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FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT
QUALIFICATIONS, EXPERIENCE AND CRITERIA FOR APPROVAL AS COMPLIANCE OFFICER
[Updated to 13 April 2017]
BN 127, G. 33537 (c.i.o 9 September 2010),
BN 136, G. 32293 (c.i.o 15 August 2012),
BN 269, G. 37168 (c.i.o 20 December 2013),
BN 77, G. 38665 (c.i.o 31 March 2015),
BN 51, G. 40785 (c.i.o 13 April 2017).
I, Dube Phineas Tshidi, Registrar of Financial Services Providers, hereby determine under section 17(1)(b) and (2)(a) of the Financial Advisory and Intermediary Services Act, 2002 (Act 37 of 2002), after consultation with the Advisory Committee on Financial Services Providers, the qualifications, experience and criteria for approval as compliance officer, as set out in the Schedule.
(Signed)
DP Tshidi,
Registrar of Financial Services Providers
QUALIFICATIONS, EXPERIENCE AND CRITERIA FOR APPROVAL AS COMPLIANCE OFFICER
In this Schedule “the Act” means the Financial Advisory and Intermediary Services Act, 2002 (Act 37 of 2002), any word or expression to which a meaning has been assigned in the Act, read with the definition of “this Act” in section 1(1) of the Act, shall have that meaning and, unless the context otherwise indicates—
“applicant” means the natural person applying to the Registrar for approval as a compliance officer, including the natural person appointed by the compliance practice to render compliance services in respect of a particular provider;
“application form” means Forms 6 and 13 of the Application by Financial Services Providers for Authorisation by the Financial Services Board, Board Notice 60 of 2009, in Gazette 32227 of 15 May 2009;
“compliance officer” means—
(i) a natural person appointed to render compliance services, including a natural person appointed by a compliance practice; or
(ii) a compliance practice appointed to render compliance services, and approved, on application, by the Registrar for such purpose;
“compliance practice” means a company, close corporation or partnership that appoints one or more natural persons to render compliance services in respect of a particular provider and such natural persons are approved by the Registrar for that purpose as compliance officers;
“compliance services” means the performance by a compliance officer of functions contemplated in section 17 of the Act;
“continuous professional development” or “CPD” means a process of ongoing learning and development, with the aim to enable the compliance officer to maintain the required competencies to render compliance services competently;
“external compliance officer” means a compliance officer other than an internal compliance officer and includes a compliance practice;
“generic recognised compliance qualification” means a qualification recognised by the Registrar that addresses knowledge, skills and competence that are broadly applicable to the rendering of compliance services;
“internal compliance officer” means a compliance officer that is a natural person in the permanent employ of a financial services provider and that renders compliance services in respect of that particular provider or another financial services provider that is a subsidiary, holding company or subsidiary of the holding company, of the first-mentioned provider;
“list of recognised compliance qualifications” means the qualifications recognised by the Registrar as either generic recognised compliance qualifications or specific recognised compliance qualifications and published by notice in the Gazette as part of Annexure 2;
“Phase I approval” means the approval by the Registrar of, inter alia, an applicant’s qualifications, experience and personal character qualities of honesty and integrity;
“Phase II approval” means the approval granted by the Registrar to an applicant to render compliance services to a specific provider;
“qualifying criteria” means the qualifying criteria in Annexure 1;
“regulatory examination” means the examination determined by the Registrar subject to the qualifying criteria, after consultation with the Advisory Committee;
“specific recognised compliance qualification” means a qualification recognised by the Registrar that addresses specific and/or specialized knowledge, skills, and competence applicable to the compliance function.
(1) An applicant and compliance practice must apply on the application forms to the Registrar for Phase I and Phase II approvals.
(a) The entities that may apply for approval as a compliance practice are—
(i) a partnership of which all the partners are natural persons who are themselves approved compliance officers;
(ii) a company or close corporation that is incorporated and registered in terms of applicable legislation, and of which only individuals who have Phase 1 approval are directors and members of the company or close corporation.
(b) Where a member of a close corporation dies, the estate of the member may continue to hold the relevant interest for a period of six months as from the date of the death or for such longer period as the Registrar may approve.
(c) Where a member of a close corporation ceases to conform to any requirement of this subparagraph, the member may continue to hold the relevant interest for a period of six months as from the date on which the member ceases so to conform or for such longer period as the Registrar may approve.
(3) If the Registrar is satisfied that the applicant or compliance practice complies with the criteria for—
(a) Phase I approval, the Registrar must grant Phase I approval and issue an approval number on payment of the prescribed fee;
(b) Phase II approval, the Registrar must grant Phase II approval on payment of the prescribed fee.
(4) No person may render compliance services without having obtained Phase I and Phase II approvals, except for the persons referred to in paragraph 8(2)(a)(i) and (ii).
(1) An applicant must—
(a) hold a qualification on the list of recognised compliance qualifications;
(b) have passed the regulatory examination;
(c) have at least three years’ experience in performing a compliance or risk management function;
(d) comply with the same requirements determined by the Registrar under section 8(1)(a) of the Act in respect of personal character qualities of honesty and integrity;
(e) have at least one year’s experience in performing a compliance or risk management function in respect of the specific category of providers the applicant seeks to obtain approval to render compliance services;
(f) not be an unrehabilitated insolvent, have entered into a compromise with creditors or have been provisionally sequestrated or liquidated; and
(g) have adequate access to communication facilities, including at least a telephone or cell phone service and typing and document duplication facilities.
(2) A person applying for approval as an external compliance officer must—
(a) have a fixed business address;
(b) maintain the operational ability to render compliance services efficiently, including—
(i) adequate storage and filing systems for the safe-keeping of records, business communications and correspondence;
(ii) control structures, processes and procedures with reference to—
(aa) segregation of duties where such segregation is appropriate from an operational risk mitigation perspective;
(bb) control of access to the premises;
(cc) access rights and data security on electronic data;
(dd) physical security of the compliance officer’s records;
(ee) business policies and controls;
(ff) system application testing;
(gg) disaster recovery and back-up procedures on electronic data;
(hh) a business continuity plan.
(3) Individuals referred to in paragraph 2(2)(a) must—
(a) comply with the same requirements determined by the Registrar under section 8(1)(a) of the Act in respect of personal character qualities of honesty and integrity;
(b) not be an unrehabilitated insolvent, have entered into a compromise with creditors or have been provisionally sequestrated or liquidated.
(1) An applicant and compliance practice must have Phase I approval.
(2) The Registrar must be satisfied that an applicant and compliance practice have—
(a) adequate resources available to ensure the efficient rendering of compliance services; and
(b) direct access to, and demonstrable support from, the senior management of the provider.
(3) The Registrar must be satisfied that an applicant and compliance practice will be able to—
(a) render compliance services independently and objectively;
(b) avoid conflicts of interest in the rendering of compliance services;
(c) keep records and supporting documentation of activities undertaken in the course of compliance reviews, visits or monitoring;
(d) assist the provider in the compilation of an appropriate compliance risk management strategy as part of the provider’s overall risk management strategy;
(e) liaise directly with the Registrar; and
(f) conduct regular reviews of financial services rendered by the provider and any representative.
(4) The Registrar must be satisfied that—
(a) an applicant and compliance practice who applied for approval as an external compliance officer are able, in respect of—
(i) categories I and IV providers, to conduct regular visits to the business premises, business units and/or branches of the provider. The intervals of such visits may not be less than once a quarter and in respect of representatives of the provider, twice a year;
(ii) categories II, IIA and III providers, to conduct regular visits to the business premises, business units and branches of the provider and any representative. The intervals of such visits may not be less than once a month;
(b) an applicant who applied for approval as an internal compliance officer is able in respect of—
(i) categories I and IV providers, to conduct regular visits to the business premises, business units and branches of the provider and any representatives, and the intervals of such visits may not be less than once a year;
(ii) categories II, IIA and III providers, to conduct regular visits to the business premises, business units and branches of the provider and any representative, and the intervals of such visits may not be less than once a quarter;
(c) an applicant and compliance practice be able to provide the provider with reports at intervals not less than the intervals referred to in subparagraphs (a) and (b) on the rendering of financial services, including the making of a recommendation to the provider regarding the rendering of compliance services.
(5) An applicant and a compliance practice must ensure that the number of clients allocated to any applicant or compliance officer representing such practice, are at all relevant times sufficient to ensure the rendering of proper and appropriate compliance services to such clients.
A compliance officer and the individuals referred to in paragraph 2(2)(a) must comply with the CPD requirements as determined by the Registrar by notice in the Gazette from time to time.
(1) A person may, in the form and manner determined by the Registrar by notice in the Gazette, apply to the Registrar for recognition of a generic compliance qualification or a specific compliance qualification.
(2) A qualification, subject to paragraph 7, will be recognised by the Registrar based on the extent to which the qualification addresses the qualifying criteria.
(3) The list of recognised compliance qualifications is published in Annexure 2.
(1) A qualification, to be recognised as a specific qualification, must be—
(a) a qualification registered by SAQA; or
(b) an extracurricular specialist programme offered at a post-graduate level by an Institution of Higher Education.
(2) A qualification referred to in subsection (1) must—
(a) in respect of non-unit standards based qualifications, the qualification must corresponds with at least 80% of the qualifying criteria; or
(b) in respect of unit standards based qualifications, at least 80% of the relevant qualifying criteria is met by the core and elective unit standards of the qualification.
(3) A qualification, to be recognised as a generic qualification, must be—
(a) a qualification registered by SAQA;
(b) an extracurricular specialist programme offered at a post-graduate level by an Institution of Higher Education;
(c) an industry or professional programme offered through a professional body recognised by the Registrar or an accredited training provider; or
(d) a foreign qualification that is similar to a qualification referred to in subparagraphs (a) to (c).
(4) A qualification referred to in subsection (3) must—
(a) in respect of non-unit standards based qualifications, the individual must have successfully completed a minimum of three subjects listed in Table A and at least one of the subjects must be—
(i) in the field of commerce, corporate governance or law; and
(ii) a major subject; on final year level, where applicable; or
(b) in respect of unit standards based qualifications, at least 60% of the qualifying criteria is met by the core and elective unit standards of the qualification.
Table A: Subjects