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FAIS Act FAIS Act and Subordinate Legislation
Mandla is a registered representative of Ubuntu Advisers (an authorised FSP). He issues quotations and concludes business with clients on the letterhead of 'Mandla Consulting', which does not mention Ubuntu at all. 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) He complies with the Act, because his registration with Ubuntu authorises him to trade under any name he chooses.
- b) He contravenes the Act, because a representative may act only in the name of the FSP he represents.Correct
- c) He contravenes the Act only if 'Mandla Consulting' is a registered company and not merely a trading name.
- d) He complies with the Act, provided his clients are told verbally at some point that he is linked to Ubuntu.
Why this is the answer
A person may not render financial services, or contract in respect of financial services, other than in the name of the FSP of which that person is a representative. Clients must know which licensed provider stands behind the service. A verbal mention does not cure contracting in another name, and the legal form of the other name is irrelevant.
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