FAIS Act

Also known as: Financial Advisory and Intermediary Services Act, FAIS, Act 37 of 2002

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

The FAIS Act (Act 37 of 2002) is the cornerstone legislation of the RE5 exam. It regulates the rendering of financial advice and intermediary services to clients, and exists to protect consumers of financial products.

The Act introduced licensing of Financial Services Providers (FSPs), the appointment of representatives and key individuals, the requirement to meet Fit and Proper standards, and the General Code of Conduct. It also created the Office of the FAIS Ombud to resolve client complaints.

Almost every RE5 question traces back to the FAIS Act or its subordinate legislation, so understanding its structure — definitions, duties, codes and enforcement — is the foundation of passing the exam.

Related terms

Financial Services Provider (FSP)A person or business licensed by the FSCA to furnish financial advice and/or render intermediary services.RepresentativeA person who renders a financial service to clients on behalf of an FSP — the role the RE5 exam qualifies you for.Key IndividualA person responsible for managing or overseeing the financial services activities of an FSP.General Code of ConductThe binding code that sets out how FSPs and representatives must behave towards clients — fairness, disclosure and suitable advice.FSCAThe Financial Sector Conduct Authority — the market-conduct regulator that licenses and supervises FSPs.

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