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Code of Conduct Adhere to the specific Codes of Conduct
An FSP's standard client agreement includes this clause: 'The client agrees that the provider is not bound by the disclosure and suitability provisions of the General Code in respect of this mandate.' A client signs it. What is the effect of the clause?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) It is null and void, and the provider breached the Code by including it.Correct
- b) It is valid, because the client accepted it in a signed written agreement.
- c) It is voidable, so it stands unless the client later asks a court to set it aside.
- d) It is valid for clients who are juristic persons, but void for natural persons.
Why this is the answer
No provider may request or induce a client to waive any right or benefit conferred by the Code, or recognise, accept or act on such a waiver, and any such waiver is null and void. It does not matter that the waiver sits in a signed contract or who the client is, and no court order is needed to make it ineffective.
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