Financial Advisory and Intermediary Services Act, 37 of 2002

FAIS

FAIS – Financial Advisory and Intermediary Services Act, 37 of 2002 (‘the Act’). As a registered financial service provider, Monitor Administrators is subject to the Act.

The act

The primary aim of the Act is to protect you, our client, against improper conduct by financial service providers (FSPs).
The Act makes provision for FSPs to be licensed and authorised through a government-appointed regulatory body, the Financial Sector Conduct Authority (FSCA, previously known as the Financial Services Board or FSB). The FSCA will provide you with the right of recourse should the FSP not comply with the Act.
The FSCA regulates members of the industry in the way they provide advice, as well as related intermediary services such as processing your insurance claims, in terms of certain financial products as defined by the Act.
The FSP’s licence must be prominently displayed.
The Act allows for an FSP to employ a representative under contract, to render services or give advice relating to a financial product. Representatives are not required to be licensed individually, but because they are employed by a licensed FSP, they are required to comply with certain ‘fit and proper’ requirements.
FSP’s are managed by key individuals, who bring both technical competence in a particular financial product category and managerial skills to their organisations.

FSP’s with multiple key individuals or representatives are required to appoint a compliance officer, who has a set of responsibilities in terms of the Act to ensure that their organisations adhere to certain basic principles when rendering services in respect of financial products. These principles contain provisions relating to the following basic categories of information:

Adequate disclosure of relevant material information to you
Disclosure of actual and potential own interests to you
Adequate and appropriate record keeping
Avoidance of fraudulent and misleading advertising, canvassing and marketing
Proper safekeeping, separation and protection of your funds and transaction documents
Suitable and adequate guarantees, professional indemnity or fidelity insurance cover.

The Office of the Ombud for Financial Services Providers (‘FAIS Ombud’) was established by the FAIS Act. The FAIS Ombud’s role is to resolve disputes between financial services providers and their clients in a procedurally fair, informal, economical and expeditious manner.

The FAIS Ombud‘s jurisdiction is limited to violations which occurred on or after 30 September 2004 and to claims not exceeding R800 000.00.