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Moonstone Monitor -  18 January 2018

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In This Week's Newsletter
 
From the Crow's Nest
Continuous Professional Development – Effective date of 1 June 2018 leaves little time to plan for compliance
 
Your Practice Made Perfect
Key Individual Operational Ability – Steps implemented to address Rent-a-KI
Changes to RE Questions – New Fit and Proper requirements will affect questions and study material
 
Technologically Speaking
Expand Your Practice through Social Media
 
Regulatory Examinations
Schedules for 2018
Self-Help Guidelines and Frequently asked questions
 
Careers Platform
Are you hiring? Advertise your position on Moonstone’s Career Platform
Featured Positions
 
In Lighter Wyn
Ashes to ashes – For once, the cricket laugh is not on us. Some jokes related to this wonderful game
Paul Kruger 2017-08-03
Paul Kruger Author/Editor
 
 
 
 

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From the Crow's Nest
From the Crow's Nest
Continuous Professional Development
Under the old dispensation, Continuous Professional Development (CPD) was the third leg of the journey towards becoming a true professional, after successfully completing the level 1 and 2 regulatory examinations.

Now that the level 2 REs have been replaced by line of business and product specific training under the new Fit and Proper requirements, CPD is a current reality, especially for those who benefit from the grandfathering clause in terms of qualifications.

Who needs to do CPD?

The fit and proper requirements relating to CPD apply to all FSPs, key individuals and representatives except the following:
 
(a) a Category I FSP, its key individuals and representatives that are authorised, approved or appointed only to render financial services or manage or oversee financial services in respect Long-term Insurance subcategory A and/or Friendly Society Benefits;
(b) a representative of a Category I FSP that is appointed to only -
  (i) render a financial service in respect of a Tier 2 financial product; and/or
  (ii) render an intermediary service in respect of a Tier 1 financial product, including “execution of sales”.


General requirements

(1) A FSP, key individual and representative must -
  (a) maintain the required competence to render or manage or oversee the financial services for which the FSP, key individual and representative are authorised, approved or appointed;
  (b) comply with the prescribed minimum CPD requirements;
  (c) ensure that the type and combination of CPD activities undertaken -
    (i) are relevant to the functions and role of the FSP, key individual and representative;
    (ii) contributes to the skill, knowledge, expertise and professional and ethical standards of the FSP, key individual and representative;
    (iii addresses any identified needs or gaps in -
      (aa)  the technical knowledge of the FSP, key individual and representative;
      (bb) the generic knowledge and understanding of the environment in which the financial service is rendered or managed or overseen; and
      (cc) the knowledge and understanding of applicable laws; and
    (iv) adequately takes into account changing internal and external conditions relevant to the classes and subclasses of business, the category of financial services and the financial products for which the FSP, key individual or representative is authorised, approved or appointed.

(2)

A FSP must establish and maintain policies and procedures on CPD that include:
  (a) how the FSP, key individual and representative will -
    (i)  maintain knowledge and skills that are appropriate for their activities and responsibilities;
    (ii) update their knowledge and skills; and
    (iii) develop new knowledge and skills to assist with their current functions and responsibilities or functions contemplated in the future;
  (b)  training plans for each CPD cycle to ensure that CPD -
    (i) is relevant and appropriate for the authorisation, approval and appointment of the FSP, key individual and representative;
    (ii) addresses any identified needs, knowledge and skills gaps; and
    (iii) continually improves the professional standards and practices of the FSP, its key individuals and representatives.

(3)

An FSP must -
  (a) within 30 days after the expiry of each CPD cycle, record in the competence register the -
    (i) CPD activities of the FSP, its key individuals and representatives; and
    (ii) reduction of CPD hours of a representative as indicated below;
  (b) calculate the total number of CPD hours completed by each person referred to in (a) as at the end of each CPD cycle;
  (c) obtain and retain relevant supporting evidence of the CPD activities recorded in the competence register;
  (d) record the dates of, reasons for and retain supporting evidence for, any decision of the FSP to reduce CPD requirements in accordance with section 34; and
  (e) retain the evidence referred to in (c) and (d) for a period not less than five years from the end of the CPD cycle concerned.

The Fit and Proper Requirements also list the minimum CPD hours required, and conditions under which such hours may be reduced.

The effective date for CPD is 1 June 2018. We suggest that you study the relevant section in the 2017 Fit and Proper Determination to assess the impact on your business and what is required of you.

There can be little doubt that these stringent requirements, coupled with similar record keeping demands under the competency requirements, including training, will add yet another layer of costs to an already over-burdened industry, which will inevitably trickle down to clients.

A far bigger concern is how many more of the straws that we know are coming, this camel’s back can handle.

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   - increase time with clients
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Shouldn’t you too?

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With offices nationally, we are well-placed to help you.

Call us to discuss a strategic partnership.

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An authorised Financial Services Provider FSP no. 731
Your Practice Made Perfect
Your Practice
Key Individual Operational Ability
The Fit and Proper Requirements 2017 published recently, also provides stipulations on operational ability.
 
Billy Seyffert, COO of Moonstone Compliance and Risk Management, pointed out an important consideration for Key Individuals:

A FSP must have at least one key individual per class of business in respect of which the FSP is authorized. This could be a single person responsible for managing or overseeing the rendering of financial services in respect of all or multiple classes of business of the FSP provided that it -
  1. is approved for all such classes of business; and

  2. has the operational ability to oversee or manage the rendering of financial services in respect of all such classes of business.

A key individual, where he or she is-
  1. approved or appointed as a key individual of more than one FSP or juristic representative; or

  2. approved or appointed as a key individual of an FSP or juristic representative and appointed as a representative of an FSP other than the first mentioned FSP,

must be able to demonstrate to the Registrar, in a form and manner which may be determined by the Registrar, that he or she has the required operational ability to effectively and adequately manage or oversee the financial services related activities of all the FSPs or juristic representatives for which the key individual was approved or appointed.

In addition, a FSP must, on a regular basis, assess the operational ability of its key individuals to adequately and effectively perform their functions taking into account individual circumstances, the nature, scale, range and complexity of the FSP's financial services related activities and whether the key individuals are approved as key individuals or appointed as representatives of other FSPs.

The intent of this clause is possibly to address the issue of rent-a-KI where someone fills the position but does not have the ability or capacity to fulfil the legal obligations required of a key individual. If this applies to you, note the double whammy above: You cannot wait for the FSB or your compliance officer to tell you. “…a FSP must, on a regular basis, assess the operational ability of its key individuals to adequately and effectively perform their functions…”
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Changes to Regulatory Exam Questions
The long anticipated amended “Determination of Fit and Proper Requirements for Financial Services Providers, 2017” was finally printed in December last year.

The amended determination comes into effect on 1 April 2018.

The competence requirements relating to regulatory examinations contained in the amended Determination apply to all FSPs, key individuals and representatives except:
  • a Category I FSP, its key individuals and representatives authorised, approved or appointed only to render financial services or manage or oversee financial services in respect of the financial products: Long-term Insurance subcategory A and/or Friendly Society Benefits; and

  • a representative of a Category I FSP that is appointed only to perform execution of sales in respect of a Tier 1 financial product provided that the requirements in section 22(b)(ii) are complied with;

  • a representative of a Category I FSP that renders financial services in respect of a Tier 2 financial product only.

Regulatory Exam Study Material

The amended requirements will have a substantial impact on the content of the study material for the REs.

We believe that the FSB will soon provide guidance on the deadline by when the amended requirements are to be incorporated in the regulatory exam questions.

Candidates who are currently preparing to write the exams should consider the possible implications of such changes, and endeavour to write the exams before it becomes effective.

Candidates are advised to carefully consider the above and to only write the REs once they are absolutely ready.
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Technologically Speaking
Suitebox 2017-06-29
Moonstone Information Refinery
 
Expand Your Practice through Social Media
I have a confession to make. My name is Paul and I have not skipped Facebook once this week. In fact, I have not missed going there once this entire year.

The problem is that it was for fun and socialising only. Not that it is a problem having fun, but the trick is to combine fun and work.

Thinkadvisor recently published an article titled 4 Ways to Build Your Practice Through Social Media which contains easy to understand tips on how you can utilise a number of platforms to promote your business, create awareness and leave clients with a lasting impression.

Social media can generate immense opportunities if used effectively. For advisors looking to cultivate their digital footprint in an impactful way, here are four ways you can build an online network and establish inimitability for yourself and your practice…

Click on the link above to read the 795 word article.
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Regulatory Examinations
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2018 RE Schedules updated

Please note
: Registration cut-off is 11 working days before date of exam.
Top of Page
 
Frequently Asked Regulatory Exam Questions
1. What exam must I write?
Both the RE 5 and RE  are Level One exams. RE 5 is for Representatives and RE1 for Key Individuals. The RE 3 exam is for licence category II candidates.
2. How much does it cost?
The FSB determines the fee. Currently it costs R1163 per exam, also in the case of a re-write.
3. What preparation material is available?
Fully updated resources are available for those requiring access to the legislation applicable to the regulatory examinations:
  Please make sure that you first read the FSB’s Preparation Guide to make sure you follow the right process in preparing. Page seven includes a recent amendment to guide candidates in studying in the correct manner.
  Click on the following highlighted sections to download the relevant updated Inseta learning material for key individuals, RE 1, and representatives, RE 5.
  LexisNexis provides a “Legislation Handbook” together with a “Preparation Guide” containing the qualifying criteria, with a link to the relevant legislation.
  The Juta FAIS Pocket Statutes also contains a CD with a comprehensive list of updated supplementary legislative material for reference purposes. Please click here to order this from our online shop.
  The FSB’s telematics broadcast on the RE 1 and RE 5 provides a good introduction and overview, and can also be ordered online in:
    DVD format or on a
USB memory stick
MP4 direct download - 2 Gb
4. Where can I write? Go to: http://www.faisexam.co.za/show_venues
5. What dates are available?
Go to: http://www.faisexam.co.za/view_schedule
6. What training is available?
As an Exam body we are not allowed to recommend companies that offer face-to-face Regulatory exam classes. You can try Google for someone in your area. Bear in mind that this exam tests your knowledge about the laws applicable to the provision of financial advice and intermediary services. The questions are based on very specific qualifying criteria set out in the FSB preparation guide. Any training that does not have this as a basis will not prepare you properly for the exam. Do your own research and don’t just accept what others say.
7. Where can I buy old question papers?
There are no genuine “old question papers” available. Be very careful when buying such preparation aids as some of those on offer are not in line with the high standard prevailing in the actual exams and often lead to a false sense of knowledge which is sadly exposed when confronted by the actual exam. Follow the guidelines provided in the FSB Preparation Guide and you are far more likely to achieve success.
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Careers Platform
Are you hiring? Advertise your position on Moonstone’s Career Platform
Careers Platform Packages

•   The Moonstone website - www.moonstone.co.za - enjoys an average of 20 000 visits and approximately 39 000 page views per month.
Moonstone boasts an exclusive newsletter mailing list of over 49000 dedicated financial decision makers who receive 2 newsletters per week.
Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors: Investment, Risk, Healthcare, Banking, Retirement, and Insurance.


Advertise


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Featured Positions
  • Insurance Field Sales Reps: Quantum Invest, Nationwide - We are looking for field Reps nationwide. RE5 qualification is recommended. We offer a competitive commission structure. Read More

  • Financial Advisor: Kaizen Solutions, Gauteng - We are currently recruiting an unlimited number of individuals aged 25 to 35 who are sales driven, motivated, ethical and dedicated. Read More

  • Senior Credit Controller: CIA Building Insurance, Bedfordview, is currently looking for an experienced credit controller to join our finance team. Read More

  • Short Term Insurance Underwriter: JFA Shortterm Brokers CC, Milnerton, Cape Town - If you have a minimum of 3 years experience and, live in the vicinity of the brokerage, then Read More

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In Lighter Wyn
In Lighter Wyn
More ashes to ashes…
The batsmen strolled up to the crease and carefully took guard. He looked round the field, noting the position of each player. With great elegance, he patted down several invisible bumps on the pitch and at last signalled that he was ready to accept the first delivery. The ball came and uprooted the middle stump.

"What a shame," said the wicketkeeper. "Just as you were getting set!"

In a local match, the umpire was being jeered and heckled unmercifully from the crowd. At length he walked over to the boundary and sat down next to his chief critic.

"What are you doing?" asked the spectator. "Well," said the umpire, "it seems you get the best view from here."

In school, the teacher asked Johnny to spell "bowling". Back came the answer : "B-o-e-l-i-n."

"That," said the teacher, "is the worst spell of bowling I've ever seen."

During the match, the fieldsman positioned just behind the umpire kept trying to distract the batsman as the ball was bowled to him. Several appeals for lbw were turned down, and finally the umpire turned to the fieldsman and said sternly:

"I've been watching you for the last 20 minutes."

"I thought so," came the reply, "I could tell you weren't watching the game!"

Maurice Leyland of Yorkshire and England was getting heckled because of some less-than-perfect fielding on tour in Australia. One barracker, in particular, was having a great time jeering at Leyland's errors. He could hardly contain himself when Leyland dropped a high catch.

"Idiot," he yelled, "I could have caught it in my mouth!'

Leyland grinned at the man and said: "If I'd a mouth as big as yours, I could have too."

In a club match a fast bowler was terrorising a visiting side. As the new batsman slowly reached the middle, he was asked by the umpire if he wanted the sightscreen moved. He thought and said he would.

"To the left or right?" asked the umpire.

"Neither," the frightened batsman replied. "Couldn't I have between him and me?"

It was the after-lunch session and the batsman had been drinking too heavily during the break. He staggered up to the captain and confessed that he could see three of everything.

'Well,' said the captain, 'when you get out there and the three balls come towards you, just hit the middle one.'

The batsman weaved his way to the crease and was bowled first ball. He made his way back.

'What happened?' demanded the captain. 'Didn't you hit the middle ball?'
 
'Yesh,' replied the batsman, 'but I used the outside bat!'
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