Fit-and-Proper 2018: Educational requirements in a nutshell

Board Notice 194 of 2017 addresses some of the following Fit-and-proper requirements, regarding Product training, class-of-business and Continuous Professional Development (CPD), effective from 01/05/2018, see table below.

Industry professionalisation: One of the hallmarks of a profession is a high standard of competence by members. The legislating of product training provides a second layer of approval, offering the profession more in-depth proficiency and knowledge of their products.

Class of Business: Class of business training refers to training that focuses on general product category knowledge in relation to the line of business. To assure the quality thereof, the proposed legislation suggests that only an accredited provider or educational institutions can provide class of business training.

Improved levels of consumer protection: One of the largest benefits of continued competence of FSPs, KIs and representatives is consumer protection. In theory, financial advisors who maintain their competence through accredited CPD activities are less likely to omit important information or missell products to their clients.

Qualification means a‑

  1. qualification as defined in the NQF Act, excluding a part qualification as defined in that Act, that is offered by an education institution or an accredited provider;
  2. professional programme; or
  3. foreign qualification or foreign professional programme that has been evaluated by SAQA as being equivalent to a qualification or programme referred to in paragraphs (a) and (b) above.

General requirement

  1. An FSP, a key individual and a representative must have a qualification recognised by the Registrar in terms of section 24.

Recognition of qualifications

  1. 24.qualification as appropriate for
    1. each of the categories of FSPs;
    2. representatives in each of the categories of FSPs;
    3. key individuals in each of the categories of FSPs; or
    4. different types of financial services and financial products.

(2) The following criteria must be considered by the Registrar in assessing the appropriateness of a qualification:

(a) it must provide a person with the relevant, abilities, knowledge and skills based on an appropriate curriculum framework containing a body of knowledge and learning outcomes that is necessary for the person to discharge his or her responsibilities under the Act;

(b) the curriculum, body of knowledge and learning outcomes referred to in (a) must be quantitatively and qualitatively relevant to the role of and functions to be performed by the person under the Act.

(c) in the case of a non-unit standards based qualification

(i)   it must contain at least three modules/subjects that appear in the Appropriate Subject List in Table 1 in Annexure Two;

(ii)   where the qualification is at Certificate or Diploma level and it provides for major subjects, at least one of the subjects referred to in subparagraph (i) must be a major subject at final year level; and

(iii)  where the qualification is at Degree level, at least one of the subjects referred to in subparagraph (i) must be a major subject at final year level;

(d) in the case of a unit standards based qualification, the core and elective unit standards must relate to at least three modules/subjects that appear in the Appropriate Subject List in Table 1 in Annexure Two; and

(e) for purposes of a Category II, IIA or Ill FSP and a key individual, or representative of such FSP, the qualification must be at degree level.

An application for recognition of a qualification must be submitted in the form and manner determined by the Registrar.

 

At INTEGRITY ACADEMY, we can assist you with all of the above, accept the Product specific training, which needs to be done by the Financial Services Provider (FSP). Please take into account that although there is leniency with regards to the qualification completion period, as a Training Provider we recommend that you start as soon as possible. Some Financial Planners take up to 2 years to complete the qualification. We need at least 3 months to finalise all the INSETA requirements. This includes assessment, moderation and final verification done by INSETA. Once this process is complete INSETA needs to approve the process and we can only then upload the results. Once it is uploaded we then request the Certificate from INSETA, which could take a further two-six weeks.

Section in Notice

Effective Date

Section 13(3) - FSP recording obligations and (5) – establishment of a competence register.

1 May 2018

Section 29(1)(a) – Class of Business training

1 August 2018

Section 29(1)(b) – Product Specific training

1 May 2018

Section 29(2) – KI class of business training

1 August 2018

Section 31 – 34 – Continuous Professional development

1 June 2018

Section 38 – Automated advice requirements

1 May 2018

Sections 44(1) and (2): 45: 48 and 49 - Financial soundness, but only insofar as it relates to a juristic representative

1 March 2019