Page 87 - Profile's Unit Trusts & Collective Investments - March 2026

Legislation and guidelines Chapter 5

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.
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.
In turn, the FSP must be satisfied that all representatives in its employ (and this includes “key
individuals” of the FSP if the latter is also a firm) are competent to provide the services offered by the
FSP. While representatives must comply with the Fit and Proper Requirements, the FSP must also
take some responsibility, in terms of the Act, for ensuring that FSPRs comply with the FAIS Code of
Conduct and the internal rules of the FSP. FSPs must maintain registers of representatives and key
individuals, which must be regularly updated and be available to the Registrar.
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 the FAIS
Act. 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:
R Function independently and objectively
R Have personal characteristics of honesty and integrity
R Have a thorough knowledge of FAIS legislation
R Ensure proper compliance monitoring
R Enjoy the support of senior management

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