To FAIS or not to FAIS

A question we get asked most often is whether or not a specific service falls within the ambit of the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS, and soon to be known as the Conduct of Financial Institutions Act).

The first leg of this assessment focuses on whether or not the specific Product or basket of Products are defined in the FAIS Act. The second leg focuses on the definition of Advisory and Intermediary Services. Remember: the FAIS Act does not regulate the products themselves but rather only the Advisory and Intermediary Services provided in conjunction with these products. What must also be taken into account is whether or not a product falls within any specific exemptions, such as credit and property.

​"Remember: the FAIS Act does not regulate the products"
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If one establishes that your business does not need to comply with FAIS, good for you. If  you do establish that you need to comply, one needs to move on to more in depth assessments such as which categories to register for and so on but I won't get into it in this post. 

Ultimately one would have to do a thorough review of a business to ensure whether or not one needs to comply with the FAIS Act. It is certainly one of the most convoluted pieces of legislation we have in South Africa and isn't for the fain of heart. It is also important that you ensure you comply with any other pieces of legislation that regulate your Product(s) because, as I mentioned earlier, FAIS does not regulate your product. 

For more info or assistance give us a shout at hello@horizoncompliance.co.za or on 0723511653.