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

Determinations

Determination of Fit and Proper Requirements for Financial Services Providers, 2017

Chapter 2 : Honesty, Integrity and Good Standing

9. Incidents without indicating when persons are not honest, or lack integrity or good standing

 

(1) Without limiting the generality of section 8(1), any of the following constitutes prima facie evidence that a person does not qualify in terms of section 8(1):

 

The person—

(a) has been found guilty (and that conviction has not been expunged) in any criminal proceedings or liable in any civil proceedings by a court under any law in any jurisdiction of—
(i) an offence under a law relating to the regulation or supervision of a financial institution as defined in the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001) or a corresponding offence under the law of a foreign country;
(ii) theft, fraud, forgery, uttering a forged document, perjury or an offence involving dishonesty, breach of fiduciary duty, dishonourable or unprofessional conduct; or
(iii) an offence under the Prevention of Corruption Act, 1958 (Act No. 6 of 1958), the Corruption Act, 1992 (Act No. 94 of 1992) or Parts 1 to 4, or section 17, 20 or 21, of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), or a corresponding offence under the law of a foreign country;
(b) has been convicted (and that conviction has not been expunged) of any other offence committed after the Constitution of the Republic of South Africa, 1996, took effect, where the penalty imposed for the offence was or may be imprisonment without the option of a fine, or a significant fine;
(c) has accepted civil liability for, or has been the subject of a civil judgment in respect of, theft, fraud, forgery, uttering a forged document, perjury or an any conduct involving dishonesty, breach of fiduciary duty, misrepresentation, or negligent, dishonourable and unprofessional conduct;
(d) has been the subject of frequent or material preventative, remedial or enforcement actions by the Registrar or a regulatory authority;
(e) has been removed from an office of trust for theft, fraud, forgery, uttering a forged document, misrepresentation, dishonesty, breach of fiduciary duty or business conduct;
(f) has breached a fiduciary duty;
(g) has been suspended, dismissed or disqualified from acting as a director, managing executive, public officer, auditor or statutory actuary (or his or her alternate) under any law or any action to achieve one of the aforementioned outcomes has been instituted against the person;
(h) has been refused a registration, approval, authorisation or licence to carry out a trade, business or profession, or has had that registration, approval, authorisation or licence suspended, revoked, withdrawn or terminated by a regulatory authority;
(i) has been denied registration or membership of any professional body or has had that registration or membership revoked, withdrawn or terminated by a professional body because of matters relating to honesty, integrity, or business conduct;
(j) has been disciplined, reprimanded, disqualified, or removed in relation to matters relating to honesty, integrity, incompetence or business conduct by a—
(i) professional body; or
(ii) regulatory authority,

or any action to achieve one of the aforementioned outcomes has been instituted against the person;

(k) has knowingly been untruthful or provided false or misleading information to, or been uncooperative in any dealings with, the Registrar or a regulatory authority;
(l) has demonstrated a lack of readiness and willingness to comply with legal, regulatory or professional requirements and standards;
(m) has been found to be not fit and proper by the Registrar or a regulatory authority in any previous assessments of fitness and propriety and the reasons for being found not fit and proper have not been remedied;
(n) has been involved or is involved as a director, trustee, member, partner, controlling shareholder or managing executive, or is concerned in the management, of a business that has been—
(i) the subject of any matter referred to in subparagraphs (a), (b), (c), (d), (f), (h), (j)(ii), (k), (I), (m), or (o); or
(ii) placed in liquidation or business rescue;

while that person has been connected with that organisation or within one year of that connection; or

(o) has failed to disclose information required to be disclosed in terms of the Act, including a failure to disclose information in accordance with section 10.

 

(2) Without limiting subsection (1), compliance with section 8(1) by a person that is not a natural person must be demonstrated through its corporate behaviour or conduct and through the personal behaviour or conduct of the persons who control or govern that first mentioned person or who is a member of a body or group of persons which control or govern that person, including directors, members, trustees, partners or key  individuals of that person.

 

(3) Notwithstanding subsection (1), the Registrar must, in assessing whether a person meets the requirements in section 8(1) have due regard to—
(a) the seriousness of a person’s conduct, whether by commission or omission, or behaviour, and surrounding circumstances to that conduct or behaviour that has or could potentially have a negative impact on a person’s compliance with section 8(1);
(b) the relevance of such conduct or behaviour that has or could potentially have a negative impact on the persons’ compliance with section 8(1), to the duties that are or are to be performed and the responsibilities that are or are to be assumed by that person; and
(c) the passage of time since the occurrence of the conduct or behaviour that had a negative impact on the person’s compliance with section 8(1).