Page 88 - Profile's Unit Trusts & Collective Investments - March 2026

Chapter 5 Legislation and guidelines

R 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:
R A legal or accounting degree plus at least three years’ experience in financial services; or
R The compliance officer must have passed an industry-specific course recognised by the
FSCA (plus at least three years’ experience in financial services); or
R The compliance officer must already be appointed as a compliance officer according to the
provisions of any Act other than the FAIS Act; or
R 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
A key feature of the FAIS Act is that it requires all FSPs and representatives (and all “key individuals”)
to act in accordance with a rigorous code of conduct. Essentially, the code tries to ensure the highest
possible levels of professional conduct, integrity and transparency in the financial services industry.
The entire code is available on the FSCA website (www.fsca.co.za), and given the importance
of the code, it should be read and re-read by all FSPs, FSPRs and key individuals. It should be
noted that the conduct of financial advisers is also regulated by many other regulations and pieces
of legislation, depending on the area of speciality – the Code of Conduct does not encompass
everything with which an adviser must comply.
Some of the more important elements of the code are as follows:
R Financial advisers must act honestly and fairly at all times, exercising skill, care and diligence.
R 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.
R An FSP may not misrepresent the extent of any FSCA licence held and must disclose when
they advise on unregulated products that are not covered by their licence.
R They must act prudently (ie, be careful not to give reckless advice), and must avoid conflicts
of interests with clients.
R They must make sure that any information provided to clients is accurate and easy to
understand. Statements about past performance must be appropriate and product-relevant.
R FSPs must have systems in place to record written communications relating to financial
services rendered to a client, to store and retrieve such documentation and to keep
documentation safe from destruction.
R Financial advisers need to give clients certain prescribed particulars about the selected
product supplier and the business once a financial service has been rendered.
R They must tell clients about all material terms of any contracts or transactions so that clients
can make informed decisions. This includes information about commissions and incentives.
R Financial advisers must ascertain how well informed clients are, investigate each client’s
financial situation and explore each client’s needs and objectives before giving advice. This
is to ensure that advice is appropriate to each client’s particular circumstances. Where an
adviser is unable to identify a suitable product, the adviser must point this out to the client and
decline to recommend a product.
R If a client chooses not to follow the recommendation, the adviser must point out the risk of
doing so.
R They need to keep records of all advice given to clients.
R Where an FSP receives or holds financial products or funds on behalf of a client, these assets
must be properly and promptly accounted for and must be kept separate from any assets of
the FSP.

86 Profile’s Unit Trusts & Collective Investments March 2026