Moonstone: Guides of the plain language kind

The best news for us this week was the publication of the last of the Plain Language Guides – the one for Sole Proprietors and FSPs. As Sole Props make up the biggest single group of licenced entities this guide, while not a comprehensive study guide, is a very important aid in preparing for the regulatory exams.

There are three plain language guides available:

1. Fit and Proper Requirements in Plain Language for Financial Services Providers / sole proprietor FSPs, which discusses the responsibilities of Financial Service Providers / sole proprietor FSPs and the Fit & Proper requirements for sole proprietor FSP.

2. Fit and Proper Requirements in Plain Language for key individuals which tells you more about the management and oversight responsibilities of a key individual in a larger FSP

3. Fit and Proper Requirements in Plain Language for representatives will give you a better understanding of the requirements for representatives especially as a sole proprietor FSP will be fulfilling both the function of the key individual and the representative.

By way of example we copy a section from the latest guide hereunder to illustrate how it makes understanding so much easier than having to study the actual legal document. While the majority of our readers may already have the required general experience outlined hereunder, you could find yourself in murky waters if you consider appointing a new rep.

4.1 Experience Requirements

There are general experience requirements, which sole proprietor FSPs in ALL the different categories must adhere to and then there are specific experience requirements for specific product categories.

4.1.1 General Experience Requirements

The sole proprietor FSP must, on the date of approval (in other words, before applying) have at least one year's practical experience (this applies to Categories I, II, IIA, III and IV) in the management or oversight of the activities of a business or part thereof.

The experience could have been gained within or outside the borders of South Africa.

The experience could have been gained in intermittent periods, not more than 5 years prior to the application, and includes experience gained prior to the implementation of the FAIS Act. The experience may have been gained in the management and oversight of services similar to or corresponding to the services rendered by the FSP.

What is acceptable experience?

The experience must be practical experience (in other words “hands-on” experience) that the sole proprietor FSP has gained specifically in terms of the management and oversight of an FSP or a similar business entity.

When submitting the evidence of the experience the sole proprietor FSP has gained to the Registrar, the period of the relevant experience must be clearly specified – dates from and to must be provided.

The evidence provided to the Registrar must be signed off by someone at management level that can be contacted to confirm this experience.

A confirmation letter on an official letterhead of the previous employer and/or business may also be submitted.

The guide then continues to expand on specific experience requirements.

We trust that this example will encourage you to take the time to study the guides which in our opinion is essential reading to fully understand what is required of you, and will help you to get so much more out of the more detailed study material.

Please click here to download a copy. It is all of 7.33MB, so do not give up hope - everything comes to him who is prepared to wait, even large downloads (mostly).