FAIS Information Circular 9 of 2012 was published on 11 June to provide greater clarification on Board Notice 102 of 2012.
The latter document contains details of certain categories of candidates who are exempt from completing the level 1 REs before 30 June this year. Those who qualify should apply for the exemption before the end of June.
The following persons are temporarily exempted from having to write the Level 1 Regulatory Examination (Level 1 examination) by 30 June 2012:
a) A representative who is employed or mandated by an authorised financial services provider to render financial services in respect of a policy as defined in paragraph 1 of the Notice only.
b) A financial services provider, its key individuals and representatives who render financial services to or for or on behalf of a private equity fund as defined in paragraph 1 of the Notice only.
c) A financial services provider, its key individuals and representatives who render financial services as an underwriting manager as defined in regulation 6.1 of the Regulations under the Long-term Insurance Act, 1998, and the Regulations under the Short-term Insurance Act, 1998, only.
When one studies the details in the Board Notice relating to the above, it becomes evident that identifying those who are affected, is anything but simple. The exemptions are aimed at candidates operating in sectors where there is concern that many will not pass the current level 1 REs. It is questionable whether they will be able to decipher all the restrictions and requirements contained in the Board notice.
Those who are private equity fund managers or underwriting managers may find it slightly easier. If you operate under Licence Category B1 or B2, it becomes more difficult. It gets even more complicated when you decipher the Short-term personal lines requirements, hence our advice on Monday to approach your compliance officer or product provider for clarity.
We received numerous calls from desperate candidates who saw this as a lifeline to postpone having to write the exams. In order to help candidates, we would need to know full details of each and every product they sell, which is impossible. There are too many variables, including the fact that they may sell more than one product, one of which does not qualify under the exemption, which of course means that they then have to write the exam. Advising candidates is simply too big a risk for us, given the complexity of the definitions in the Board Notice.
We believe that many will follow the safe route of applying for the exemption, leaving the decision to the Regulator. Given the short notice, it will be impossible for the FSB to react before the deadline, particularly with the final date for registration (to write before the end of June) being tomorrow, 15 June.
Those who do qualify will be all right, as the new “bespoke” exam for them still has to be developed, but what about those who applied but do not qualify? It appears that they will then be regarded as not being competent for having failed to pass the level 1 regulatory exam, and be debarred.
If you are registered to write before the end of June, it is possibly wise to do so, for three reasons:
- Even if you fail, you will buy yourself time in terms of being able to rewrite before the end of September
- Although the circular does not say so, one must assume that passing the current RE will exempt you from the new one developed for this sector
- You may as well capitalise on the opportunity for growth afforded by your studies by testing your insight in the real arena.
