FURTHER AMENDMENTS TO THE FAIS GENERAL CODE OF CONDUCT

The Financial Sector Conduct Authority (FSCA) has proposed further amendments to the FAIS General Code of Conduct (the General Code of Conduct) which aim to offer additional protection to financial customers, align requirements relating to premium collection across short and long-term insurance, give effect to the RDR proposals regarding the charging of advice fees from customers and to limit the need for a further exemption notice. 

The amendments include, amongst others, the following: 

  • Fees to which an FSP/its representative is entitled must be reasonable, commensurate to the service being rendered and not result in the FSP or its representative being remunerated twice for the same service.
  • Where an FSP or representative provides products other than financial products to a client, the FSP or representative must disclose to the clients that the provision of those non-financial products do not fall within the ambit of FAIS.
  • A provider may charge a fee for advice rendered to a client provided the advice fee complies with the General Code of Conduct.
  • Insurers and banks are required to maintain, to the extent stipulated by the FSCA, suitable guarantees, professional indemnity or fidelity insurance. 

The amendments to the General Code of Conduct are intended to take effect early in 2021, and any comments on the proposed amendments must, therefore, be submitted to FSCA.RFDStandards@fsca.co.za by 19 February 2021.

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