All RE5 questions
Fit & Proper FSP License (Fit & Proper/Operational Ability)
Mr. Khumalo, a Representative, was recently declared insolvent due to personal business failure. According to the Fit and Proper requirements, which core requirement is directly impacted by this event?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Competence, due to a lack of business skill.
- b) Operational Ability, due to personal debt.
- c) Honesty and Integrity, due to failure to pay debt.
- d) Financial Soundness, due to the inability to meet obligations.Correct
Why this is the answer
The Fit and Proper requirements (FAIS Act, Sec 8(1)(b)) mandate that Representatives must be 'Financially Sound'. Insolvency (being declared unable to meet one's financial obligations) is a direct contravention of this specific requirement.
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