Moonstone: Regulatory exam update

There appears to be some confusion about the exam numbers which we are addressing in a series of articles. On Monday we looked at Exam number 1 which is the first of the level 1 regulatory exams and which should be written by all Key Individuals in licence categories I, II, IIA, III and IV.

Exam 2: First Level Regulatory Examination:Sole Proprietorsand/or Key Individuals in Category I, II, IIA, III and IV

All Sole Proprietors or Key Individuals who are responsible for managing and overseeing the business relating to the rendering of financial services for Category I subcategory 1.1. Long Term Insurance Category A and 1.19 Friendly Society Benefits ONLY are required to write this examination. Representatives are exempt from writing this.

This is a two hour examination and will consist of 80 multiple choice questions.

This examination will test, amongst others, the examinees’:

· Understanding of their role and responsibilities as a Key Individual as required by the FAIS Act, the roles and responsibilities of the Representatives they manage and oversee, including the Fit and Proper requirements and the maintenance of a register of representatives,

· Ability to apply their knowledge in terms of the supervision requirements for Representatives, Representatives’ ongoing training and development, their obligations in terms of the Code of Conduct and their debarment,

· Ability to apply their knowledge of compliance, auditing and record keeping, as well as advertising and adherence to FICA,

· Understanding of the complaints process, maintenance of the FSP license and suspension and withdrawal of an FSP license.

Long Term Insurance Category A refers to assistance policies. (Life policies in which the aggregate of the policy benefits, other than an annuity, and the amount of the premium for which an annuity is provided, does not exceed R18 000. This includes reinsurance policies in respect of such a policies).

For a complete list of the qualifying criteria against which the examinee will be tested, please see Section 1 and Section 5 of Board Notice 105 of 2008.

Exam 3: First Level Regulatory Examination: Sole Proprietors and/or Key Individuals in Category II and/or IIA

All Sole Proprietors or Key Individuals who are responsible for managing and overseeing the business relating to the rendering of financial services for FSPs in Category II (Discretionary FSPs) and IIA (Hedge Fund FSPs) are required to write this examination in addition to Exam 1: First Level Regulatory Examination: Sole Proprietors and/or Key Individuals in Category I, II, IIA, III and IV..

This is a one hour examination and will consist of 30 multiple choice questions.

This examination will test, amongst others, the examinees':

· Ability to apply the Category II and/or IIA FSP business model including the duties and requirements of nominee companies,

· Understanding of the role and responsibilities of the different parties involved, including but not limited to the MANCO, insurers, pension funds, third party FSPs, financial advisors, brokers and clients, as well as the contractual agreements involved,

· Ability to apply their knowledge of the legal environment, including the liquidity, capital, fidelity cover, compliance and record keeping requirements of the FSP,

· Understanding of the management and oversight function relating to client mandates, typical transactions, disclosures and reporting to clients,

· Knowledge of the prohibitions in terms of the Discretionary Code of Conduct and the Personal Account Trading policy.

For a complete list of the qualifying criteria against which the examinee will be tested, please see Section 2 of Board Notice 105 of 2008.