FSP

What are the Minimum Requirements Needed to be Licensed?

In order to be licensed, providers (both FSP’s and their representatives) must prove that they are “Fit and Proper” in terms of the Determination of Fit and Proper requirements. This means that they have to comply in four different areas: 

This refers to the financial soundness of the Financial Services Provider and Representative and clearly states that:

  • The Provider may not be an un-rehabilitated insolvent, or
  • In the case of an FSP II or III, that the assets of the FSP must exceed its liabilities.

The Determination is quite clear that the following will determine the Honesty and Integrity of the

Provider:

(1) An applicant must be of good character and integrity.
(2) In determining whether the applicant is of good character and integrity, the Registrar may refer to any information in possession of the Registrar or brought to the Registrar’s attention.
(3) Without prejudice to the generality of subparagraphs (2) and (4) of this paragraph any of the following factors is prima facie proof that the applicant does not comply with subparagraph (1), namely that the applicant:
(a) has within a period of five years preceding the date of application been found guilty in any civil or criminal proceedings by a court of law or other competent authority (whether in the Republic or elsewhere) of having acted
fraudulently, dishonestly, unprofessionally, dishonourably or in breach of a
fiduciary duty;
(b) has within a period of five years preceding the date of application been fined or censured by, or denied membership due to disqualification of, any professional or financial services industry body (whether in the Republic or elsewhere), recognised by the Board, on account of any act of dishonesty, negligence, incompetence or mismanagement;
(c) has within a period of five years preceding the date of application been fined or censured by any regulatory body (whether in the Republic or elsewhere), recognised by the Board, or that the applicant’s authorisation to carry on business has been refused, suspended or revoked by any such body, because of negligence, incompetence or mismanagement; and
(d) has at any time prior to the date of application been disqualified or prohibited by any court of law (whether in the Republic or elsewhere) from taking part in the management of any company or other statutorily created, recognised or regulated body, irrespective of whether such disqualification has since been lifted or not.
(4) An applicant must in the application be candid, frank and accurate and must of own accord disclose all facts or information at the disposal of or which may be accessible to the applicant and which may be relevant for purposes of a decision by the Registrar that the applicant complies or does not comply with subparagraph (1).

1) An applicant must have and be able to maintain the operational ability to fulfil the responsibilities imposed by the Act on licensees, including the following minimum requirements:
(a) A fixed business address from which business is conducted and which can also serve as a domicilium citandi et executandi for purposes of entry into contract and any judicial or quasi-judicial proceedings;
(b) adequate communication facilities including at least a full-time telephone or cell phone service, and typing and document duplication facilities;
(c) adequate storage and filing systems for the safe-keeping of records, and business communications and correspondence; and
(d) an account with a registered bank including, where necessary, a specific trust account for client moneys.
(2) An applicant must have in place the appropriate money laundering control systems and provision for training of staff, including identification, record-keeping and reporting procedures required under the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001).

The competency requirements are fairly extensive and are based on what type of products the FSP deals with and then go on, for each product type to list the experience levels, academic qualifications and other requirements which the individual must hold to advice on such products.

 

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