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FAIS Act FAIS Act and Subordinate Legislation
The Registrar has published a notice in the Government Gazette declaring a particular business practice undesirable. Mbali, a key individual at a Category II FSP that uses the practice, asks how quickly they must stop. What does the Act require?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) They have a 60-day period after publication to cease the practice and wind up affected procedures and client business.Correct
- b) They must cease the practice instantly on the date the notice is published, with no transitional period.
- c) They have a flat 7 days after publication to stop.
- d) They may ask the Registrar for a discretionary 30-day extension to keep using it.
Why this is the answer
Once a practice is declared undesirable by Gazette notice, the Act allows a 60-day period within which the FSP must cease it, giving time to wind down affected client matters in an orderly way. It is neither an instant cut-off nor a 7-day rule.
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