Understanding is Key
Who is a Key Individual?
A Key Individual is responsible for the managing and overseeing of the activities of the Financial Service Provider (FSP) and is described in detail in the Financial Advisory and Intermediary Services Act (FAIS Act). A Key Individual should effectively be a person in an executive or managerial function to oversee the activities of the FSP.
How is a Key Individual appointment made?
Key Individuals are appointed by the FSP, but regulatory approval must be obtained from the Financial Sector Conduct Authority (FSCA). The FSCA will assess the application to ensure that the Key Individual meets the Fit and Proper Requirements prior to approving the application. A Key Individual is required to meet the following Fit and Proper Requirements:
· Honesty, Integrity and Good-standing;
· Meet the competence requirements, i.e.:
- experience requirements specific to the products that they will be overseeing, a thorough understanding of the FAIS Act and possess managerial experience;
- possess the necessary qualification;
- complete the Regulatory Examination 1 (RE1);
- depending on the category of approval and financial products the Key Individual will be overseeing, they must complete the required CPD points, product specific training and class of business training.
· Having the necessary operational ability and resources to manage the activities of the FSP.
Understanding is Key
What are the Responsibilities of a Key Individual?
A Key Individual is in a position of trust, which means that it is a fiduciary role that should not be taken lightly. At all times, a Key Individual is required to act with the due care, skill and diligence in carrying out their duties. In carrying out their duties and responsibilities, a Key Individual must ensure that:
The FSP complies with the FAIS Act, the relevant codes of conduct and standards issued by the Regulatory Authority;
·Maintains policies and procedures for compliance with the above regulations;
- The FSP remains Fit and Proper;
- All license conditions are complied with;
- Must have adequate oversight of advice and intermediary services rendered to clients;
- It’s Key Individuals remain fit and proper;
- The FSP maintains an updated central register of representatives. All representatives must meet the competence requirements, comply with the codes of conduct and must be registered to act as a representative on behalf of the FSP. Where a representative is under supervision, careful attention must be paid to the services rendered by such representatives and that the representative’s supervisor is ensuring sufficient oversight and training of the representative under supervision;
- Juristic representatives, if any, remain fit and proper;
- They conduct regular perform reviews with the representatives and provide training where necessary;
- They remain update to date with legislation impacting the industry;
- Compliance with regulatory submissions;
- Maintains a relationship with the Regulator overseeing the industry.
Honesty, integrity, and a good standing are essential for the role of a Key Individual, as the distinctions between this role and that of a Compliance Officer can often become unclear.
Discover our online FAIS and Compliance courses to comprehend the critical differences.