FIT & PROPER CONFERENCEFIT & PROPER CONFERENCE

OVERVIEW OF FIT & PROPEROVERVIEW OF FIT & PROPERREQUIREMENTSREQUIREMENTS

WHAT IS THE PURPOSE OF FAIS?WHAT IS THE PURPOSE OF FAIS?

FAIS Fit & Proper developed in 2003, published in 2004

Alignment with the NQF therefore the levels and credits

Intention was to move towards a full qualification:

Determination of fit and proper requirements for financial services

providers, 2006 part I, paragraph 1 (e): “any skills programme (i.e. less

than 120 credits), and not whole qualifications (i.e.120 credits and higher), must, subject to any future amendment of this Determination by

the Registrar in connection with a stated number of required credits, not

be construed as eliminating such whole qualification which all relevant applicants are in any case encouraged to complete.”

WHAT WAS THE PROCESS?WHAT WAS THE PROCESS?

In 2006 the need to review the fit and proper

requirements was identified

Consultation process commenced in November 2006

– Fit and proper forum was created

– Start with a “clean slate” approach

– Research and workshops conducted

– Consultation included Assistance Business to Category III FSPs

FIT & PROPER REQUIREMENTS:FIT & PROPER REQUIREMENTS:OVERVIEWOVERVIEW

Must comply

FIT & PROPER REQUIREMENTS:FIT & PROPER REQUIREMENTS:OVERVIEWOVERVIEW

FIT & PROPER REQUIREMENTS:FIT & PROPER REQUIREMENTS:OVERVIEWOVERVIEW

FIT & PROPER REQUIREMENTS:FIT & PROPER REQUIREMENTS:OVERVIEWOVERVIEW

FIT & PROPER REQUIREMENTS:FIT & PROPER REQUIREMENTS:OVERVIEWOVERVIEW

FIT & PROPER REQUIREMENTS:FIT & PROPER REQUIREMENTS:OVERVIEWOVERVIEW

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:SOLE PROPRIETORSSOLE PROPRIETORS

1. Qualification1. Qualification

2. Experience Requirements2. Experience Requirements

3. Regulatory Examination Level 13. Regulatory Examination Level 1

4. 4. Regulatory Examination Level 2Regulatory Examination Level 2

5. Continuous Professional Development (CPD)5. Continuous Professional Development (CPD)

As per Fit and Proper Determination

2 Years after appointment

Within 5 years of appointment

15 – 60 hours on a 3 year cycle

At date of appointment

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:KEY INDIVIDUALSKEY INDIVIDUALS

1. Qualification1. Qualification

2. Experience Requirements2. Experience Requirements

3. Regulatory Examination Level 13. Regulatory Examination Level 1

4. 4. Regulatory Examination Level 2Regulatory Examination Level 2

5. Continuous Professional Development (CPD)5. Continuous Professional Development (CPD)

As per Fit and Proper Determination

At date of approval. There are transitional arrangements for KI’s approved between 2004 and 2009.

Within 5 years of approval

15 – 60 hours on a 3 year cycle

At date of approval

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:REPRESENTATIVESREPRESENTATIVES

1. Entry Level 1. Entry Level QualificationQualification

2. Experience Requirements2. Experience Requirements

3. Regulatory Examination Level 13. Regulatory Examination Level 1

4. 4. Regulatory Examination Level 2Regulatory Examination Level 2

5. Continuous Professional Development (CPD)5. Continuous Professional Development (CPD)

As per Fit and Proper Determination

Within 2 years of appointment

1 Year after obtaining a recognised qualification.

15 – 60 hours on a 3 year cycle

At date of appointment

Gained / obtained while working under supervision

FIT AND PROPER REQUIREMENTSFIT AND PROPER REQUIREMENTSREGULATORY EXAMINATIONSREGULATORY EXAMINATIONS

Regulatory Regulatory Regulatory Regulatory

Examination Examination Examination Examination

Level 1 =Level 1 =Level 1 =Level 1 =

Legislative Legislative Legislative Legislative

ExaminationExaminationExaminationExamination

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:REGULATORY EXAMINATIONSREGULATORY EXAMINATIONS

Regulatory Regulatory Regulatory Regulatory

Examination Examination Examination Examination

Level 1 =Level 1 =Level 1 =Level 1 =

Legislative Legislative Legislative Legislative

ExaminationExaminationExaminationExamination

Regulatory Regulatory

Examination Examination

Level 2 =Level 2 =

Product Product

Specific Specific

ExaminationExamination

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:QUALIFICATIONSQUALIFICATIONS

Regulatory Regulatory Regulatory Regulatory

Examination Examination Examination Examination

Level 1 =Level 1 =Level 1 =Level 1 =

Legislative Legislative Legislative Legislative

ExaminationExaminationExaminationExamination

Long-term Cat A & Friendly Society Benefits• ABET Level 1• Read , write and calculate

Category I Category II & IIA Category III Category IV

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:QUALIFICATION LISTQUALIFICATION LIST

Regulatory Regulatory Regulatory Regulatory

Examination Examination Examination Examination

Level 1 =Level 1 =Level 1 =Level 1 =

Legislative Legislative Legislative Legislative

ExaminationExaminationExaminationExamination

List will be updated quarterlyList will be updated quarterly

Formal applications to be submitted to add Formal applications to be submitted to add

qualifications to the listqualifications to the list

Any person, learning institution or FSP (employer) Any person, learning institution or FSP (employer)

may submit applicationsmay submit applications

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:EXPERIENCE EXPERIENCE –– CATEGORY I & IVCATEGORY I & IV

Range between 6 months to 2 years depending on the product category

Sole proprietors Sole proprietors must meet the experience requirements on application

Key individuals Key individuals must have at least 1 year experience in managing or

overseeing the financial services of an organisation, and the experience

period must relate to the period required for the category or subcategory

(s)he is approved for. If you also act as a representative, you must have the

relevant product related experience.

RepresentativesRepresentatives must have experience as required for the category or

subcategory appointed for, but experience can gained under supervision.

The experience period differs according to the type of category or

subcategory, and can be gained in multiple subcategories at the same time.

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:EXPERIENCE EXPERIENCE –– CATEGORY II, IIA & IIICATEGORY II, IIA & III

Experience requirements are 2 – 3 years depending on the category or

subcategory (s)he is approved for.

Can be gained under supervision.

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:CONTINUOUS PROFESSIONALCONTINUOUS PROFESSIONAL

DEVELOPMENT (CPD)DEVELOPMENT (CPD)

Depending on the category or subcategory between 15 and 60 hours of CPD

activities must be completed over a 3 year cycle.

CPD activities and/or programmes must be verifiable, i.e.

− Courses, conferences, seminars

− Studies leading to formal assessment

− Workshops

− Structured self-study programmes

CPD activities offered through industry associations, professional bodies,

employers, institutes of higher education and accredited training providers

may apply for their offerings to be recognised.

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:OPERATIONAL ABILITYOPERATIONAL ABILITY

Meet business requirements

Confirm competence requirements of people working for the

business

KI must meet requirements

FIT AND PROPER REQUIREMENTS:FIT AND PROPER REQUIREMENTS:FINANCIAL SOUNDNESSFINANCIAL SOUNDNESS

Specific requirements regarding the financial soundness of the business:− Must not be unrehabilitated insolvent / under liquidation / provisional

liquidation;

− Assets must exceed liabilities

− Cat I: Maintain liquid assets equal to or greater than 4/52 weeks if annual

expenditure;

− Cat II: Maintain liquid assets equal to or greater than 8/52 weeks if

annual expenditure;

− Cat IIA and III: Maintain liquid assets equal to or greater than 13/52

weeks if annual expenditure.

TRANSITIONAL ARRANGEMENTS:TRANSITIONAL ARRANGEMENTS:SOLE PROPRIETORSSOLE PROPRIETORS

Authorised in 2010 Authorised in 2010 Qualification achieved by 31/12/2015First level regulatory examination 31/12/2012Second level regulatory examination by 31/12/2016

TRANSITIONAL ARRANGEMENTS:TRANSITIONAL ARRANGEMENTS:KEY INDIVIDUALS & REPRESENTATIVESKEY INDIVIDUALS & REPRESENTATIVES