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Key Individual Role of the Key Individual in terms of the FAIS Act
The sole key individual of a company FSP dies unexpectedly. The company continues to trade. 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) The licence lapses, because the death of a key individual has the same effect as the death of a licensee.
- b) The licence does not lapse, but the FSP must notify the Authority and have a replacement approved.Correct
- c) The licence is unaffected, and the board may run the financial services business until the next annual compliance report.
- d) The licence passes to the most senior representative, who becomes key individual automatically.
Why this is the answer
A licence lapses on the death of a licensee who is a natural person; here the licensee is the company, which still exists. But an FSP must have an approved key individual, must inform the Authority of the change, and nobody may manage or oversee the financial services business without approval. Without a replacement the Authority may suspend or withdraw the licence.
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