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Key Individual Role of the Key Individual in terms of the FAIS Act
An FSP appoints a new representative without checking her background. It later emerges that another FSP debarred her for dishonesty three months earlier. Which statement is correct?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) The FSP contravened the Act, because it must check fitness before appointing her.Correct
- b) The FSP contravened the Act only if she has caused a loss to one of its clients.
- c) The FSP did nothing wrong, because it is the Authority that vets each appointment.
- d) The FSP did nothing wrong, because a debarment binds only the FSP that imposed it.
Why this is the answer
An FSP must at all times be satisfied that its representatives are competent and comply with the fit and proper requirements, which requires proper checks before appointment. A debarred person may not be appointed by any FSP until the reappointment conditions, including a 12-month period, are met. The Authority does not vet representative appointments.
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