FAIS Framework and Licensing
Not publishedof exam
FAIS ActFinancial ServicesFSP LicenceKey IndividualsUndesirable Practices
Conduct, Disclosure and Records
Not publishedof exam
General CodeDisclosureAdvice ProcessComplaintsFIC Act
Representative Duties and Accountability
Not publishedof exam
Quick Facts
- Examination
- RE5 Representatives
- Questions
- 50
- Time
- 2 hours
- Pass
- 33 correct answers
- Pass mark
- 66%
- Options
- Four per question
- Marking
- No negative marking
- Attempts
- No published limit
- Blueprint
- Eight tasks; 47 criteria
- Complexity
- 30 / 40 / 20 / 10
FAIS Study Loop
Read acts, code, criteria, apply
FAIS ActGeneral CodeQualifying criteriaApplication
Advice vs Intermediary Service
Advice
- Recommendation or guidance
- Defined under FAIS
Intermediary service
- Transaction-related activity
- Defined under FAIS
Apply statutory definitions
FAIS Framework
- FAIS Act
- Financial services regulatory framework
- Subordinate legislation
- Rules supporting FAIS Act
- Financial product
- Defined FAIS product category
- Financial service
- Advice or intermediary service
- Advice
- Recommendation or guidance activity
- Intermediary service
- Transaction-related service activity
FSP Licence Duties
- Licence conditions
- Conditions governing FSP authority
- Maintenance
- Keep licence requirements met
- Display
- Meet licence display rules
- Accreditation lapse
- May affect representative activity
- Undesirable practice
- Prohibited business practice
- Offence
- Contravention under FAIS Act
Key Individual Role
- Key individual
- Management and oversight role
- Oversight
- Monitor financial service rendering
- Management
- Regulated responsibility function
- Honesty
- Fit and proper element
- Integrity
- Fit and proper element
- Good standing
- Fit and proper element
Service Flow
Disclose, advise, record, handle, follow
DisclosureAdviceRecordsComplaintsFollow-up
Internal Complaint vs Ombud
Internal complaint
- Follow FSP procedure
- Record and progress
FAIS Ombud
- External complaints office
- Qualifying complaint jurisdiction
Know process and jurisdiction
Financial Service Flow
- Before rendering service→Give disclosures(Follow General Code)
- Conflict is possible→Identify conflict(Apply disclosure rules)
- Product is discussed→Give material details(Include required disclosures)
- Advice is rendered→Follow advice process(Apply Code requirements)
- Funds are received→Apply custody rules(Use prescribed process)
- Complaint is received→Follow procedure(Record and progress complaint)
- Agreement ends→Apply termination rules(Keep required records)
- Record is requested→Retrieve correctly(Maintain record availability)
General Conduct Duties
- General Code
- Conduct rules for FSPs
- Specific duties
- Prescribed service obligations
- Conflict of interest
- Interest affecting service
- Disclosure
- Required client information
- Advertising
- Code-regulated communication
- Fees and commission
- Disclose required remuneration
Advice and Custody
- Before service
- Give required disclosures
- During service
- Continue required disclosures
- Provider disclosure
- Identify provider information
- Product disclosure
- Give material product information
- Advice process
- Follow Code requirements
- Custody
- Apply funds product requirements
Complaints and Records
- Complainant
- Person bringing complaint
- Reportable complaint
- Code-defined complaint category
- Complaint procedure
- Follow prescribed process
- Termination
- Apply agreement requirements
- Record keeping
- Maintain required records
- Record retrieval
- Retrieve records correctly
FIC Control Duties
- FIC Act
- Financial crime control law
- FSP requirements
- Apply FIC obligations
- Client interaction
- Apply FIC requirements
- Record keeping
- Keep prescribed FIC records
- Suspicious transaction
- Apply reporting requirements
- Tipping off
- Do not disclose report
Representative Check
Fit, register, supervise, escalate, document
Fit and properRegisterSupervisionEscalationDocumentation
RE5 vs RE1
RE5
- Representatives all FSP categories
- 50 questions
RE1
- FSPs and key individuals
- 80 questions
Choose your regulated role
Representative Status Flow
- Representative is appointed→Check register(Record required appointment)
- Competence is incomplete→Check supervision(Apply current requirements)
- Under supervision→Make disclosures(Disclose supervision status)
- Fit and proper changes→Escalate promptly(Check appointment implications)
- Possible contravention→Document facts(Use approved procedure)
- Debarment is considered→Follow due process(Apply FAIS requirements)
- Debarment occurs→Make notification(Use prescribed form)
- Recourse is sought→Check available remedies(Follow governing rules)
FAIS Ombud
- FAIS Ombud
- Financial services complaints office
- Jurisdiction
- Authority over qualifying complaints
- Complaint
- FAIS-defined complaint
- Role
- Resolve qualifying disputes
- Authority
- Powers under governing rules
- Redress
- Potential complaint remedy
Representative vs Key Individual
Representative
- Renders financial services
- RE5 regulated role
Key individual
- Manages and oversees services
- RE1 regulated role
Rendering differs from oversight
Representative Role
- Representative
- Renders financial service
- Fit and proper
- Ongoing competence requirements
- Qualifications
- Competence requirement element
- Experience
- Competence requirement element
- Regulatory examination
- Knowledge competence requirement
- CPD
- Continuous professional development
Supervision vs Debarment
Supervision
- Oversight arrangement
- Disclose required status
Debarment
- Removal from representative role
- Follow required process
Support differs from removal
Supervision and Debarment
- Representative register
- Record appointed representatives
- Supervision
- Required oversight arrangement
- Supervision disclosure
- Disclose required status
- Fit and proper gap
- May affect appointment
- Debarment
- Remove unfit representative
- Recourse
- Available debarment remedy
Common Traps
RE5 is not RE1
RE5 tests representatives ≠ RE1 tests oversight roles
Pass mark arithmetic
33 correct answers pass ≠ 32 correct answers fail
Task weights unpublished
Study every published task ≠ Do not invent task weights
Code versus Act
Read underlying legislation ≠ Apply General Code requirements
Advice versus intermediary
Use statutory definitions ≠ Do not merge concepts
Supervision versus debarment
Supervision supports permitted activity ≠ Debarment removes representative role
Last Minute
- 1.Confirm RE5 representative role
- 2.Remember 50 questions
- 3.Allow two hours
- 4.Target 33 correct answers
- 5.Know four answer options
- 6.Expect no negative marking
- 7.Review all eight tasks
- 8.Read FAIS Act definitions
- 9.Apply General Code disclosures
- 10.Separate advice and intermediary service
- 11.Review fit and proper
- 12.Review supervision and debarment