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FAIS Act FAIS Act and Subordinate Legislation

Before rendering a financial service, what must a representative be able to provide to a client under section 13 of the FAIS Act?

RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.

  1. a) A certificate issued by the Authority confirming that it has approved his appointment as a representative.
  2. b) Confirmation from the product supplier that he is authorised to market its financial products.
  3. c) Confirmation, certified by the FSP, that a mandate exists and that the FSP accepts responsibility.Correct
  4. d) A copy of his own FSP licence, since each representative is licensed for the products he sells.

Why this is the answer

A person may not act as a representative unless he can provide clients with confirmation, certified by the FSP, that a service contract or other mandate exists and that the FSP accepts responsibility for the activities he performs within its scope. Representatives are appointed by the FSP, not approved or licensed by the Authority, and a supplier's authority is not what the Act requires.

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