Under the old dispensation, Continuous Professional Development (CPD) was the third leg of the journey towards becoming a true professional, after successfully completing the level 1 and 2 regulatory examinations.
Now that the level 2 REs have been replaced by line of business and product specific training under the new Fit and Proper requirements, CPD is a current reality, especially for those who benefit from the grandfathering clause in terms of qualifications.
Who needs to do CPD?
The fit and proper requirements relating to CPD apply to all FSPs, key individuals and representatives except the following:
| (a) | a Category I FSP, its key individuals and representatives that are authorised, approved or appointed only to render financial services or manage or oversee financial services in respect Long-term Insurance subcategory A and/or Friendly Society Benefits; | |
| (b) | a representative of a Category I FSP that is appointed to only – | |
| (i) | render a financial service in respect of a Tier 2 financial product; and/or | |
| (ii) | render an intermediary service in respect of a Tier 1 financial product, including “execution of sales”. | |
General requirements
| (1) | A FSP, key individual and representative must – | |||
| (a) | maintain the required competence to render or manage or oversee the financial services for which the FSP, key individual and representative are authorised, approved or appointed; | |||
| (b) | comply with the prescribed minimum CPD requirements; | |||
| (c) | ensure that the type and combination of CPD activities undertaken – | |||
| (i) | are relevant to the functions and role of the FSP, key individual and representative; | |||
| (ii) | contributes to the skill, knowledge, expertise and professional and ethical standards of the FSP, key individual and representative; | |||
| (iii | addresses any identified needs or gaps in – | |||
| (aa) | the technical knowledge of the FSP, key individual and representative; | |||
| (bb) | the generic knowledge and understanding of the environment in which the financial service is rendered or managed or overseen; and | |||
| (cc) | the knowledge and understanding of applicable laws; and | |||
| (iv) | adequately takes into account changing internal and external conditions relevant to the classes and subclasses of business, the category of financial services and the financial products for which the FSP, key individual or representative is authorised, approved or appointed. | |||
| (2) | A FSP must establish and maintain policies and procedures on CPD that include: | |||
| (a) | how the FSP, key individual and representative will – | |||
| (i) | maintain knowledge and skills that are appropriate for their activities and responsibilities; | |||
| (ii) | update their knowledge and skills; and | |||
| (iii) | develop new knowledge and skills to assist with their current functions and responsibilities or functions contemplated in the future; | |||
| (b) | training plans for each CPD cycle to ensure that CPD – | |||
| (i) | is relevant and appropriate for the authorisation, approval and appointment of the FSP, key individual and representative; | |||
| (ii) | addresses any identified needs, knowledge and skills gaps; and | |||
| (iii) | continually improves the professional standards and practices of the FSP, its key individuals and representatives. | |||
| (3) | An FSP must – | |||
| (a) | within 30 days after the expiry of each CPD cycle, record in the competence register the – | |||
| (i) | CPD activities of the FSP, its key individuals and representatives; and | |||
| (ii) | reduction of CPD hours of a representative as indicated below; | |||
| (b) | calculate the total number of CPD hours completed by each person referred to in (a) as at the end of each CPD cycle; | |||
| (c) | obtain and retain relevant supporting evidence of the CPD activities recorded in the competence register; | |||
| (d) | record the dates of, reasons for and retain supporting evidence for, any decision of the FSP to reduce CPD requirements in accordance with section 34; and | |||
| (e) | retain the evidence referred to in (c) and (d) for a period not less than five years from the end of the CPD cycle concerned. | |||
The Fit and Proper Requirements also list the minimum CPD hours required, and conditions under which such hours may be reduced.
The effective date for CPD is 1 June 2018. We suggest that you study the relevant section in the 2017 Fit and Proper Determination to assess the impact on your business and what is required of you.
There can be little doubt that these stringent requirements, coupled with similar record keeping demands under the competency requirements, including training, will add yet another layer of costs to an already over-burdened industry, which will inevitably trickle down to clients.
A far bigger concern is how many more of the straws that we know are coming, this camel’s back can handle.
