(a) transferable securities and instruments, including -

(b) participatory interests in collective investment schemes;

(c) long-term and short-term insurance contracts or policies;

(d) benefits provided by pension fund organisations by virtue of membership;

(e) foreign currency denominated investments;

(f) deposits as defined in section 1(1) of the Banks Act, 1990 (Act No 94 of 1990), and in section 1(1) of the Mutual Banks Act, 1993 (Act No 124 of 1993), respectively; (x)

(g) a medical aid benefit provided by a medical scheme;

(h) any other product similar in nature to any financial product referred to in paragraphs (a) to (g), inclusive, declared by the registrar by notice in the Gazette to be a financial product for the purposes of this Act;

(i) any combined product containing two or more of the financial products referred to in paragraphs (a) to (h), inclusive, of this definition; or

(j) any financial product issued by any foreign product supplier which is marketed in the Republic and which in nature and character is essentially similar or corresponding to a financial product referred to in paragraphs (a) to (i) of this definition; (x)

(xix) "Minister" means the Minister of Finance; (x)

(xx) "Office" means the office of the Ombudsman for Financial Advice established by section 19(1);

(xxi) "Ombudsman" means the Ombudsman for Financial Advice appointed in terms of section 20;

(xxii) "prescribed" means prescribed by regulation; (x)

(xxiii) "product supplier" means, subject to subsection (4), any person who or which issues a financial product to clients; (x)

(xxiv) "registrar" means the registrar of financial advisers referred to in section 2; (x)

(xxv) "regulation" means a regulation made under section 37 of this Act; (x)

(xxvi) "remuneration", in relation to the furnishing of advice, means any commission, fee or other benefit, whether pecuniary or not and whether direct or indirect, including a salary or wages of a fixed amount, as consideration for such furnishing of advice; (x)

(xxvii) "representative", in relation to an authorised financial adviser, means any person in the direct employment of or acting for or by arrangement with the authorised financial adviser irrespective of whether the remuneration of the representative is by way of salary, wages, commission or otherwise, and who performs for such adviser any of the advisory functions of a financial adviser; and includes any member, director, officer or partner of a juristic person who performs for such juristic person any of those functions (whether or not his or her remuneration is as aforesaid); (x)

(xxviii)"this Act" includes the regulations, rules made by the Board under section 25 and any applicable code of conduct; (x)

(xxix) "unsolicited call" means a personal visit or communication made to a client without the express prior consent or invitation of such client. (x)

(a) factual advice given merely –

(b) any other advisory activity exempted by the registrar, after consultation with the Advisory Committee, by notice in the Gazette from the provisions of this Act.

(a) be made in the form and manner determined by the registrar by notice in the Gazette or otherwise required by the registrar;

(b) be accompanied by -

(a) If any advertisement, brochure or similar document which relates to the advice business of a financial adviser, and which is being, or is to be, published by a person, is in the opinion of the registrar misleading or contrary to the public interest or contains an incorrect statement of fact, the registrar may by notice direct that person not to publish it or to cease publishing it or to effect the changes to it which the registrar deems fit.

(b) A notice contemplated in paragraph (a) shall be preceded by a procedure affording the person concerned a reasonable opportunity to be heard, and shall take effect on a date specified in such notice which may be a date prior to the date of the notice.

(a) to furnish the registrar within a specified period with any specified information or documents in the possession or under the control of that person which relate to the matter;

(b) to appear before the registrar at a specified time and place in connection with the matter.

(a) If a person contravened or is contravening section 7(1) of this Act, the registrar may -

(b) In deciding an application contemplated in paragraph (a)(ii), the Court -

(a) The Advisory Committee may appoint one or more subcommittees for the purposes of considering, and advising on, such matters relating to financial advisers as may be referred to such a subcommittee by the Advisory Committee.

(b) The Advisory Committee shall appoint as members of a subcommittee one or more of its members and, if it deems it necessary, one or more other persons for such periods of office as the Committee may from time to time determine.

(a) Any transaction concluded on or after the date contemplated in subsection (1) of this section between a product supplier and any client and which has been facilitated by advice furnished by a person who or which is or was not authorised to act as a financial adviser (or by any other person on behalf of such unauthorised person), will merely consequent on such lack of authorisation and without prejudice to any criminal proceedings against such supplier or adviser, not be enforceable: Provided that the client may elect within 30 days or any other period determined by the registrar after the date of the relevant transaction -

(b) The amounts recoverable under paragraph (a) (ii) must be determined by agreement between the parties involved or, in the absence of such agreement, by a Court on application by any one of the parties.

(c) Notwithstanding the provisions of paragraph (a), a Court may, on application by the product supplier or adviser concerned, declare such a transaction to be enforceable if it is satisfied -

(a) the prescribed information in regard to the business profile of the applicant, and in regard to the reputation record, financial soundness and competency record of the applicant and key individuals employed by the applicant; and

(b) information to satisfy the registrar that the applicant is a fit and proper person, taking into consideration the prescribed fit and proper requirements, and that the applicant has not been convicted of any criminal offence, excluding the prescribed offences of a minor or irrelevant nature.

(a) require an applicant to furnish any additional information, or require any information to be verified, as the registrar may deem necessary; and

(b) take into consideration any other information, derived from whatever source including any other regulatory or supervisory authority, as regards the applicant: Provided that such information is disclosed to the applicant and the latter is provided with a reasonable opportunity to respond thereto.

(a) The burden of satisfying the registrar that an applicant complies with all relevant requirements for an authorisation to act as financial adviser, shall lie with the applicant.

(b) The registrar may after consideration of an application grant or refuse the application.

(a) Where an application is granted, the registrar shall issue to the applicant a licence to act as an authorised financial adviser.

(b)(i) A licence shall lapse after a period of twelve months from the date of its issue, but shall be renewable on application by the authorised financial adviser to the registrar: Provided that where an application for renewal is not made before the date of the lapsing, the licence holder shall have a period of grace of 30 days with effect from the date of the lapsing, to apply for a renewal, and that if the renewal is then granted it shall be deemed to have taken effect on the date of the lapsing.

(ii) An application for a renewal of the licence may be granted or refused by the registrar, but shall only be granted if the registrar is satisfied that the applicant for renewal is still a fit and proper person for purposes of acting as an authorised financial adviser, and for which purpose the applicant may be required to confirm or supplement recorded information which served as a basis for the original granting of the authorisation.

(a) has since such issue or renewal contravened or not complied with any provision of this Act;

(b) has furnished the registrar with false or misleading information when making an application for authorisation or for renewal;

(c) is in a financially unsound position by virtue of an excess or possible excess of liabilities over assets;

(d) has since the issue or renewal been convicted of any criminal offence, excluding the prescribed offences of a minor or irrelevant nature; or

(e) is in terms of the provisions of the Companies Act, 1973 (Act No 61 of 1973), disqualified from serving as a director of a company,

(a) provisionally suspend or withdraw a licence pending a submission by the authorised financial adviser involved; and

(b) publish such provisional suspension or withdrawal by notice in the Gazette and, if deemed necessary by the registrar, in any other public media statement or announcement the registrar considers appropriate.

(a) must notify the authorised financial adviser of the relevant grounds thereof and, in the case of a suspension, of the period of intended suspension, and of any intended conditions attached thereto, and must provide the adviser with a reasonable opportunity to make a submission in response thereto; and

(b) may after consideration of such submission decline to proceed with the suspension or withdrawal, or decide to continue therewith in which case the registrar shall publish the suspension or withdrawal by notice in the Gazette and, if deemed necessary , in any public media statement or announcement the registrar considers appropriate.

(a) applies for exemption when submitting the application; and

(b) complies with the provisions of a directive of the registrar with regard to information still required.

(a) a person who or which is not an authorised financial adviser; or

(b) an authorised financial adviser, unless such person is able to provide confirmation, certified by the adviser, to clients that -

(a) be satisfied that representatives are fit and proper persons for the purpose of providing advice on behalf of the adviser; and

(b) ensure that the fit and proper requirements are equal to those that apply in respect of the authorisation of financial advisers in terms of this Act.

(a) contain every representative’s name and business address, and the capacity in which the representative acts for the adviser;

(b) specify the financial products and features thereof in which representatives are competent to give advice; and

(c) record their competencies in terms of qualifications and experience.

(a) information on the conduct of the representative as provided by the registrar, the Ombudsman or any other interested person;

(b) contravention by the representative of a provision of this Act; or

(c) whether the person is in a financially unsound position by virtue of an excess or possible excess of liabilities over assets, or has been convicted of any criminal offence contemplated in section 8(1)(c) of this Act.

(a) withdraw the authority in terms of which the representative is providing advice on behalf of the adviser; and

(b) remove the relevant name from the register referred to in section 11(5).

(a) must determine whether debarment will have the effect of debarring the relevant representative from giving any further advice in personal capacity or on behalf of any other authorised financial adviser than the financial adviser who or which has withdrawn the authority to provide advice on behalf of the latter;

(b) must determine the period of debarment;

(c) must publish the debarment of a representative by notice in the Gazette, and if deemed necessary by the registrar, in any other public media statement or announcement the registrar considers appropriate.

(a) act honestly and fairly, and with due skill, care and diligence, in the best interests of clients and the integrity of the financial services industry;

(b) have and employ effectively the resources and procedures necessary for the proper performance of professional activities in the furnishing of advice;

(c) seek from clients information (where appropriate and available) regarding their financial situations, financial product experience and objectives in connection with the services required;

(d) make adequate disclosure of relevant material information in transactions with clients;

(e) avoid conflicts of interests and, where they cannot be avoided, ensure that clients are treated fairly;

(f) comply with all applicable statutory or common law requirements applicable to the conduct of business,

(i) adequate disclosure principles and requirements, particularly as regards -

(ii) compliance with the following principles -

(iii) as regards advertising, the avoidance of advertisements or marketing communications which are unclear, unfair or misleading;

(iv) as regards requirements in respect of unsolicited calls (subject to legally permissible instances), including prohibitions and exemptions;

(v) requirements relating to cancellation of transactions in respect of financial products, including a prohibition on the entering into by product suppliers of transactions relating to life and funeral insurance or collective investment schemes unless notification of cancellation rights has been given, the nature and extent of cancellation rights and the consequences of the exercise thereof, including notification of authorised financial advisers involved; and

(vi) financial resource requirements, including the furnishing of security or cover to be maintained by authorised financial advisers, and mechanisms for adjustments of such requirements by the registrar in any particular case.

(a) authorised financial adviser who appoints one or more representatives; or

(b) group of two or more authorised financial advisers carrying on business in the format of a partnership or body corporate,

(a) An authorised financial adviser or group of such advisers referred to in subsection (1) must establish and maintain procedures to be followed by the adviser, or the group of advisers, and any representative involved in the giving of advice to clients, in order to ensure that the provisions of this Act, are fully complied with.

(b) Such procedures must be set out in a compliance manual which must be kept available on request for inspection by an inspector appointed under section 2 of the Inspection of Financial Institutions Act, 1998 (Act No 80 of 1998).

(a) of advice given to individual clients, including reasons for the advice given, and confirmation of the acceptance of advice so given;

(b) of dates and the nature of transactions facilitated between clients and product suppliers;

(c) of cancellations of transactions by clients which have come to the attention of the adviser;

(d) of complaints received and the nature of the complaints, together with an indication whether the complains have been resolved or not;

(e) of debarments of representatives, together with the reasons for the debarment;

(f) which represent an updated business profile, reputation record, financial soundness and competency record as required by or in terms of the provisions of this Act, and any significant changes in the business profile, reputation record, financial soundness record and competency record of the adviser since the original date of authorisation or, where previous reporting has been done, since the date of the last report;

(g) of the general compliance with the applicable code of conduct, stating exceptions relating thereto or specific acts of non-compliance which have come to the attention of the compliance officer or such adviser during the reporting period;

(h) of the continued fitness and properness of representatives of the authorised financial adviser to give advice on the latter’s behalf;

(i) to confirm continued compliance with the financial soundness or resource requirements for the adviser required by or in terms of this Act; and

(j) that will enable the drawing up of financial statements.

(a) whenever the external auditor furnishes copies of a report or other document or particulars contemplated in section 20(5)(b) of the Public Accountants’ and Auditors’ Act, 1991 (Act No 80 of 1991), also furnish a copy thereof to the registrar; and

(b) if the external auditor’s appointment is terminated for any reason -

(c) inform the registrar in writing of any irregularity or suspected irregularity in the conduct or the affairs of the authorised financial adviser concerned of which the auditor became aware in performing his functions as auditor and which, in the opinion of the auditor, is material.

(a) The furnishing, in good faith, by an external auditor of a report or information in terms of this section shall not be deemed to constitute a contravention of a provision of a law or a breach of a provision of a code of professional conduct to which the external auditor is subject.

(b) The failure, in good faith, by an external auditor to furnish a report or information in terms of this section shall not confer upon any person a right of action against the auditor which, but for that failure, the person would not have had.

(a) The registrar may in writing require an authorised financial adviser to terminate the appointment of an external auditor of that adviser, if the person concerned is no longer fit and proper to hold the office concerned.

(b) When the registrar intends to act as contemplated in paragraph (a), the registrar shall advise to the authorised financial adviser, and, unless it is impracticable to do so, to the person concerned, of the registrar’s intention and the reasons therefor, and the person concerned shall thereupon cease to perform the functions of his or her office.

(a) the contractual arrangement or other legal relationship between the complainant and any other party to the complaint; and

(b) the matters as may be specified by the Board under section 25(1)(a)(vi).

(a) has so practised as an advocate or an attorney for an uninterrupted period of at least 10 years;

(b) was involved for an uninterrupted period of at least 10 years in the tuition of law and has also practised as an advocate or attorney for such period as renders the person suitable for appointment as Ombudsman; or

(c) possesses such other experience and expertise as renders the person suitable for appointment as Ombudsman.

(a) The Ombudsman shall be appointed for a period of three years and may on expiry of any such term of office be re appointed.

(b) The remuneration and other terms of appointment of the Ombudsman shall be determined by the Board and shall be paid out of the funds of the Office.

(a) funds provided by the Board on the basis of a budget submitted by the Ombudsman to the Board and approved by the latter; and

(b) funds accruing to the Ombudsman from any other source.

(a) keep full and correct record of all funds received and payments made, and of all assets, liabilities and financial transactions of the Office;

(b) as soon as is practicable, but not later than three months after the end of every financial year, prepare annual financial statements reflecting, with appropriate particulars, all funds received and payments made during, and all such assets, liabilities and transactions at the end of, the relevant financial year.

(a) hire, purchase or otherwise acquire movable property, and let, sell or otherwise dispose of property so purchased or acquired;

(b) enter into an agreement with any person for the performance of any specific act or function or the rendering of specific services;

(c) insure the Office against any loss, damage, risk or liability;

(d) employ persons to assist the Ombudsman, determine their terms of appointment and, subject to such conditions as may be determined by the Ombudsman, delegate or transfer to any such employee any administrative function, power or duty vesting in the Ombudsman in terms of this Chapter;

(e) obtain professional advice as may reasonably be required; and

(f) in general, do anything which is necessary or expedient for the achievement of the object of the Ombudsman.

(a)

(b) the payment to the Office of a case fee by the authorised financial adviser involved in any complaint lodged with the Ombudsman against the adviser;

(c) liaison between the Ombudsman and the registrar, and administrative duties of these functionaries as regards mutual administrative support, exchange of information and reports, other regular consultations and avoidance of overlapping of their respective functions; and

(d) any other matter necessary or expedient for the better achievement of the objects of this section.

(a) must ensure that no rule is made under subsection (1) which in any material way detracts from or impinges on the independence of the Ombudsman;

(b) must publish in the Gazette rules made under subsection (1).

(a) must determine whether the requirements of the rules envisaged in section 25(1)(a)(iii) have been complied with;

(b) must in the case of any non-compliance act in accordance with the provisions of the rules made under that section; and

(c) must otherwise, subject to subsection (2), officially receive the complaint if it qualifies as a complaint as defined in section 1(1).

(a)

(b) The Ombudsman must decline to investigate any such complaint if, before the date of official receipt of the complaint, proceedings have been instituted in any civil court in respect of a matter which would constitute the subject-matter of the investigation.

(c) The Ombudsman shall not proceed to investigate a complaint officially received unless the Ombudsman has -

(a) an award against the respondent of such amount as the Ombudsman considers fair compensation for distress, inconvenience, prejudice or damage suffered by the complainant (hereinafter referred to as the "money award");

(b) a direction that the respondent takes such steps in relation to the complainant as the Ombudsman considers just and appropriate.

(a) A money award may provide for the amount payable under the award to bear interest at a rate and as from a date specified by the Ombudsman in the award.

(b) The Board may specify -

(c) A money award may not exceed the monetary limit (if any), but the Ombudsman may, if he or she considers that fair compensation requires payment of a larger amount, recommend that the respondent pay the complainant the balance.

(a) The Board may provide for the Ombudsman to have power, on determining a complaint, to award costs in accordance with the provisions of the rules.

(b) The rules may not provide for the making of an award against the complainant in respect of the respondent’s costs: Provided the rules may provide for the making of an award against the complainant in favour of the Office, for the purpose of providing a contribution to resources deployed in dealing with the complaint, if in the opinion of the Ombudsman -

(c) The rules may authorise the Ombudsman to order that the amount payable under the cost award bears interest at a rate and as from a date specified by the Ombudsman in the order.

(a) in the case of the complainant, appeal against the determination in the manner and within the period determined by the Board by notice in the Gazette to a Court;

(b) in the case of the authorised financial adviser or representative as respondent, take the determination on review to a Court.

(a) the Court may allow or disallow the appeal; and

(b) the decision of the Court shall have effect as a decision of the Ombudsman.

(a) insults the Ombudsman;

(b) anticipates a determination of the Ombudsman in any manner calculated to influence the determination;

(c) wilfully interrupts any proceedings conducted by the Ombudsman or misbehaves in any manner in the place where the proceedings are being conducted; or

(d) commits any act in connection with a complaint which, if committed before a court of law, would have constituted contempt of court,

(a) Where, following on any such investigation, the authorised financial adviser or representative involved does not agree with, or does not undertake to comply with, recommendations of the registrar as regards improvements, the registrar may apply to a Court for an order obliging the adviser or representative so to comply in the manner and within the period determined by the Court.

(b) The provisions of section 35(3) and (5) of this Act shall with the necessary changes apply in respect of any such order and an application for renewal of the licence of the authorised financial adviser involved.

(a) has contravened or not complied with any provision of this Act or is likely so to contravene or effect non-compliance;

(b) has appointed or is likely to appoint any debarred person as a representative; or

(c) has refused or failed to comply with any notice, directive or request issued by the registrar under, in terms of or pursuant to a provision of this Act,

(a) an amount determined by the Court as compensation for losses suffered by any other person in consequence of such refusal or failure;

(b) a penalty for punitive purposes in a sum determined in the discretion of the Court but not exceeding three times the amount of any profit and gains which may have accrued to the person involved as a direct result of any such act or omission;

(c) interest; and

(d) costs of suit on such scale as may be determined by the Court.

(a) the registrar shall, as a first charge against the trust account, be entitled to reimbursement of all expenses reasonably incurred in bringing proceedings under subsection (2) and in administering the distributions made to persons in terms of subsection (5); and

(b) the balance, if any (hereinafter referred to as the "distributable balance") shall be distributed by the registrar to the persons referred to in subsection (5), any funds remaining accruing to the registrar in official capacity.

(a) restricting the activities of any authorised financial adviser to clients of a specified category or categories or to advice of a specified nature; or

(b) prohibiting any representative of an authorised financial adviser to carry on activities in relation to the giving of advice with regard to clients in general, or a specified category or categories of clients, or in relation to advice of a specified nature.

(a) any matter which is required or permitted to be prescribed under this Act;

(b) information to be furnished on the submission of any application under section 8 of this Act, including information (also as regards key individuals involved) -

(c) a prohibition on -

(d) compliance arrangements and compliance monitoring systems;

(e) powers of the registrar to call for information from any person to which this Act, including the powers of the Court to issue orders, on application by the registrar, to enforce obligations in that regard; and

(f) generally, any matter deemed expedient or necessary by the Minister to prescribe for the better achievement of the objects of this Act and codes of conduct, the generality of this provision not being restricted by the provisions of any specific paragraph above.

(a) contravenes or fails to comply with a provision of sections 7(1), 11(1), (2) or (4), 36(4) or (6), or 43; or

(b) in attempting to obtain any authorisation in terms of a provision of this Act, deliberately makes a misleading, false or deceptive statement, or conceals any material fact,

(a) The registrar shall have the power, notwithstanding anything contrary contained in any law, to apply for the sequestration of the estate or winding-up, as the case may be, of an authorised financial adviser or representative.

(b) The provisions of any law regarding sequestration of the estate or winding-up of an authorised financial adviser or representative shall, subject to this section and with the necessary changes, apply to the application by the registrar for such sequestration or winding-up.

(a) a reference which relates to the inability of an authorised financial adviser or representative to pay debts shall be construed as relating also to the inability of the adviser or representative to comply with the financial soundness and resource requirements required by or in terms of this Act;

(b) in addition to the question whether it is just and equitable that the estate of or that an authorised financial advise or representative should be sequestrated or wound up, there shall be considered also the question whether it is in the interests of the clients of that adviser or representative that the estate of or that the adviser or representative should be sequestrated or wound up;

(c) the following sections of the Insolvency Act, 1936 (Act No 24 of 1936), namely -

(d) section 9(3)(b) of the Insolvency Act, 1936, shall not apply where the registrar makes the application to a Court;

(e) the following sections of the Companies Act, 1973 (Act No. 61 of 1973), namely -

(f) section 346(3) of the Companies Act, 1973, shall not apply where the registrar makes the application to a Court.

(a) it shall not be heard unless copies of the notice of motion and of all accompanying affidavits and other documents filed in support of the application are lodged with the registrar at least 15 days, or such shorter period as the Court may allow on good cause shown, before the application is set down for hearing; and

(b) the registrar may, if satisfied that the application is contrary to the interests of the clients of the adviser or representative concerned, join the application as a party and file affidavits and other documents in opposition to the application.

(a) petition for acceptance of the surrender of the estate of an authorised financial adviser or representative in terms of section 3 of the Insolvency Act, 1936 (Act No 24 of 1936);

(b) special resolution relating to the winding-up of an authorised financial adviser or representative as contemplated in section 349 of the Companies Act, (Act No 61 of 1973), shall be registered in terms of that Act, and no special resolution in terms of the constitution of an adviser or representative which is not a company; and

(c) written resolution relating to the winding-up of an authorised financial adviser or representative as contemplated in section 67 of the Close Corporations Act, 1984 (Act No. 69 of 1984), shall be registered in terms of the said section,

(i) unless a copy thereof has been lodged with the registrar and he or she has, by notice to the adviser or representative concerned, declared that arrangements satisfactory to the registrar have been made to meet all liabilities under transactions entered into with clients prior to sequestration or winding-up, as the case may be; or

(ii) if the registrar, by notice to the adviser or representative concerned, declares that the resolution or petition is contrary to this Act.

(a) The registrar shall determine the fees payable to the registrar by any person seeking the approval of, or a determination or a decision by, or the performance of any other act by, the registrar under this Act or any other law.

(b) The fees contemplated in paragraph (a) shall be payable in the manner and be subject to the requirements as may be determined by the registrar.

(a) A person who fails to furnish the registrar with a return, information or document, as provided by this Act, within the specified period or any extension thereof, shall, irrespective of any criminal proceedings instituted against the person under this Act, be liable to a penalty not exceeding R1 000 or the higher prescribed amount for every day during which the failure continues, unless the registrar, on good cause shown, waives the penalty or any part thereof.

(b) A penalty contemplated in paragraph (a) shall be imposed by notice by the registrar on the person concerned, and such imposition shall be preceded by a procedure affording such person a reasonable opportunity to be heard, and shall take effect on a date specified in such notice of the registrar which may be a date prior to the date of the notice.

(a) A person who or which is liable to pay the fees or a penalty contemplated in subsections (1)(a) or (3)(a) respectively, and who or which fails to pay the amount due on the date or within the period as determined, shall at the rate, and calculated in the manner as may be prescribed, pay interest on the amount outstanding and on unpaid interest.

(b) The fees and penalties, and interest owed in respect thereof, shall be debts due to the Board and may be recovered by the Board in a Court.

(a) to any department or organ of state, foreign financial or investment services regulatory or supervisory authority, or any other regulatory or supervisory authority for financial or investment services in the Republic, including the Registrar of Medical Schemes and a self-regulatory body approved by the Board, if the registrar is of the opinion that such information will be of importance to the relevant department or organ of state, regulatory or supervisory authority, Registrar of Medical Schemes or self-regulatory body; and

(b) to any foreign financial or investment services regulatory or supervisory authority any information required in terms of any agreement, communiqué or memorandum of understanding concluded by the Board or the registrar with any such authority:

(a) the rendering of advice as contemplated in this Act by the applicant is already partially or wholly regulated by any other law; or

(b) the application of the said section to the applicant will cause the applicant or its clients financial or other hardships or prejudice; and

(c) that the granting of an exemption will not militate against the public interest, will not prejudice the interests of clients and will not frustrate the achievement of the objects of this Act.

(a) may attach to any exemption so granted reasonable requirements or impose reasonable conditions, having regard to the factors mentioned in subsection 1(a), (b) and (c), with which the applicant shall comply either before or after the effective date of the exemption in the manner and during the period determined by the registrar; and

(b) shall determine the period of the exemption.

(a) The registrar may in any case not provided for in this Act on written application, exempt any person from any other provision of this Act.

(b) The provisions of subsections (1)(b) and (c), (2) and (3) of this section shall with the necessary changes apply in respect of any exempt referred to in paragraph (a).

"(xii) any ‘authorised financial adviser’ or ‘representative’ as defined in section 1(1) of the Financial Advisers Act, 1999;".

(a) Public and industry involvement and input were obtained on an extensive basis. A first draft of the Bill was circulated for comment during March 1999. Several television and radio talk shows on the Bill took place. Public hearings on the Bill were also held at major centres across the country.

(b) The original draft was revised in view of comments received. The revised version was designed to be free-standing and complete as far as possible. Reference is made in the Bill to an envisaged new Collective Investment Schemes Control Act which has been forwarded to the Ministry of Finance for cabinet approval. This Act will deal comprehensively with investment schemes where a pooling of clients’ fund occur. It is envisaged that this Act will came into operation before the Bill becomes law.

(c) There was a consistent endeavour to produce a more "user friendly" Bill. The language and content have been simplified to ease interpretation and to promote clarity.

(d) The provisions of the first draft were reconsidered as to their purpose and significance and, unless found sufficient, they were deleted or reformulated.

(e) A deliberate attempt was made to create regulatory flexibility by providing for circumscribed discretionary power.

(f) Where the powers of the Registrar are such as to increase the ability to act swiftly and decisively, sufficient checks and balances were introduced to protect fundamental rights.

(g) Due to the costs associated with compliance, there was an endeavour not to impose any new or more costly regulatory requirements than the ones in the first draft. Wherever unnecessary costs resulted from regulation under the first draft, these have been removed.

(h) It was accepted that it would not be in the public interest if the authorisation and compliance requirements are too strict or burdensome for the authorised financial advisers and their representatives. Consequently provision is firstly being made for consultation with the Advisory Committee on Financial Advisers (advisers and clients to be equally represented) in the making of regulations on the fit and proper requirements for authorisation as well as the drafting of codes of conduct. Provision is secondly being made for phasing in of the authorisation provisions and the granting of exemptions without sacrificing regulatory standards.

(i) Several enforcement provisions already appearing in other Acts of Parliament have with the necessary changes been included in the Bill, e.g. the establishment of a statutory ombudsman (Part 1 of Chapter VI); the granting of civil remedies to the registrar (Clause 34); the declaration of undesirable practices (Clause 36); and sequestration and winding-up provisions (Clauses 40 and 41).

(a) the creation of the office of the Registrar of Financial Advisers, being the Executive Office of the Financial Services Board ("FSB"), is provided for in Clause 2;

(b) Clause 3 deals with the way in which the Registrar interacts with the persons to which the Act applies;

(c) Specific powers for the registrar to intervene swiftly and effectively are provided for in Clause 4;

(d) The Advisory Committee on Financial Advisers is established in terms of Clause 5 and its general functioning is provided for;

(e) The delegation of functions by the Minister of Finance, the FSB and the Registrar is provided for in Clause 6.

(a) Clause 7 prohibits a person from acting as a financial adviser unless authorised by the using of a licence by the Registrar. Provision is also made for the consequences of a transaction concluded by a client with a product supplier which has been facilitated by advice provided by an unauthorised financial adviser;

(b) Clause 8 deals with the applications of persons wishing to act as financial advisers, setting out the requirements and powers of the Registrar as regards granting or refusal of applications;

(c) Clause 9 deals with circumstances where authorisations may be withdrawn or suspended;

(d) Clause 10 deals with the granting of exemptions to product suppliers who or which is authorised as financial institutions in terms of other legislation from submitting all information otherwise required from an applicant.

(a) Clause 11 sets out their qualifications and authority and obliges authorised financial advisers to keep proper records of them and to ensure that they comply with applicable codes of conduct;

(b) Clause 12 regulates the debarment of persons to act as representatives of authorised financial advisers where they are no longer fit and proper persons.

(a) Clause 13 empowers the Registrar to draft and publish such codes in consultation with the Advisory Committee and other interested parties;

(b) Clause 14 deals exhaustively with the principles on which such codes shall be based, comprising inter alia, sound principles of business conduct, and requirements in respect of proper disclosures, advertising, unsolicited calls, cancellations of agreements, and the financial resource requirements of such advisers.

(a) Clause 15 requires confirmation of advices;

(b) Clause 16 requires the appointment of compliance officers and sets out compliance arrangements;

(c) Clause 17 requires the maintenance of certain records and imposes certain reporting duties;

(d) Clause 18 sets out the required auditing requirements.

(a) Clause 19 provides for the establishment of the Office of the Ombudsman for Financial Advice ("the Office"). It also makes clear that the object of the scheme is to resolve disputes quickly and with minimum formality;

(b) Clause 20 provides for the appointment of the Ombudsman by the FSB;

(c) Clause 21 provides for the funding of the Office. The budget is to be approved by the FSB;

(d) Clause 22 provides for the designation of the Ombudsman as the Accounting Officer for the handling of the funds of the Office;

(e) General administrative powers for the performance of functions are granted to the Ombudsman in terms of Clause 23;

(f) Clause 24 determines that the disestablishment and liquidation of the Office may only be done in terms of an Act of Parliament;

(g) The FSB will in terms of Clause 25 be able to make rules, making clear who can use the scheme and in what circumstances, as well as regarding the procedure to be applied to disputes. The FSB may set case fees and also impose special levies on authorised financial advisers for funding purposes;

(h) Provision is made in Clause 26 for the promotion by the registrar of client education on complaint procedures;

(i) Clause 27 deals with the receipt of complaints, prescription requirements and jurisdiction of the Ombudsman in the investigation of complaints;

(j) Clause 28 provides for investigation powers and the procedures to be followed by the Ombudsman regarding the disposal of complaints;

(k) Determinations by the Ombudsman is provided for in Clause 29. If a complaint is determined in favour of a complainant, the respondent may be ordered to pay compensation up to a maximum limit which may be set by the FSB. The limit may be different for different kinds of complaints. The respondent may also be ordered to take steps to rectify the matter complained of. The FSB may make rules authorising the award of costs by the Ombudsman. It is believed that it is prudent to provide the FSB with the ability to make rules giving the Ombudsman the discretion to make a cost award against a complainant in extreme cases. Provision is also made for the enforcement of awards made;

(l) Clause 30 provides that the determinations of the Ombudsman are to be binding upon authorised financial advisers, but the complainant may choose whether or not to accept the Ombudsman’s determination and may instead pursue the matter in the Court. Normal court-based procedures can sometimes provide an inherent advantage to the better-resourced party. It is a characteristic of ombudsman scheme (e.g. the ombudsman schemes for short- and long-term insurance in S.A. and four of the five current Ombudsman schemes in the UK) not to allow for an appeal against an Ombudsman’s decision by a respondent. Such feature is consistent with the objective of resolving disputes quickly and with minimum formality. The expectation is that the Ombudsman’s procedures will be fair and that therefore no external right of appeal will be necessary because of constitutional requirements on fair hearings. The option of judicial review will of course be open to respondents (and complainants) once the ombudsman’s determination has been made;

(m) Clause 31 requires the Ombudsman to submit an annual report to the FSB;

(n) Provision is made in Clause 32 for penalties for acts which may result in the Ombudsman not achieving his or her object.

(a) The Registrar may in terms of Clause 33 order a special investigation of the affairs of an authorised financial adviser or representative where the Registrar identifies compliance weaknesses in such affairs;

(b) Clause 34 vests powers in the Registrar to apply to the Court for orders restraining unlawful conduct by authorised financial advisers, representatives and other persons and so to apply, in cases where such orders are disobeyed, for compensation orders in favour of person who suffered damage or losses in consequence of refusal or failure to comply with Court orders and for the imposition of civil fines;

(c) Clause 35 vests intervention powers in the Registrar to apply to the Court for orders restricting the activities of authorised financial advisers and representatives where necessary;

(d) Clause 36 regulates the declaration by the Registrar of undesirable business practices for authorised financial advisers;

(e) Clause 37 grants power to the Minister of Finance to make regulations on a large range of detailed matters relevant to the contents of the Bill, to supplement the substantive provisions of the Bill;

(f) Clauses 38 and 39 regulate the offences under the provisions of the Bill and the assessment of fines and penalties by the Court;

(g) Clauses 40 and 41 provide for the sequestration of estates of and the winding-up of authorised financial advisers or representatives.

(a) Clause 42 saves the common law rights of clients to take civil action against authorised financial advisers or representatives, e.g. actions for damages on the ground of breaches of statutory duties;

(b) Clause 43 regulates the confidentiality of information obtained in the course of performing functions under the Bill;

(c) Clause 44 regulates fees and penalties payable to the Registrar;

(d) Clause 45 regulates disclosure of information between the Registrar and other foreign or domestic supervisory or regulatory authorities, and to State departments or organs, and self-regulating bodies;

(e) Clause 46 contains the customary limitation of liability provisions as regards functionaries acting under the Bill in any bona fide but not grossly negligent manner;

(f) Clause 47 contains transitional and other exemption provisions enabling the Registrar to grant exemptions from the provisions of the Act in cases where the application of the Act, at its commencement, may cause prejudice or hardship to persons suddenly confronted with licensing requirements, and where the granting of exemptions will not be inimical to the public interest;

(g) Clause 48 provides for an amendment to the definition of "financial institution" in the Financial Services Board Act, 1990 ("the FSB Act") to make the provisions of the FSB Act, the Financial Institutions (Investment of Funds) Act, 1984 and the Inspection of Financial Institutions, 1998 applicable to financial advisers and representatives.

(h) Clause 49 contains the customary short title and commencement provision of the Bill.