having your license suspended.
• In those instances where FSPs authorised before 31 December 2007 had subsequently added one or more license sub-categories, or intend doing this before 31 December 2009, they have until 31/12/2011 to obtain the necessary credits required in terms of the additional categories.
• It is therefore very sensible for these FSPs to finish the qualifications that they have started, as they may not be able to finish expired qualifications later should they change categories.
• These FSPs also have to complete the relevant Regulatory Examinations by certain specified dates – RE1 by the end of 2011 and RE2 by 2013. See hereunder for more details.

If you have the slightest doubt about the validity of your credits, E-mail your request for details together with your ID number and full names to verifications@saqa.org.za. You will receive a transcript of all the information on your learning enrolments and achievements that is on the National Learner Record Database.

Regulatory Exams (RE)

These examinations are required to be completed over and above the skills program credit and/or qualification requirements.

All key individuals, FSPs (who are sole proprietors) and representatives must write Regulatory Examinations 1 and 2. However, representatives falling under categories 1.1 (Long-term) and 1.19 (Friendly Societies) will be exempted while students who have completed one of the approved specific (not generic) qualifications as published on the FSB’s recognised qualifications list will also be exempt from writing RE 2 for the specific sub-category.

• RE1 focuses on FAIS, FICA and other subordinate legislation such as the regulations and codes of conduct and has to be completed by ALL key individuals, FSPs (who are sole proprietors) and representatives (except as indicated above) by 31/12/ 2011. In the case of category 1.1 FSPs and Key Individuals the final date is 31/12/2013.
• RE2 focuses on the specific knowledge required for a particular product category, including legislation pertaining to it. Exemptions apply as indicated above. An RE 2 examination will be required per license sub-category e.g. an FSP licensed for Short Term Commercial Lines, Long Term Category C and Health Service Benefits may have to do up to three separate RE 2 examinations. The final date by which RE2 have to be completed is 31/12/2013. This does not apply to Category 1.1 and 1.19 FSPs and Key Individuals.

Continuous Professional Development

This only comes into effect after the regulatory examinations have been completed successfully.

In closing

While the new requirements will impact on your pocket and productivity, it should in the long run help you become better equipped to handle the increased demands on you as a professional provider of financial services.

There is a far stronger emphasis on ensuring that the content on which one is to be examined is industry related than in the past, which is to be welcomed.