The new Fit and Proper Requirements have introduced regulatory examinations as part of the competence requirements.

Background on the regulatory examinations

In October 2008 the new FAIS Fit and Proper requirements were published in Gazette No. 21514. Specific reference should be made to Board Notice 103, 104, 105, 106 and 151. The new requirements have a significant impact on the financial services industry in that it requires all key individuals and representatives to successfully complete regulatory examinations based on their roles and the product sub-categories they are responsible for.

These regulatory examinations form part of the competence requirements, and consist of two levels:

Regulatory examinations Level 1: These regulatory examinations must be completed within 2 years of appointment or approval. People currently in the industry appointed or approved between 2004 and 2009 must complete these regulatory examinations successfully by 31 December 2011. People entering the industry from 2010 must complete these regulatory examinations successfully within two years of appointment / approval.

The content of these regulatory examinations are based on the regulatory framework and the regulatory role of the individual, for example the FAIS Act, Code of Conduct, FICA etc. Please refer to BN 105 Annexure 1 for more detailed information regarding the content. These regulatory examinations are compulsory and all representatives and key individuals are required to complete these regulatory examinations.

Regulatory examinations Level 2: These regulatory examinations are product specific regulatory examinations, and will focus on testing the applied knowledge of individuals in relation to the specific products that they provide financial services for. Please refer to BN 105 Annexure 1 for more detailed information regarding the content of each of these regulatory examinations.

The regulatory examinations will be made available during 2010 and the first regulatory examinations that will roll out will be the level 1 regulatory examinations, after which a phased approach will be followed to roll out all the level 2 regulatory examinations up to the end of 2010.

People can be exempted from writing the regulatory examination level 2 provided that they have completed a recognised qualification that have been recognised as “specific” for that particular product subcategory on the list of recognised qualifications – see Board Notice 64 of 2009.

Examination bodies
Examination Bodies have been delegated the function to develop deliver the regulatory examinations on behalf of the Financial Services Board (FSB) are:

The South African Institute of Financial Markets (SAIFM)
Leselo
The Financial Planning Institute (FPI)
Moonstone Information Refinery

The regulatory examinations that they will make available to the financial services industry are as follows:

Note: The matrix above can change where examination bodies apply for the delivery of additional examinations, subject to the approval by the Registrar.

Availability of the regulatory examinations 

It is anticipated that the regulatory examinations will be made available to the industry during 2010. Specific dates and details cannot be provided at this stage, but we urge you to please monitor the FSB website for new developments in this regard. All information regarding these regulatory examinations will be available on the FSB website as soon as the information becomes available and can be communicated.

These are exciting developments within the financial services industry! We therefore will make every attempt to keep the industry informed as much as possible, and that you, as an active member of the industry, will participate in the process of keeping abreast of all new developments as they happen, by monitoring the FSB website and the relevant Examination Body websites on a regular basis.