Fit and Proper
Determination of Fit and Proper Requirements for Financial Services Providers
The FSCA's detailed Board Notice setting out the four pillars of fit and proper standards — honesty and integrity, competence, operational ability, and financial soundness — applicable to FSPs, Key Individuals, and Representatives.
Sections
3
Duties
3
Questions
4
Assessment from
R 50 000
What it covers
Board Notice 194 of 2017 (as amended), issued under the Financial Advisory and Intermediary Services Act, is the detailed regulatory instrument that operationalises the fit and proper standard referenced throughout FAIS and related financial sector legislation. While the FAIS Act establishes the high-level requirement, this Determination specifies the precise standards across four pillars: (1) Honesty and Integrity — covering criminal record disqualifications, debarment history, and other character-related disqualifying factors; (2) Competence — covering the specific qualifications recognised by the FSCA per product category, the Regulatory Examinations (RE1 for Key Individuals and certain senior roles, RE5 for Representatives), Class of Business training required before advising on a new product category, and product-specific training; (3) Operational Ability — covering the systems, processes, and resources an FSP must have to ensure ongoing compliance, including supervision arrangements for representatives still completing competence requirements; and (4) Financial Soundness — applicable specifically to the FSP entity (and in limited circumstances Key Individuals), requiring solvency and the ability to meet financial obligations as they fall due. This Determination is the technical reference document FSPs must apply when constructing their fit and proper assessment and tracking processes, distinct from but directly supporting FAIS Act s8 compliance.
Does this apply to you?
It applies if
- Your organisation is a licensed FSP under the FAIS Act, or seeks to become one
- Your organisation employs or contracts Key Individuals or Representatives who render financial services
- Your organisation is making any new appointment to a Key Individual or Representative role and must apply the four-pillar assessment before appointment
Thresholds that change what's required
- The specific competence requirements (qualifications, RE1/RE5, Class of Business training) vary by the financial product categories the individual will advise on or intermediate
Exemptions
- Certain very specific, narrowly defined administrative roles that do not constitute rendering a financial service as defined under FAIS may fall outside individual fit and proper requirements, though the FSP itself remains subject to operational ability and financial soundness standards
What non-compliance costs
Maximum fine
R 10 000 000
Imprisonment
Penalties flow through the underlying FAIS Act provisions — rendering financial services through individuals who do not meet fit and proper requirements is treated as a contravention of FAIS s8 and s13
Civil exposure
Clients who receive advice from an individual who did not meet fit and proper standards have strengthened grounds for an Ombud complaint or civil claim, since the advice itself may be considered tainted by the underlying competence or integrity deficiency
Reputational
FSCA debarment of an individual found not to meet fit and proper standards, particularly for honesty and integrity failures, is published and effectively ends that individual's ability to work in the regulated financial services industry
What the assessment covers
The assessment works through 4 questions across 3 duties, scored out of 49. Each answer generates the specific actions needed to close or prove that duty — and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on Fit and Proper
Run the assessment, get your score, and get the exact list of what to fix — with the evidence trail an auditor will ask for.