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Organizational Structure FAIS Act Compliance
What is the primary purpose of a **mandate agreement** between an FSP and its Representative?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) To formally define the scope of authority and specific financial services the Representative is permitted to render on behalf of the FSP.Correct
- b) To replace the need for the FSP to have a license.
- c) To set the commission rates the Representative will earn from Product Suppliers.
- d) To bypass the FAIS Act's compliance requirements.
Why this is the answer
A mandate is a crucial internal document. It is the formal agreement that defines the boundaries of the Representative's 'scope of authority', detailing exactly which product categories and services they are competent and authorized to provide on behalf of the FSP.
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