Full Transcript
https://www.youtube.com/watch?v=5GGG0S6fq5Q
[00:03] Task 1.
[00:04] Task 1 talks about demonstrating an understanding of the phase act as a regulatory framework.
[00:13] Task 1 has 4 qualifying criteria.
[00:18] Task 1 has 4 qualifying criteria.
[00:20] Let's look at task one qualifying criteria one.
[00:23] Criteria one describe the phase act and subordinate legislation.
[00:28] The financial advisory and intermediary services act, or the phase act for short, was introduced in 2002 and became effective on 30 September 2004.
[00:41] Under the phase act, all institutions and persons who wish to render financial services have to obtain authorization from the regulator before they could render such financial services to the public.
[00:57] The main aim of the phase act is to protect consumers of the financial products against such.
[01:03] of the financial products against such institutions.
[01:04] institutions and persons when it comes to the rendering of financial services.
[01:10] the responsible regulator is the financial sector conduct authority.
[01:15] or the fsca for short.
[01:19] the fsca is headed by a commissioner.
[01:22] prior to the fsca the regulator for non-banking financial services used to be known as the financial services board or fsb for short.
[01:34] the fsp was headed by a registrar.
[01:38] please note that in these videos when we refer to the office of the fsca we are also referring to the commissioner, the registrar, and even the authority.
[01:50] we use these words interchangeably to refer to the regulator.
[01:55] the phase act is thought to be a market conduct regulation.
[02:01] market conduct regulation what does that
[02:04] Market conduct regulation, what does that mean?
[02:05] Mean? Well, the FAIS Act regulates the...
[02:08] Well, the FAIS Act regulates the business of all financial services providers who give advice or provide intermediary services to clients.
[02:17] Clients, it does this by setting minimum standards for authorized financial services providers for when they interact with clients.
[02:27] The FAIS Act follows a functional approach and not an institutional approach.
[02:33] This means that the Act regulates certain functions across institutions such as insurance companies, brokerages, and banks.
[02:44] An institutional approach, on the other hand, focuses on specific institutions like the Banks Act, for example, which only regulates banks.
[02:56] Therefore, the function of providing financial services across the various institutions is one that is regulated by the FAIS Act.
[03:04] Think of the FAIS Act as the...
[03:07] phase act think of the phase act as the big brother
[03:08] big brother of financial services it's there to
[03:12] of financial services it's there to protect consumers
[03:15] the phase act has two clear purposes
[03:19] the phase act has two clear purposes one to professionalize the financial
[03:22] one to professionalize the financial services sector
[03:24] services sector and two to protect consumers
[03:28] and two to protect consumers for example ensuring that the insurance
[03:31] for example ensuring that the insurance industry
[03:31] industry does not charge consumers inflated
[03:33] does not charge consumers inflated premiums
[03:37] under the phase act as from thursday
[03:39] under the phase act as from thursday september 2004
[03:42] september 2004 no one should act as a financial
[03:43] no one should act as a financial services provider or an
[03:45] services provider or an fsp for short without a license
[03:49] fsp for short without a license equally no one should act as a
[03:52] equally no one should act as a representative
[03:53] representative unless that person is appointed by an
[03:55] unless that person is appointed by an authorized fsp
[03:58] authorized fsp also an authorized fsp may only conduct
[04:02] also an authorized fsp may only conduct financial services related business
[04:04] financial services related business with an fsp that is licensed
[04:08] with an fsp that is licensed so then if an unauthorized fsp or representative concludes a transaction with a client such a transaction will lack authority.
[04:19] put simply under the phase act if an unauthorized fsp concludes a transaction with a client that transaction is not valid and will not be enforceable in law.
[04:34] over and above the phase act there are several subordinate legislations these help to regulate the conduct of fsps and include 1. the general code of conduct for authorized financial services providers and representatives two the determination of fit and proper requirements for financial services providers three board notices and four guidance notes.
[05:14] the phase act and subordinate.
[05:16] the phase act and subordinate legislations.
[05:17] legislations talk about role players who help to.
[05:20] talk about role players who help to enforce its rules.
[05:22] enforce its rules let us briefly mention some of these.
[05:24] let us briefly mention some of these role players.
[05:26] role players let's start with the fsca the financial.
[05:30] let's start with the fsca the financial sector conduct authority.
[05:31] sector conduct authority or fsca for short has replaced the old.
[05:35] or fsca for short has replaced the old fsb.
[05:37] fsb in a way the fsca is there to police the.
[05:40] in a way the fsca is there to police the phase act.
[05:42] phase act and is responsible for market conduct.
[05:45] and is responsible for market conduct market efficiency and integrity as well.
[05:48] market efficiency and integrity as well as consumer education.
[05:51] as consumer education regulates the non-banking side of.
[05:53] regulates the non-banking side of financial services.
[05:55] financial services such as insurance services.
[05:58] such as insurance services the fsca is headed up by a commissioner.
[06:02] the fsca is headed up by a commissioner sometimes the words registrar or.
[06:05] sometimes the words registrar or authority.
[06:06] authority are used to refer to the fsca or the.
[06:08] are used to refer to the fsca or the commissioner.
[06:13] next we have financial services.
[06:15] Next we have financial services providers.
[06:16] Providers or FSPs for short.
[06:20] Or FSPs for short, these are the financial institutions.
[06:21] Financial institutions that are authorized by the FSCA to sell financial services.
[06:24] That are authorized by the FSCA to sell financial services.
[06:27] Financial services, and by authorized we mean licensed.
[06:31] And by authorized we mean licensed.
[06:31] The financial services that an FSP can provide to clients.
[06:34] The financial services that an FSP can provide to clients include intermediary services.
[06:35] Include intermediary services and or giving advice.
[06:38] And or giving advice.
[06:41] An FSP may be a legal entity or a one person business operating in his or her own name.
[06:44] An FSP may be a legal entity or a one person business operating in his or her own name.
[06:47] Operating in his or her own name.
[06:48] His or her own name.
[06:52] FSPs are fully responsible for implementing and maintaining compliance with the FAIS Act and relevant codes of conduct.
[06:53] Responsible for implementing and maintaining compliance.
[06:55] For implementing and maintaining compliance.
[06:56] Compliance with the FAIS Act and relevant codes of conduct.
[07:00] Conduct.
[07:02] The next point is an important one.
[07:05] The next point is an important one.
[07:05] Some financial services companies do not have to become licensed under the FAIS Act.
[07:08] Some financial services companies do not have to become licensed under the FAIS Act.
[07:10] Have to become licensed under the FAIS Act.
[07:11] Act, for example, FSPs who lend money may need to become an authorized credit.
[07:15] For example, FSPs who lend money may need to become an authorized credit.
[07:17] may need to become an authorized credit provider.
[07:18] provider under the national credit act.
[07:23] next we have key individuals or kis for.
[07:27] next we have key individuals or kis for short.
[07:27] short who are employed by fsps to ensure.
[07:30] who are employed by fsps to ensure compliance with the phase act.
[07:33] compliance with the phase act they are responsible for the management.
[07:35] they are responsible for the management and oversight of the business.
[07:38] and oversight of the business every fsp must have someone fulfilling.
[07:41] every fsp must have someone fulfilling the role of a key individual.
[07:45] the role of a key individual for one person businesses the owner will.
[07:48] for one person businesses the owner will be the fsp.
[07:49] be the fsp and act the key individual.
[07:55] next we have representatives or reps for.
[07:58] next we have representatives or reps for short.
[07:59] short who are employed by fsps to sell.
[08:02] who are employed by fsps to sell financial services to clients.
[08:04] financial services to clients for purposes of the phase act reps.
[08:07] for purposes of the phase act reps include.
[08:08] include call center agents brokers.
[08:12] call center agents brokers consultants financial planners.
[08:15] consultants financial planners financial advisors investment advisors.
[08:19] financial advisors investment advisors and insurance agents it's important to
[08:23] and insurance agents it's important to note that
[08:24] note that rapes are not people who provide
[08:26] rapes are not people who provide clerical
[08:27] clerical technical administrative
[08:31] technical administrative legal or related services
[08:34] legal or related services this relates to instances where advice
[08:37] this relates to instances where advice is not given to a client
[08:39] is not given to a client especially if
[08:42] 1. no judgment is required
[08:47] 2 the information provided does not lead
[08:51] 2 the information provided does not lead a client to a transaction
[08:54] a client to a transaction and three information provided is
[08:57] and three information provided is factually objective
[08:59] factually objective like describing a product's features
[09:03] reps must be able to provide proof to
[09:05] reps must be able to provide proof to clients that they are
[09:07] clients that they are authorized to act on behalf of an fsp
[09:12] next we have compliance officers
[09:15] next we have compliance officers who are employed or contracted by fsps
[09:19] who are employed or contracted by fsps to help with compliance matters as
[09:21] to help with compliance matters as required by the phase act.
[09:24] required by the phase act compliance forms part of an fsp's risk.
[09:27] compliance forms part of an fsp's risk management processes.
[09:30] management processes and these processes are supervised by.
[09:32] and these processes are supervised by the compliance officer.
[09:35] the compliance officer if an fsp has more than one key.
[09:37] if an fsp has more than one key individual.
[09:38] individual or one or more representatives then that.
[09:41] or one or more representatives then that fsp.
[09:42] fsp must appoint a compliance officer.
[09:46] must appoint a compliance officer this means that once an fsp adds another.
[09:49] this means that once an fsp adds another key individual.
[09:50] key individual or appoints one or more reps then that.
[09:53] or appoints one or more reps then that fsp.
[09:54] fsp must appoint a compliance officer.
[09:57] must appoint a compliance officer for a one person business the owner who.
[10:00] for a one person business the owner who also serves as the key individual may.
[10:03] also serves as the key individual may oversee.
[10:04] oversee his or her own compliance in this case.
[10:08] his or her own compliance in this case the owner does not become a compliance.
[10:11] the owner does not become a compliance officer.
[10:12] officer but can report directly to the fsca on.
[10:15] but can report directly to the fsca on compliance matters.
[10:16] compliance matters without appointing a compliance officer.
[10:22] and then we have the face on boot
[10:25] and then we have the face on boot the onboard for financial services
[10:27] the onboard for financial services providers
[10:28] providers or the phase ombud for short resolves
[10:31] or the phase ombud for short resolves complaints submitted by clients
[10:33] complaints submitted by clients about an fsp and or its rips
[10:38] about an fsp and or its rips this service that is provided by the
[10:40] this service that is provided by the face ombud
[10:41] face ombud is free to aggrieved clients
[10:48] let us now go through a few questions to
[10:50] let us now go through a few questions to test our knowledge
[10:55] what does face stand for
[10:59] what about financial advice information
[11:02] what about financial advice information services
[11:05] no what about
[11:10] no what about finance acts information services
[11:14] finance acts information services no
[11:18] what about financial advisory
[11:21] what about financial advisory and intermediary services
[11:26] yes
[11:30] which of the following is not one of the
[11:32] which of the following is not one of the main objectives of the phase act
[11:36] main objectives of the phase act what about to ensure that the insurance
[11:39] what about to ensure that the insurance industry
[11:40] industry does not charge inflated premiums
[11:45] yes what about
[11:48] yes what about to ensure customers are treated fairly
[11:54] yes what about
[11:57] yes what about to ensure that all the financial service
[11:59] to ensure that all the financial service providers
[12:00] providers sold different products
[12:08] no
[12:11] no what is the regulatory body of the phase
[12:13] what is the regulatory body of the phase act
[12:17] what about the face ombud
[12:21] no the phase ombud
[12:25] no the phase ombud resolves complaints submitted by clients
[12:27] resolves complaints submitted by clients about an fsp and or its reps.
[12:32] what about the financial service conduct?
[12:35] what about the financial service conduct authority?
[12:36] authority the fsca for short.
[12:40] yes.
[12:47] which of the following statements is false?
[12:50] a key individual may function both as an fsp and a key individual.
[12:59] true.
[13:03] compliance officers are appointed by the fsca to monitor compliance as required by the phase act.
[13:14] false compliance officers are not appointed by the fsca.
[13:21] they are appointed by fsps the fsca approves the compliance.
[13:28] The FSCA approves the compliance officers.
[13:28] Officers that are appointed by the FSPS.
[13:36] Which of the following statements is.
[13:38] Which of the following statements is false?
[13:40] False, a functional approach focuses on.
[13:43] A functional approach focuses on specific institutions.
[13:47] False, a functional approach.
[13:51] False, a functional approach means the FAIS Act regulates certain.
[13:54] Means the FAIS Act regulates certain functions.
[13:55] Functions across institutions such as insurance.
[13:57] Across institutions such as insurance companies.
[13:58] Companies, brokerages, and banks.
[14:03] Brokerages and banks.
[14:07] Which of the following statements is.
[14:09] Which of the following statements is false?
[14:11] False, the FAIS Act applies only to FSPS who.
[14:14] The FAIS Act applies only to FSPS who give advice in relation.
[14:16] Give advice in relation to financial products.
[14:21] False, the FAIS Act.
[14:24] False, the FAIS Act applies to FSPS who give advice or.
[14:27] Applies to FSPS who give advice or provide.
[14:28] Provide intermediary services to clients.
[14:33] True.
[14:39] We hope you enjoyed the video and learnt.
[14:42] We hope you enjoyed the video and learnt a lot.
[14:43] A lot, please make sure to check out our other.
[14:45] Please make sure to check out our other ori videos.
[15:11] You.