A recent FAIS Notice has provided much-needed hope for would-be appointees as representatives who has yet to resolve previous insolvency issues
FSCA FAIS Notice 89 of 2021 contains details of the outcome of a recent exemption application relating to BN194 Sec 40(1)(a)(i):
In this application for an exemption of the above, which was granted, a number of conditions are listed, such as disclosing this exemption to clients and that the representative may not hold/control/have access to client assets or premiums.
In addition, the appointment must not contravene Sec 40(1)(c), which reads:
(c) such appointment does not-
(i) materially increase any risk to the FSP or to the fair treatment of its clients;
(ii) materially impair the quality of the governance framework of the FSP, including the FSP’s ability to manage its risks and meet its legal and regulatory obligations;
(iii) compromise the fair treatment of or continuous and satisfactory service to clients;
(iv) prevent the FSP from acting in the best interests of its clients; or
(v) result in key decision making responsibilities being removed from the FSP.
Please note that this is not a carte blanche exemption for all unrehabilitated insolvents.
The FSCA will handle each application on its own merits. What this notice does is to provide some insight into a successful application and possible conditions imposed, should it be successful.
Thanks to Moonstone’s ever alert Compliance division for extracting this important information.
