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Key Individual Role of the Key Individual in terms of the FAIS Act
The sole key individual of an FSP takes a six-month sabbatical abroad and cannot be contacted. The representatives carry on advising clients as usual. 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 FSP lacks the oversight the Act requires, and needs another approved key individual in place.Correct
- b) The arrangement is acceptable for up to twelve months, after which approval lapses.
- c) The arrangement is acceptable, because the key individual remains approved while he is away.
- d) The arrangement is acceptable, provided the most senior representative acts in his place.
Why this is the answer
A key individual must actually manage or oversee the financial services business, which is part of the operational ability the FSP must maintain. An approval that exists on paper while nobody oversees the representatives does not satisfy the requirement, and an unapproved person may not step into the role, however senior.
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