FIA: Intermediaries who fail to take regulatory exams can be debarred

The 30 June 2012 deadline for most intermediaries to take the Financial Services Board’s (FSB) Regulatory Examination is looming large and failure to comply may hold dire consequences for these individuals.

According to Joe Kotzé, National Manager: Compliance at the Financial Intermediaries Association of Southern Africa (FIA), representatives who did not attempt the representative exam before the end of June 2012 must be debarred by their providers on 1 July 2012, or their contracts of employment or mandates can be terminated before the end of June.

“In both instances their names must be removed from the representative register and the registrar must be informed within 15 days of the respective events. Financial Services Providers (FSPs) must also inform product suppliers and clients of the fact that the representatives have been removed from the register and that they may not give advice or render intermediary services anymore.”

Kotzé says the same scenario will apply to representatives that attempted the exam before end of June but did not pass it by end of September 2012. “Representatives may at any time be reappointed as soon as they have passed the exam.”

“It is important to remember that the date of first appointment (DOFA) of the representative will remain operative for future reappointment. There are some ill-conceived rumours that a representative that does not pass the exam can be debarred and then reappointed the next day as a representative under supervision, with a fresh date of appointment.”

Kotzé says it may be prudent to retain the services of a debarred/mandate terminated representative in a clerical or administrative position. “A revised service contract must be in place so that the person understands that no advice may be given or intermediary services rendered.”

He notes that key individuals that do not attempt the key individual exam before end of June 2012 must inform the registrar of the fact and request that their approval be withdrawn and their names removed from the FSB’s register of key individuals. “Sole proprietors must inform the registrar that their authorisation (license) must be withdrawn.”

The same scenario will apply to key individuals and sole proprietors that attempted the exam before the end of June but did not pass it by end of September 2012, says Kotzé. “When they pass the exam they may again apply for approval as key individuals or apply for authorisation as FSPs.”

“While the majority of FIA members have now taken and passed these exams, we are concerned for any other intermediaries who are yet to do so and would urge them to register for the exams as soon as possible.”

“The FIA believes in professionalism as a solid foundation for the financial services industry and therefore continues to advocate these examinations as a necessary tool to further professionalise the industry,” concludes Kotzé.