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Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002)

Chapter IV : Codes of Conduct

16. Principles of code of conduct

 

 

1) A code of conduct must be drafted in such a manner as to ensure that the clients being rendered financial services will be able to make informed decisions, that their reasonable financial needs regarding financial products will be appropriately and suitably satisfied and that for those purposes authorised financial services providers, and their representatives, are obliged by the provisions of such code to –
a) act honestly and fairly, and with due skill, care and diligence, in the interests of clients and the integrity of the financial services industry;
b) have and employ effectively the resources, procedures and appropriate technological systems for the proper performance of professional activities;
c) seek from clients appropriate and available information regarding their financial situations, financial product experience and objectives in connection with the financial service required;
d) act with circumspection and treat clients fairly in a situation of conflicting interests; and
e) comply with all applicable statutory or common law requirements applicable to the conduct of business.

 

2) A code of conduct must in particular contain provisions relating to –
a) the making of adequate disclosures of relevant material information , including disclosures of actual or potential own interests, in relation to dealings with clients;
b) adequate and appropriate record-keeping;
c) avoidance of fraudulent and misleading advertising, canvassing and marketing;
d) proper safe-keeping, separation and protection of funds and transaction documentation of clients;
e) where appropriate, suitable guarantees or professional indemnity or fidelity insurance cover, and mechanisms for adjustments of such guarantees or cover by the registrar in any particular case;
eA) the control or prohibition of incentives given or accepted by a provider; and
f) any other matter which is necessary or expedient to be regulated in such code for the better achievement of the objects of this Act.