Guidelines for use with Fit and Proper

This document aims to provide guidelines for use by the banking sector when interpreting the requirements laid down by the Determination of Fit and Proper Requirements for Financial Services Providers, 2003.

Equivalence decisions can be guided by the following:

The recommendations and guidelines that follow are based on interpretations of the requirements detailed in the Determination of Fit and Proper Requirements for Financial Services Providers, 2003, and an inclusive view of the qualifications currently registered by the South African Qualifications Authority (SAQA). The following sections specifically guided the interpretation:

PART I Definitions

“Skills programme” means a skills programme referred to in the Skills Development Act, 1998 (Act No. 97 of 1998);

“Subcategory” means, depending on the relevant context, either-

(a) A subcategory of financial products as appears from Table A in paragraph 3(1) of this Determination; or

(b) A subcategory of minimum experience as appears from Tables B and C in paragraphs 3(2) and 3(3) of this Determination, respectively, as the case may be;

(2) Unless the context indicates otherwise, a reference in this Determination to-

(a) A qualification mentioned in Column Two, Three or Four of Table A, B or C in paragraph 3(1), (2) or 3(3) of this Determination, as the case may be, must, subject to subparagraph (c) below, be construed as a reference to any such qualification obtained in the Republic (or a foreign qualification recognised by the Registrar) before or after the date of coming into operation of this Determination, irrespective of whether a partial completion of requirements for the qualification occurred before such date, including a qualification or skills programme consisting of unit standards registered by SAQA, and registered within the National Qualifications Framework, and which qualification may be or may have been obtained in part by Recognition of Prior Learning (RPL);

(b) “Grade”, refers to the level of education obtained in the course of attending formal schooling, or adult basic education and training provided by a registered or recognised education institution in the Republic;

(c) An “appropriate” certificate, diploma, skills programme or degree, refers to such academic qualifications obtained in the fields of commerce and/or commercial law which includes modules on financial accounting, financial markets, commercial law, insurance law, estate and trust law and similar subjects, or other particular fields of study which equip such person to render a financial service in a specialised class of financial product, registered by SAQA and provided by a registered higher institution whether local or foreign;

(d) Category l, ll or lll, or to any subcategory, shall not be construed as preventing an applicant from applying for a licence in respect of one or more financial products of more than one Category or subcategory, subject to compliance with the requirements of this Determination as regards each and every such Category or subcategory; and

(e) Any skills programme (i.e. less than 120 credits), and not whole qualifications (i.e. 120 credits and higher), must, subject to any future amendment of this Determination by the Registrar in connection with a stated number of required credits, not be construed as eliminating such a whole qualification which all relevant applicants are in any case encouraged to complete.

Short version of the requirements specified in the Fit and Proper Determination.

Abbreviations:

FPC / Financial Product category
Min Q / Minimum qualifications
Min SP / Minimum skills programme
Cert / Certificate
Dipl / Diploma
Deg / Degree
Post grad dipl / Post graduate diploma
Cond / Years available to meet the conditions and restrictions
Cond Q / Qualifications to be reached within the conditions and restrictions period

Category 1 requirements:

FPC /

Min Q

/ Min sp / Cond / Cond Q
Benefit provided by a friendly society / Gr 10, St 8, L2 / L2 - 12 credits / 2 / L2 - 30 credits sp or L 2 qualification
Long term insurance Category A / Gr 10, St 8, L2 / L2 - 12 credits / 2 / L2 - 30 credits
Deposits less than 12 months / Gr 12, L4 / L2 - 12 credits / 2 / L2 - 30 credits
Long term insurance Category B / Gr 11, St 9, L3 / L4 - 12 credits / 2 / L4 - 30 credits sp / L4 Certificate
Short term insurance personal lines / Gr 11, St 9, L3 / L4 - 12 credits / 2 / L4 - 30 credits sp / L4 Certificate
Deposits longer than 12 months / Gr 12, L4 / L4 - 12 credits / 2 / L4 -30 credits sp /
L5 certificate
Short term Insurance commercial lines / Gr 12, L4 / L4 - 30 credits / 3 / L4 - 60 Credits sp /
Degree/
L5 diploma
Health service benefits / Gr 12, L4 / L5 - 30 credits / 3 / L5 - 60 credits sp/
L5 cert/diploma (entity reg in RSA)
Long term insurance Category C / Gr 12, L4 / L5 - 30 credits / 3 / L5 - 60 credits sp / L5 post grad dipl (university reg in RSA) /
L5 diploma
Participatory interests - Collective investment schemes / Gr 12, L4 / L5 - 30 credits / 3 / L5 - 60 credits sp / L5 post grad dipl (university reg in RSA)/ L5 dipl
Pension fund benefits (excl Retail) / Gr 12, L4 / L5 - 30 credits / 3 / L5 - 60 credits sp/ L5 diploma (entity reg in RSA)
Retail Pension benefits / Gr 12, L4 / L5 - 30 credits / 3 / L5 - 60 credits sp / L5 post grad dipl/
L5 diploma
Foreign currency denominated investment instruments / Gr 12, L4 / L6 -30 credits (depends on years of experience) / 3 / L6- 60 Credits sp
Securities and instruments / Gr 12, L4 / L6 -30 credits (depends on years of experience) / 3 / L6- 60 Credits sp

Category II and Category III requirements:

Category II requirements / Minimum experience / Minimum Qual / Conditions period / Conditions/restrictions
Sub-category 1 / 5 years / • Grade 12/ Standard 10/ or an equivalent FETC / 3 Y / L6 Cert - 120 credits
Sub-category 2 / 4 years / L5 Cert/ L6 sp -120 credits / N/A
Sub-category 3 / 3 years / Appropriate Bus deg/ dipl - L6 / N/A
Category III
Subcategory 1 / 3 years / L4 Cert/Gr12/ Matric / 3 years / L6 sp - 60 credits
L6 sp - 30 credits
Subcategory 2 / 2 years / L5 cert
L6 sp - 60 credits / N/A
Subcategory 3 / 1 year / L6 dipl/cert / N/A

Interpretation of the requirements at minimum qualification level:

We recommend that qualifications that adhere to the following requirements are accepted as meeting the minimum qualification level for Category I, if it matches or exceeds the requirements. The following recommendations include as many variables as are listed below, but is not meant to be limited to these certificates only. The guidelines can be tested against the requirements and be interpreted to include more qualifications that meet the requirements.

Requirements at Level 4:

A senior certificate, St 10, Grade 12, Matric, N3, A levels

Irrespective of subjects and grade of subjects (HG/SG)

Matric with or without exemption are acceptable

The examination board does not play a role – both IEB or Dept of Education examination are acceptable

Overseas institutions offering school leaver’s certificates, recognized as equivalent to Matric are recognized

All level 4 National Certificates recognized by SAQA.

Requirements at Level 3:

Grade 11

School leaver’s documentation certifying that St 9 had been completed successfully

N2 certificates

Irrespective of subjects or grade of subjects

Overseas institutions offering school leaver’s certificates, recognized as equivalent to St. 9/Grade 11

All Level 3 National Certificates recognized by SAQA.

Requirements at Level 2:

A St 8, Grade 10, N1, O levels

Irrespective of subjects or grade of subjects

School leaver’s documentation certifying that St 8 had been completed successfully

Overseas institutions offering school leaver’s certificates, recognized as equivalent to St 8/ Grade 10

All level 2 National Certificates recognized by SAQA.

Inclusive rather than exclusive:

We have worked on the assumption that the spirit of the law is one of inclusivity at minimum qualification determination. This means that we need to take a broad stance when determining acceptable qualifications for matching with the requirements detailed in Column 3 of Table A, where minimum qualifications are detailed. We thus interpret the requirements to include as many qualifications that meet the level/ grade of education described as possible.

Assumptions about skills programmes for minimum qualification:

The skills programmes will be registered by individual training providers

This will be accepted as valid by all banks

The banks will agree on a list of the core unit standards for the basis of the skills programmes

These skills programmes will use learning material that is individual/ proprietary to the training providers

The training providers are responsible for the quality assurance of the training delivered and assessments against the unit standards that are conducted. The banks accepts that the training providers are in turn quality assured by the relevant ETQA under guidance of SAQA, and will thus recognize skills programmes issued by accredited training providers.

The Fit and Proper sub-committee will provide recommendations for dealing with skills programmes that cater for individuals who provide advice and intermediary services against more than 1 FPC.

Conditions and restrictions: assumptions about qualifications

Degrees, diplomas and certificates and skills programmes

We will recognize all SAQA registered degrees, diplomas and certificates that are registered as full qualifications.

All overseas qualifications that can be recognized as equivalent will be accepted as such.

All overseas qualifications that are offered in conjunction with a SA registered institution will also be accepted at the same level as that of the SA qualification it is linked to.

The level of equivalence will be determined by the requirements specified for the financial product category listed in the F&P regulations.

The test of equivalence will include the following:

  • Level of qualification
  • Subjects need to be appropriate to the financial product category the person is/ intends to be a representative or key individual for

We recommend that the test of appropriateness isbe applied to the requirements of the Determination, including but not limited to the list provided, to determine the appropriateness of the qualification to the financial product category advice or intermediary services are rendered against.

All first/undergraduate degrees at level 6 and higher and all post graduate degrees at level 6 and higher that have relevance to the requirements listed in Fit and Proper, including but not limited to the following subjects and or specializations will be deemed as appropriate depending on the level of the qualification and/or subject, and the applicability to the FPC advice or intermediary services are rendered against.

All diplomas and certificates and post graduate diplomas and certificates at level 5 and higher that have relevance to the requirements listed in Fit and Proper, including but not limited to the following subjects and or specializations will be deemed as appropriate depending on the level of the qualification and/or subject, and the applicability to the FPC advice or intermediary services are rendered against.

Recommended list of subjects and/or specialization areas:

  • Commerce
  • All fields of law that is relevant to commerce
  • Accountancy
  • Financial markets and instruments
  • Insurance
  • Banking
  • Taxation
  • Auditing
  • Marketing
  • International trade
  • Business management/administration
  • All fields of economics
  • Wealth management
  • Health services
  • Business administration
  • Business management and leadership
  • Enterprise development
  • Property & real estate
  • Statistics
  • Corporate governance
  • Actuarial science
  • Economic politics
  • Risk and compliance
  • Employee benefits

This document was compiled under the auspices of the Inter-bank Compliance Training Project, by the Fit and Proper sub-committee. Membership of the committee is vested in the following banks:

ABSA

Nedcor

SBSA

FirstRand

Investec

The BankSeta and Banking Council are invited guests.

Compiled on17 October 2003 at SBSA Morningside Conference Centre

F&P sub-committeeVersion 11