Authorised financial services providers usually incorporate the terms of the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act) into the employment contracts of their representatives.  A ‘representative’ is defined as:

“any person . . . who renders a financial service to a client for and on behalf of a financial services provider, in terms of conditions of employment or any other mandate …..”.

An FSP is obliged to maintain and update a register of representatives and it must be available for reference or inspection.  FSPs must also comply with the “fit and proper requirements” of the FAIS Act.  See below for the meaning of “fit and proper requirements”.  For more details concerning the judgment see – Debarment of representative: Right to be heard.

R v Odinfin (Pty) Ltd (86753/2014) [2016] ZAGPPHC 486 (21 June 2016) per JW Louw J.

Edited versionof para [3] of the judgment

The phrase “fit and proper requirements” is defined in s 1 as “the requirements published under s 6A”.  Section 6A provides that the registrar of FSP’s may determine fit and proper requirements for representatives. Such requirements were published by the registrar in the Government Gazette of 15 October 2008.

Part II of the publication is headed “Personal character qualities of honesty and integrityand provides that a representative must be honest and have integrity.  In determining compliance the Registrar has access to certain information.

The following factors are prima facie evidence that representatives do not qualify; #1  if they have been denied membership of certain bodies because of dishonesty, negligence, incompetence or mismanagement, sufficiently serious to impugn the honesty and integrity of the representative; or #2  within a preceding period of five years, they have been found guilty:

  • in any criminal proceedings or liable in any civil proceedings by a court of law of having acted fraudulently, dishonestly, unprofessionally, dishonourably or in breach of a fiduciary duty;
  • by any statutory professional body or voluntary professional body of dishonesty, negligence, incompetence or mismanagement, sufficiently serious to impugn the honesty and integrity of the representative;
  • by any regulatory or supervisory body, or had their authorisation to carry on business refused, suspended or withdrawn because of dishonesty, negligence, incompetence or mismanagement, sufficiently serious to impugn the honesty and integrity of the representative.

See also: