Page 91 - Profile's Unit Trusts & Collective Investments - March 2025

Legislation and Guidelines

Compliance Officers
Any FSP with more than one key individual or more than one representative must appoint a
compliance officer. The compliance officer can be an existing member of staff, but must be approved
by the Registrar. The job of the compliance officer is, broadly, to monitor compliance with FAIS. This
includes monitoring both the FSP itself and representatives in the employ of the FSP.
As part of fulfilling his or her functions, the compliance officer must submit regular reports and
must liaise with the Registrar of financial services.
More specifically, the compliance officer is required to:
Function independently and objectively
Have personal characteristics of honesty and integrity
Have a thorough knowledge of FAIS legislation
Ensure proper compliance monitoring
Enjoy the support of senior management
Be equipped with the necessary resources to ensure compliance
In order to be approved by the Registrar, a compliance officer must meet the following criteria:
A legal or accounting degree plus at least three years’ experience in financial services; or
The compliance officer must have passed an industry-specific course recognised by the
FSCA (plus at least three years’ experience in financial services); or
The compliance officer must already be appointed as a compliance officer according to the pro-
visions of any Act other than the FAIS Act; or
The compliance officer must be an accredited member of the Compliance Institute of South
Africa, with at least three years’ experience.
These qualifications and experience requirements do not apply if the person to be appointed as a
compliance officer is a director or member of an FSP.

Code of Conduct
2022 Amendments to the A key feature of FAIS is that it requires all
General Code of Conduct FSPs and representatives (and all “key
(GN2814) individuals”) to act in accordance with a rigorous
code of conduct. Essentially, the code tries to
• The addition of the obligation to disclose if products or ensure the highest possible levels of professional
services that are not regulated under the Act are conduct, integrity and transparency in the
offered and to point out that clients are not afforded financial services industry.
the protections under FAIS in respect of those addi- The entire code is available on the FSCA website
tional products or services.
(www.fsca.co.za), and given the importance of the
• Excludes providers who handle premiums under the code, it should be read and re-read by all FSPs,
Short and Long Term Insurance Acts from the require- FSPRs and key individuals. It should be noted that
ment to have a separate bank account for these.
the conduct of financial advisers is also regulated by
• Excludes providers subject to the Short or Long Term many other regulations and pieces of legislation,
Insurance Acts from maintaining guarantees, profes- depending on the area of speciality – the Code of
sional indemnity or fidelity insurance.
Conduct does not encompass everything with which
an adviser must comply.
Some of the more important elements of the code are as follows:
Financial advisers must act honestly and fairly at all times, exercising skill, care and diligence.
They must act in the interests of clients at all times, and must advise clients if they have any
personal interest in the investment product or service.
An FSP may not misrepresent the extent of any FSCA license held and must disclose when
they advise on unregulated products that are not covered by their licence.
They must act prudently (ie, be careful not to give reckless advice), and must avoid conflicts
of interests with clients.

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