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Fit & Proper FSP License (Fit & Proper/Operational Ability)
A representative is convicted of fraud for falsifying invoices in a family business that has nothing to do with financial services. His FSP's clients were never affected. What must the FSP do?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Report the conviction to the Ombud, which decides whether he may continue as a representative.
- b) Place him under supervision for 12 months, after which his fit and proper status is restored.
- c) Debar him, because he no longer meets the honesty and integrity requirement, whatever the context of the fraud.Correct
- d) Nothing, because conduct outside the financial services business falls outside the Fit and Proper requirements.
Why this is the answer
Honesty, integrity and good standing concern the person's character, not the setting in which it is shown. A fraud conviction is prima facie evidence that the requirement is not met, and an FSP must debar a representative who no longer complies. Supervision addresses competence gaps, not dishonesty, and the Ombud has no role in fitness decisions.
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