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

Determination of Fit and Proper Requirements for Financial Services Providers, 2008

Part IV : Experience Requirements

 

 

4.
1) Experience Requirements for Category I:
a) Subject to the provisions of the Act, an FSP (who is a sole proprietor) in respect of Category I must meet the minimum experience applicable to the subcategories as described in either column two and/or three of Table A below. The experience must be practical experience gained in the rendering of financial services in respect of Category I and the subcategories concerned: Provided that-
i) such experience involved the active and ongoing gaining of knowledge, skills and expertise required in terms of the Act;
ii) such experience was obtained through the active involvement of in rendering such financial services, irrespective of whether the experience was gained in the course of rendering such services under supervision
iii) such experience could have been gained either within or outside the Republic of South Africa;
iv) such experience could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act;
v) such experience may have been gained simultaneously in multiple subcategories, provided that proof of such experience can be provided.
vi) where an FSP changes its licence restrictions to include additional financial services or renders services in relation to additional subcategories, the FSP is required to meet the experience requirements relating to the additional subcategories with the proviso that where the change in restriction will include-
aa) additional financial service (advice or the rendering of intermediary services, as applicable), the FSP is required to obtain 50% of the experience requirements applicable to the additional financial services;
bb) an additional subcategory, the FSP is required to gain 100% of the experience requirements relation to the additional subcategory.
b) A representative of a FSP in respect of Category I at the date of appointment by the FSP comply with the same relevant experience requirements as referred to in subparagraph 1(a), provided that a representative who does not meet such requirement on date of authorisation, may be exempted by the Registrar to acquire the required minimum experience while working under supervision.

 

c) A key individual of an FSP in respect of Category I, must, on the date of approval by the Registrar, have at least one (1) year's practical experience in the management or oversight of the activities of a business or part thereof. Provided that such experience -
i) could have been gained either within or outside the Republic of South Africa;
ii) could have been gained during intermittent periods, not more than 5 years prior to the application for approval and includes experience gained prior to the date envisaged in section 7(1) of the Act;
iii) may have been gained in the management or oversight of services similar to or corresponding to the financial services rendered by the FSP.

 

TABLE A:

CATEGORY I EXPERIENCE REQUIREMENTS FOR AN FSP AND REPRESENTATIVE

 

COLUMN ONE SUBCATEGORY

COLUMN TWO ADVICE: MINIMUM EXPERIENCE

COLUMN THREE INTERMEDIARY SERVICES: MINIMUM EXPERIENCE

1.1

Long-term Insurance subcategory A

6 months

2 months

1.2

Short-term Insurance Personal Lines

1 year

6 months

1.3

Long-term Insurance:

 

 

1.3.1

subcategory B1

1 year

6 months

1.3.2

subcategory B2

1 year

6 months

1.4

Long-term Insurance subcategory C

1 year

6 months

1.5

Retail Pension Benefits

1 year

6 months

1.6

Short-term Insurance Commercial Lines

1 year

6 months

1.7

Pension Fund Benefits

1 year

6 months

1.8

Securities and instruments: Shares

2 years

1 year

1.9

Securities and Instruments: Money market instruments

2 years

1 year

1.10

Securities and Instruments: Debentures and securitized debt

2 years

1 year

1.11

Securities and Instruments: Warrants, certificates and other instruments acknowledging debt

2 years

1 year

1.12

Securities and Instruments: Bonds

2 years

1 year

1.13

Securities and Instruments: Derivative instruments excluding warrants

2 years

1 year

1.14

Participatory Interests in one or more collective Investment schemes

1 year

1 year

1.15

Forex Investment Business

2 years

1 year

1.16

Health Service Benefits

2 years

2 years

1.17

Long-term Deposits

6 months

3 months

1.18

Short-term Deposits

6 months

3 months

1.19

Friendly Society Benefits

6 months

2 months

 

2) Category II - Experience Requirements:

 

a) Subject to the provisions of the Act, an FSP (who is a sole proprietor) in respect of Category II must meet the minimum experience applicable to the subcategories as described in column two of Table B below. The experience must be practical experience gained in the rendering of financial services in respect of Category II and the subcategories concerned: Provided that -
i) such experience involved the active and ongoing gaining of knowledge, skills and expertise required in terms of the Act;
ii) such experience was obtained through the active involvement in rendering such financial services, irrespective of whether the experience was gained in the course of undergoing services under supervision;
iii) the experience could have been gained either within or outside the Republic of South Africa;
iv) the experience could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act;
v) the experience may have been gained simultaneously in multiple subcategories, provided that proof of such experience can be provided;
vi) may have been gained in a team environment where the person participated in the process of making investment decisions whilst working under supervision;
vii) where a Category II FSP applies for the amendment of the restrictions on its licence to allow such FSP to render the financial services referred to in subparagraph (a) in additional subcategories, the FSP must comply with the experience requirements applicable to the additional subcategories.
b) A representative of an FSP in respect of Category II, must at appointment by the FSP comply with the same relevant experience requirements as referred to in subparagraph 2(a) above, as the FSP with authorisation, provided that a representative who does not meet such requirement on date of authorisation, may be exempted by the Registrar to acquire the required minimum experience while working under supervision.
c) A key individual of a provider in respect of Category II, must have at least one (1) year's practical experience in the management and oversight of services similar to or corresponding to the financial services rendered by the provider and must have actually provided the financial services in relation to the subcategories or part thereof on date of approval. Provided that-
i) the experience could have been gained either within or outside the Republic of South Africa;
ii) the experience could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act;
iii) the experience may have been gained in the management and oversight of services similar to or corresponding to the financial services rendered by the provider.

 

TABLE B: CATEGORY II EXPERIENCE REQUIREMENTS FOR FSP AND REPRESENTATIVE

 

COLUMN ONE:

SUBCATEGORY

COLUMN TWO:

MINIMUM EXPERIENCE

2.1

Long-term Insurance:

 

2.1.1

subcategory B1

2 years

2.1.2

subcategory B2

2 years

2.2

Long-term Insurance Category C

2 years

2.3

Retail Pension Benefits

2 years

2.4

Pension Fund Benefits

2 years

2.5

Securities and instruments: Shares

3 years

2.6

Securities and Instruments: Money market instruments

3 years

2.7

Securities and Instruments: Debentures and securitised debt

3 years

2.8

Securities and Instruments: Warrants, certificates and other instruments acknowledging debt

3 years

2.9

Securities and Instruments: Bonds

3 years

2.10

Securities and Instruments: Derivative instruments excluding warrants

3 years

2.11

Participatory Interests in one or more collective Investment schemes

2 years

2.12

Forex Investment Business

3 years

2.13

Long-term Deposits

1 year

2.14

Short-term Deposits

1 year

 

3) Category IIA - Experience Requirements:

 

a) Subject to the provisions of the Act, an FSP (who is a sole proprietor) in respect of Category IIA must have 3 years experience. The experience must be practical experience gained in the rendering of financial services in respect of Category IIA: Provided that-
i) such experience involved the active and ongoing gaining of knowledge, skills and expertise required in terms of the Act;
ii) such experience was obtained through the active involvement in rendering such financial services, irrespective of whether the experience was gained in the course of undergoing services under supervision;
iii) the experience could have been gained either within or outside the Republic of South Africa;
iv) the experience could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act.
b) A representative of an FSP in respect of Category II, must at appointment by the FSP comply with the same relevant experience requirements as referred to in subparagraph 3(a) above, as the FSP with authorisation, provided that a representative who does not meet such requirement on date of authorisation, may be exempted by the Registrar to acquire the required minimum experience while working under supervision.
c) may have been gained in the management and/or oversight of services similar to or corresponding to the financial services rendered by the provider.A key individual of a provider in respect of Category IIA, must have at least one (1) year's practical experience in the management and oversight of services similar to or corresponding to the financial services rendered by the provider and must have actually provided the financial services in relation to Category IIA on date of approval. Provided that-
i) the experience could have been gained either within or outside the Republic of South Africa;
ii) the experience could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act;
iii) the experience may have been gained in the management and oversight of services similar to or corresponding to the financial services rendered by the provider.

 

4) Category III - Experience Requirements:
a) Subject to the provisions of the Act, the key individual of a Category III FSP must have 3 year's practical experience gained in the rendering of financial services as referred to in the definition of "administrative FSP": and must have at least one (1) year's practical experience in the management and/or oversight of services similar to or corresponding to the financial services rendered by the FSP: Provided that such practical experience-
i) involved the active and ongoing gaining of knowledge, skills and expertise required in terms of the Act;
ii) was obtained through the active involvement in the rendering of such financial services;
iii) could have been gained either within or outside the Republic of South Africa;
iv) could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act;
v) may have been gained simultaneously in multiple subcategories provided that proof of such experience can be provided and irrespective of whether the experience was gained whilst rendering such services under supervision.
b) A representative of a Category III FSP must, unless exempted, at the date of appointment by the FSP comply with the same relevant experience requirement as referred to in subparagraph 4(a), excluding the requirement to have at least one year's practical experience in the management and/or oversight of services similar to or corresponding to the financial services rendered by the FSP.

 

5) Experience Requirements for Category IV:
a) Subject to the provisions of the Act, a Category IV FSP (who is a sole proprietor), must have one (1) year's experience gained in the rendering of financial services as referred to in the definition of "administration of assistance policies": Provided that such practical experience-
i) involved the active and ongoing gaining of knowledge, skills and expertise required in terms of the Act;
ii) was obtained through the active involvement in the rendering of such intermediary services and irrespective of whether the experience was gained whilst rendering such services under supervision: provided that proof of such experience can be provided;
iii) could have been gained either within or outside the Republic of South Africa;
iv) could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act;
b) A representative of an FSP in respect of Category IV must with authorisation by the FSP meet the same relevant practical experience requirement, mentioned in subparagraph 1(a) above, as an FSP (who is a sole proprietor) on authorisation, provided that a representative who does not meet such requirement on date of authorisation by the FSP, may be exempted by the Registrar to acquire the required minimum experience while working under supervision for the minimum experience period.
c) A key individual of an FSP in respect of Category IV must, on the date of approval by the Registrar, have at least one (1) year's practical experience in the management and/or oversight of services similar to or corresponding to the financial services rendered by the FSP: Provided that such practical experience-
i) could have been gained within or outside the Republic of South Africa;
ii) could have been gained during intermittent periods, not more than 5 years prior to the application and includes experience gained prior to the date envisaged in section 7(1) of the Act;
iii) may have been gained in the management and/or oversight of services similar to or corresponding to the financial services rendered by the provider.