Good Standing and Integrity Quiz

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Questions and Answers

What is one requirement for a person to be considered as having integrity?

They must possess honesty and integrity. (correct)

They have never faced any legal issues.

They need to have a clear credit history.

They should have a background in finance.

Which of the following constitutes prima facie evidence that a person is NOT in good standing?

Being an active member of a professional organization.

Having a civil matter that was resolved positively.

Previous judgments that have not been rescinded. (correct)

Possessing a spotless academic record.

Which offense is NOT considered when determining if a person is in good standing?

A violation of traffic laws (correct)

Fraud

Theft

Negligent conduct

What role does the Commissioner have in assessing a person's good standing?

They may refer to any information in their possession. Signup and view all the answers

Which of the following best describes 'misrepresentation' in relation to good standing?

Providing misleading information intentionally. Signup and view all the answers

What is a necessary condition for appointing a representative for an FSP?

The representative must possess sufficient operational ability and financial resources. Signup and view all the answers

Which of the following is NOT a concern when appointing a representative for an FSP?

Ensuring the representative is overqualified for their role. Signup and view all the answers

What must an FSP ensure regarding the remuneration of its representatives?

It must be reasonable and commensurate with actual activities. Signup and view all the answers

What restriction is placed on representatives regarding the outsourcing of activities?

Representatives may not outsource or sub-delegate any activities related to the services they perform on behalf of the FSP. Signup and view all the answers

What is a requirement for representatives in terms of education?

They must have a recognized qualification as per the Board Notice applicable to their registered product categories. Signup and view all the answers

Which department within the FSCA is responsible for the administration of the Financial Advisory and Intermediary Services Act?

FAIS Division Signup and view all the answers

What is one of the roles of the Registration department within the FAIS?

Updating the central representative register Signup and view all the answers

What is the primary aim of the FAIS as outlined in the content?

To professionalize the financial services industry Signup and view all the answers

Which function does the Compliance department perform within the FAIS?

Debarment of representatives Signup and view all the answers

Which department follows up on financial statements and compliance reports after licenses are issued?

Supervision Signup and view all the answers

What action does the Enforcement department take regarding debarments?

Updating debarments in the central register Signup and view all the answers

What type of complaints does the Compliance department handle?

Complaints involving registered FSPs Signup and view all the answers

Which department is responsible for liaising with the Finance Department of the FSCA regarding levy collection?

Registration Signup and view all the answers

What is one of the responsibilities of a Compliance Officer in the context of the FAIS Act?

Monitoring compliance with legal standards Signup and view all the answers

Which of the following is NOT a requirement for maintaining an FSP license?

Preservation of personal client records Signup and view all the answers

What consequence does a Representative face if their accreditation is suspended under the Medical Schemes Act?

They must cease all financial services activities. Signup and view all the answers

What defines 'undesirable practices' in the context of the FAIS Act?

Practices that benefit the Representative over the client Signup and view all the answers

What is an implication for a Representative if the Registrar deems their business practice undesirable?

They could have their license revoked. Signup and view all the answers

Which of the following describes the role of a Key Individual according to the FAIS Act?

Ensuring compliance with regulatory frameworks Signup and view all the answers

Which action would be considered a violation of regulations regarding undesirable practices?

Offering commissions for client referrals Signup and view all the answers

Under the FAIS Act, what must a financial services provider do if their license lapses?

Notify all clients of the lapsed status and cease operations. Signup and view all the answers

What defines the role of a representative in the context of financial services?

A representative renders financial services on behalf of an FSP. Signup and view all the answers

Which of the following services is NOT specifically excluded from the definition of a representative's role?

Intermediary services Signup and view all the answers

Which of the following statements is true regarding the penalties for unmandated representatives?

They can serve up to 10 years in prison for violations. Signup and view all the answers

Which of the following actions does NOT involve a representative making a judgment on behalf of a client?

Providing administrative support Signup and view all the answers

What must a representative show to comply with the Financial Advisory and Intermediary Services (FAIS) Act?

Is employed or mandated by an authorized FSP. Signup and view all the answers

Which of the following activities would a representative be engaged in?

Servicing financial products for clients. Signup and view all the answers

When a representative processes claims for a client, what are they primarily acting as?

An intermediary on behalf of the client Signup and view all the answers

If a representative is not employed or mandated by an FSP, what could be a major consequence?

They may face penalties up to R10 million or imprisonment. Signup and view all the answers

What is one of the primary objectives of the FAIS Act?

To regulate the rendering of certain financial services Signup and view all the answers

Which authority replaced the FSB as of April 1, 2018?

Financial Sector Conduct Authority Signup and view all the answers

What is a key objective of the FSCA regarding customers?

To promote fair treatment by financial institutions Signup and view all the answers

What approach will the FSCA take for implementing its mandate?

Gradual changes over time Signup and view all the answers

What significant change was made regarding communications and regulatory actions?

They will now occur under the FSCA name Signup and view all the answers

What organization has been established for adjudication of grievances against FSCA decisions?

Financial Services Tribunal Signup and view all the answers

What is the role of the commissioner and deputy commissioners within the FSCA?

Lead the executive committee of the FSCA Signup and view all the answers

When was the Financial Sector Regulation Act signed into law?

August 21, 2017 Signup and view all the answers

Study Notes

Representative Regulatory Exam Workshop Material (RE5)

Workshop material for a representative regulatory exam (RE5)
Up-skilling insurance intermediaries
RE5 Training Manual – Updated December 2022

Introduction to the material
The History of FAIS – FAIS Act 37 (2002)
Objectives of the FAIS Act
Latest updates in the Financial Services Sector
The relationship between the FAIS Act and the Financial Sector Regulation Act
The FSB now referred to as FSCA
FAIS Division
FAIS Departments
Glossary of terms, including the Role Players
Registrar vs Commissioner
What is Financial Services
What is Advice
What is automated advice
Advice is not about
What is Intermediary Services
The Representative
Appointment of representatives
Entry level requirement for Reps
Recruiting Reps
Supervision of Reps
What does it mean when a rep works under supervision
Selection of Supervisor
Supervision agreement
Supervisor responsibilities
Representative under supervision (supervisee)'s responsibilities
The requirements of a Rep
The roles and responsibilities of a Rep
When a Rep provides advice
Steps to be taken when providing advice to the client
When a client receives advice from a rep
Incomplete or no FNA
Choosing a different product
The Fit & Proper Requirements that apply to Representatives
What does Honesty and Integrity refer to?
CPD
COMPETENCE
Experience requirements for Reps
Experience applies to all FSP's, KI's and Reps
Experience lapses for an FSP, KI or rep if particular service for particular financial product not worked with for 5 years
Operational requirements for Reps
Representative Register
What information must be contained in the Representative Register?
What is the purpose of the Rep Register?
Debarring a Representative
Right of appeal
Process of Appeal
Reappointment of debarred reps
Key Individuals
Responsibilities of a KI
Fit and Proper Requirements that apply to Kl’s
Qualification requirements
Experience requirements relating to KI's
Management Responsibilities of the KI
The Financial Services Provider
Responsibilities of the FSP
Application requirements to become an FSP
Changes that must be reported to the FSCA
Licenses granted by the Commissioner
After granting the license, the Commissioner may
Displaying and disclosing the FSP License
Responsibilities of the FSP to ensure the KI's Fit and Proper Status
Control measures required by the FSP relating to Risk Management
FSP's Governance Framework
Additional requirements applicable to FSPs that provide automated advice
OUTSOURCING
Maintaining a license
Undesirable Business Practice
Suspension or Withdrawal of License
Process to be followed when suspending or withdrawing the license
Lapsing a license
Process to be followed when lapsing a license
Format of communication with the Regulator
The purpose of the Code of Conduct
Disclosure requirements
When rendering Financial services to clients
When a client receives advice from a rep
Choosing a different product
The Fit & Proper Requirements that apply to Representatives
What does Honesty and Integrity refer to?
What does Honesty and Integrity refer to?
Roles and functions of a Compliance officer
Approval of a Compliance Officer by the Commissioner
Application as an Officer or Practice
Reportable Irregularities
Responsibilities of the Compliance Officer and FSP
Withdrawal of approval
The FAIS Ombudsman
Roles and powers of the Ombud
Submission of a complaint to the Ombud
Instances of when the FAIS Ombud will not accept the complaint
Prescription period
Decline to investigate
Investigation of the complaint
Matters not settled or not accepted by all parties
The Ombud could
Monetary awards
The determination by the Ombud
Schedule 1 - Laws amended or repealed by the FAIS Act
Product Categories
Glossary of terms, including the Role Players, Registrar vs Commissioner
Glossary of terms on FICA
Transitional Provisions
Summary of timelines
Annexure 1
Tier 1 and Tier 2 Financial Products
Annexure 2
CLASSES OF BUSINESS
Sources

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Description

Test your understanding of the concepts of integrity and good standing. This quiz covers key aspects such as misrepresentation and the role of the Commissioner in assessing an individual's status. Enhance your knowledge of ethical standards and requirements.