KEY INDIVIDUAL: OPERATIONAL ABILITY ASSESSMENT - Board Notice 194 of 2017

Section 42(1)

A KI must have the operational ability to effectively manage and oversee the financial services related activities of the FSP or juristic representative and the financial services in relation to the financial product for which the KI was approved or appointed.

Section 42(2)

A KI, where he or she is:

(a)     Approved or appointed as a KI of more than one FSP or juristic representative; or

(b)     Approved or appointed as a KI of an FSP or juristic representative and appointed as a representative of an FSP other than the first mentioned FSP,

must be able to demonstrate to the Registrar, in a form and manner which may be determined by the Registrar, that he or she has the required operational ability to effectively and adequately manage or oversee the financial services related activities of all the FSP`s or juristic representatives for which the KI was approved or appointed.

Section 42(3)

An FSP must, on a regular basis, assess the operational ability of its KI`s to adequately and effectively perform their functions taking into account individual circumstances, the nature, scale, range and complexity of the FSP`s financial services related activities and whether the KI`s are approved as KI`s or appointed as representatives of other FSP`s

We are aware of a KI who received a R800 000 Administrative Sanction for non-compliance in this space.

The risk of unintentional non-compliance is in Section 42(3) above…FSP`s don`t on a regular basis, assess the Operational Ability of its KI`s

As we all know the Regulators issue requirements on WHAT Accountable Institutions need to comply with, but guidelines on HOW to do it is normally limited.

Based Section 42(3) of Board Notice 194 of 2017 REGSERV [Pty] Ltd, which is an FSCA approved Compliance Practice, compiled a KI Operational Assessment Toolkit to facilitate with the compliance requirements in Section 42(3).

Please contact us on our website “contact space” [www.regserv.co.za] or via email: service@regserv.co.za for assistance with KI Operational Assessment.

Visit our REGSERV website News blog frequently for HELP offerings with the HOW regarding FIC, FSCA and related Compliance matters.