Financial Crime World

Financial Advisory and Intermediary Services Act (FAIS) of South Africa

Terms Defined in FAIS

The Financial Advisory and Intermediary Services Act (FAIS) defines various terms related to the financial sector. These definitions are crucial for understanding the act’s provisions and requirements.

  • Financial service provider: An individual or entity that provides a financial advisory or intermediary service.
  • Financial advisory service: A service provided by a financial service provider in relation to an investment, including advice on:
    • The merits of acquiring or disposing of an interest in a financial product
    • The suitability of an investment for a client
    • The acquisition or disposal of an interest in a financial product
  • Financial intermediary service: A service provided by a financial service provider in relation to a financial product, including:
    • Arranging the acquisition or disposal of an interest in a financial product
    • Facilitating the acquisition or disposal of an interest in a financial product

Object and Application of FAIS

The object of the FAIS is to:

  • Establish a framework for the regulation of financial advisory and intermediary services
  • Protect clients from financial harm by ensuring that financial service providers act with integrity and competence
  • Promote transparency and fairness in the provision of financial advisory and intermediary services

The FAIS applies to:

  • Financial service providers who provide financial advisory or intermediary services
  • Financial institutions, holding companies, and other entities within a prudentially regulated financial group or conglomerate

Guidance for Interpretation and Compliance

To ensure compliance with the FAIS, financial service providers must:

  1. Register: Register with the Financial Sector Conduct Authority (FSCA) as a financial service provider
  2. Obtain necessary qualifications: Obtain necessary qualifications or experience to provide financial advisory or intermediary services
  3. Comply with codes of conduct: Comply with codes of conduct issued by the FSCA, including:
    • The Code of Conduct for Financial Advisors
    • The Code of Conduct for Financial Intermediaries

Prudential Regulation Requirements

For information on prudential regulation requirements, please refer to the Financial Sector Regulation Act (FSRA). Possible relevant sections or articles from the FSRA include:

  • Section 7: Object of the FSRA
  • Chapter 3: Prudential Regulation Framework
  • Part B: Supervision and Enforcement

Please note that this is speculative, as I do not have direct access to the FSRA. You should consult the actual legislation or seek guidance from a qualified expert or regulatory authority for accurate information on prudential regulation requirements.