RegulatoryExams

RE5 & FAIS Glossary

The RE5 syllabus is full of regulatory jargon. Here are clear, plain-English definitions of the FAIS, FICA and FSCA terms you’ll be tested on — from FSP and Key Individual to Fit and Proper and Debarment.

CDFGKR

C

Complaint

A specific grievance from a client about a financial service, which an FSP must handle through a defined process.

Conflict of Interest

Any situation where an FSP or representative’s interest may influence the objective advice given to a client.

Continuous Professional Development (CPD)

Ongoing learning that representatives and key individuals must complete each year to stay competent and Fit and Proper.

D

Debarment

The process by which a representative or key individual is barred from rendering financial services for failing to meet legal or Fit and Proper standards.

F

FAIS Act

The Financial Advisory and Intermediary Services Act, 2002 — the law that governs financial advice and intermediary services in South Africa.

FAIS Ombud

The independent office that resolves client complaints against FSPs informally, fairly and at no cost to the complainant.

FICA

The Financial Intelligence Centre Act — anti-money-laundering law requiring client identification, record-keeping and reporting.

Financial Services Provider (FSP)

A person or business licensed by the FSCA to furnish financial advice and/or render intermediary services.

Fit and Proper Requirements

The minimum standards of honesty, competence and financial soundness that FSPs, key individuals and representatives must meet.

FSCA

The Financial Sector Conduct Authority — the market-conduct regulator that licenses and supervises FSPs.

G

General Code of Conduct

The binding code that sets out how FSPs and representatives must behave towards clients — fairness, disclosure and suitable advice.

K

Key Individual

A person responsible for managing or overseeing the financial services activities of an FSP.

Know Your Customer (KYC)

The FICA process of identifying and verifying who your client is before doing business with them.

R

Record-Keeping

The legal duty to keep records of advice, transactions and client information for the prescribed period (generally five years).

Representative

A person who renders a financial service to clients on behalf of an FSP — the role the RE5 exam qualifies you for.

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