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FAIS Act FAIS Act and Subordinate Legislation
A Category I FSP, 'Growth Capital (Pty) Ltd,' decides it wants to start managing clients' investment portfolios on a discretionary basis (Category II). Which regulatory action is mandatory before they can legally offer this new service?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Submit a new annual compliance report to the FSCA.
- b) Update their internal Conflict of Interest Management Policy.
- c) Appoint an additional Key Individual.
- d) Apply to the FSCA for a variation of their license to include Category II.Correct
Why this is the answer
According to the FAIS Act (Sec 8(2)), an FSP must comply with the conditions of its license. Rendering services in a category for which it is not licensed (like a Cat I FSP moving to Cat II) is prohibited. The FSP must first apply to the FSCA for a variation (or change) of its license.
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