Page 90 - Profile's Unit Trusts & Collective Investments - September 2025

Chapter 5 Legislation and guidelines

R An adjustment in required CPD hours (now 6 to 18 hours annually depending on licence
category) linked to specific activities accredited by a professional body – such as the Financial
Planning Institute (FPI) – for CPD purposes
R A stricter approach to determining if individuals live up to the “honesty and integrity” provisions
(which now also include the term “good standing“)
R Significant modifications to the qualifying criteria for the regulatory exams
R Inclusion of FSPs and juristic representatives in the financial soundness criteria
R Introduction of a “liquidity calculation form”
R Greater emphasis on staff competency
R Splitting of products into two tiers which affect competency requirements (ie, Tier 2 products
are considered less complex and compliance requirements are less onerous, but collective
investments fall under Tier 1)
R The introduction of six new product categories
R Expanded requirements for companies offering automated advice
Many of the revised Fit and Proper Requirements impacted the training needs of KIs and
representatives.
Further amendments to the Fit and Proper Requirements (GN707) that were published on
26 June 2020 were primarily introduced to add a deeming provision for regulatory examinations and
to update classifications and definitions of insurance products. Terminology alignment with the new
Insurance Acts was a secondary effect of these changes.
One point worth noting is that the revised definition of a “CPD activity” stipulates that a professional
body may only approve an activity that is verifiable.

Duties of authorised FSPs and FSPRs
Once licensed, an authorised FSP has a number of duties and obligations. These are aimed
at ensuring that the FSP continues to meet the FAIS Act requirements and deals with clients in a
“fit and proper” manner.
Amongst the duties imposed by the Act, the FSP must:
R Appoint a compliance officer (unless there is only one “key individual” and no representatives
are employed)
R Maintain records for at least five years. These records must include:
„ Information about all premature cancellations of financial products (this applies to products
with a defined term, like endowments)
„ Details of all complaints received from clients, with information about how the complaint
was resolved
„ Details of any cases of non-compliance with the FAIS requirements, and reasons
for non-compliance
R Maintain full and proper accounting records, which should be updated continuously and
reconciled and checked on at least a monthly basis
R Prepare detailed annual financial statements according to generally accepted accounting
practice
Representatives (FSPRs) have specific duties and obligations in terms of the FAIS Act, and it
also places certain obligations on FSPs in relation to the FSPRs which they employ. In terms of the
FAIS Act:
R A representative must be able to provide confirmation to clients (ie, a certified documentation
from the FSP) which shows that the representative has a service contract with the FSP.
R It must be clear that the FSP accepts responsibility for the representative’s activities within the
scope of the service contract.

88 Profile’s Unit Trusts & Collective Investments September 2025