Checklist for Compliance: What Brokers Need to Keep on File for Retail Clients According to FAIS and FICA Regulations
Compliance with the Financial Advisory and Intermediary Services (FAIS) Act and the Financial Intelligence Centre Act (FICA) regulations is crucial for Financial Service Providers (FSPs) when dealing with clients. To meet regulatory requirements, FSPs must maintain a comprehensive compliance file for each client. In this blog post, we provide a general checklist of the items that should be included in a compliance file for a retail client in accordance with FAIS and FICA regulations. Please note this might not cover all instances and each client and product type has some changes
Compliance File Checklist:
Disclosure documentation: A letter of engagement outlining the services provided, fees and commissions charged, and any potential conflicts of interest.
Record keeping: A record of all client interactions, including meetings, telephone calls, emails, and correspondence.
Needs analysis: A thorough needs analysis to ensure that the products and services offered are suitable for the client's needs, objectives, and risk profile.
Risk profiling: A risk profiling assessment to determine the client's risk appetite and tolerance.
Product information: A detailed explanation of the products and services being offered, including any risks involved.
Compliance requirements: All compliance requirements related to FICA KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations.
Record of advice: A record of all advice given to the client, including the rationale behind the advice.
Quotations: A record of all quotations provided to the client.
In conclusion, maintaining a comprehensive compliance file is essential for FSPs in the financial services industry. By ensuring that all necessary documentation and records are kept, FSPs can demonstrate their commitment to meeting regulatory requirements and providing clients with the necessary protection and information to make informed decisions. As a compliance outsourcing firm, we remind our clients to keep a detailed compliance file for each retail client in accordance with FAIS and FICA regulations. By doing so, our clients can have peace of mind knowing that they are meeting regulatory requirements and promoting ethical business practices within the industry.
by: Horizon Compliance team