Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002)

Codes of Conduct

Amendment of the General Code of Conduct for Authorised FSPs and Representatives, 2020

Part I : Introductory provisions

Purchase

(1)	In this Code "the Act" means the Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002), a word or expression to which a meaning has been assigned in the Act shall have that meaning, and, unless the context indicates otherwise-

"advertisement"

means any communication published through any medium and in any form, by itself or together with an other communication, which is intended to create public interest In the business, financial services, financial products or related services of a provider, or to persuade the public (or a part thereof) to transact in respect of a financial product, financial service or related service of the provider in any manner, but which does not purport to provide detailed information to or for a specific client regarding a specific financial product, financial service or related service;

[Definition substituted by section 2(a) of Notice No. 706, GG43474, dated 26 June 2020]

"associate"

(a)	in relation to a natural person, means—

(i)	a person who is recognised in law or the tenets of religion as the spouse, life partner or civil union partner of that person;

(ii)	a child of that person, including a stepchild, adopted child and a child born out of wedlock;

(iii)

a parent or step-parent of that person;

(iv)	a person in respect of which that person is recognised in law or appointed by a Court as the person legally responsible for managing the affairs of or meeting the daily care needs of the first mentioned person;

(v)	a person who is the spouse, life partner or civil union partner of a person referred to n subparagraphs (ii) to (iv);

(vi)	a person who is in a commercial partnership with that person;

(b)	in relation to a juristic person-

(i)	which is a company, means any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary;

(ii)	which is a close corporation registered under the Close Corporations Act, 1984 (Act No. 69 of 1984), means any member thereof as defined in section 1 of that Act;

(iii)

which is not a company or a close corporation as referred to in subparagraphs (i) or (ii), means another juristic person which would have been a subsidiary or holding company of the first-mentioned juristic person—

(aa)	had such first-mentioned juristic person been a company; or

(bb)	in the case where that other juristic person, too, is not a company, had both the first-mentioned juristic person and that other juristic person been a company;

(iv)	means any person in accordance with whose directions or instructions the board of directors of or, in the case where such juristic person is not a company, the governing body of such juristic person is accustomed to act;

(c)	in relation to any person—

(i)	means any juristic person of which the board of directors or, in the case where such juristic person is not a company, of which the governing body is accustomed to act in accordance with the directions or instructions of the person first-mentioned in this paragraph;

(ii)	includes any trust controlled or administered by that person.

[Definition inserted by section 2(a) of Board Notice 58 of 2010]

"company"

has the meaning assigned to it in the Companies Act 2008 Act No. 71 of 2008);

[Definition substituted by section 2(b) of Notice No. 706, GG43474, dated 26 June 2020]

"comparative"

refers to a direct or indirect comparison between providers or between financial products, financial services or related services of one or more provider or product supplier;

[Definition inserted by section 2(c) of Notice No. 706, GG43474, dated 26 June 2020]

"conflict of interest"

means any situation in which a provider or a representative has an actual or potential interest that may, in rendering a financial service to a client,—

(a)	influence the objective performance of his, her or its obligations to that client; or

(b)	prevent a provider or representative from rendering an unbiased and fair financial service to that client, or from acting in the interests of that client,

including but not limited to—

(i)	a financial interest;

(ii)	an ownership interest;

(iii)

any relationship with a third party;

[Definition inserted by section 2(a) of Board Notice 58 of 2010]

"Direct marketing"

means the rendering of financial services by way of telephone, internet, digital application platform, media insert, direct or electronic mail, but excludes the publication of an advertisement;

[Definition substituted by section 2(d) of Notice No. 706, GG43474, dated 26 June 2020]

"Direct marketer"

means a provider who, in the normal course of business, provides all or the predominant part of the financial services concerned in the form of direct marketing;

"distribution channel"

means—

(a)	any arrangement between a product supplier or any of its associates and one or more providers or any of its associates in terms of which arrangement any support or service is provided to the provider or providers in rendering a financial service to a client;

(b)	any arrangement between two or more providers or any of their associates, which arrangement facilitates, supports or enhances a relationship between the provider or providers and a product supplier;

(c)	any arrangement between two or more product suppliers or any of their associates, which arrangement facilitates, supports or enhances a relationship between a provider or providers and a product supplier;

[Definition inserted by section 2(b) of Board Notice 58 of 2010]

"endorsements"

refer to public statements declaring the virtues of a financial product, financial service or related service of a provider or recommending the entering into of a financial product, financial service or related service;

[Definition inserted by section 2(e) of Notice No. 706, GG43474, dated 26 June 2020]

"fair value"

has the meaning assigned to it in the financial reporting standards adopted or issued under the Companies Act, 1973 (Act No. 61 of 1973);

[Definition inserted by section 2(b) of Board Notice 58 of 2010]

"financial interest"

means any cash, cash equivalent—

(a)	an ownership interest;

(b)	training, that is not exclusively available to a selected group of providers or representatives, on—

(i)	products and legal matters relating to those products;

(ii)	general financial and industry information;

(iii)

specialised technological systems of a third party necessary for the rendering of a financial service; but excluding travel and accommodation associated with that training;

(c)	a qualifying enterprise development contribution to a qualifying beneficiary entity by a provider that is a measured entity;

[Paragraph (c) inserted by section 2(f) of Notice No. 706, GG43474, dated 26 June 2020]

"FSC "

means the Financial Sector Code published in terms of section 9(1) of the Broad-Based Black Economic Empowerment Act, (Act 53 of 2003), as amended from time to time;

[Definition inserted by section 2(g) of Notice No. 706, GG43474, dated 26 June 2020]

"holding company"

has the meaning assigned to it in the Companies Act, 2008 (Act No. 71 of 2008);

[Definition substituted by section 2(h) of Notice No. 706, GG43474, dated 26 June 2020]

"immaterial financial interest"

means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1 000 in any calendar year from the same third party in that calendar year received by—

(a)	a provider who is a sole proprietor; or

(b)	a representative for that representative’s direct benefit;

(c)	a provider, who for its benefit or that of some or all of its representatives, aggregates the immaterial financial interest paid to its representatives;

[Definition inserted by section 2(b) of Board Notice 58 of 2010]

"loyalty benefit"

means any benefit (including a so-called cash- or premium-back bonus) that is directly or indirectly provided or made available to a client by a provider or a product supplier or an associate of the provider or product supplier, which benefit is wholly or partially contingent upon—

(a)	the financial product with that provider or product supplier remaining in place;

(b)	the client continuing to utilise a financial service of that provider or product supplier;

(c)	the client increasing any benefit to be provided under a financial product; or

(d)	the client entering into any other financial product or benefit or utilising any related services offered by that provider, product supplier or their associates;

[Definition inserted by section 2(i) of Notice No. 706, GG43474, dated 26 June 2020]

"measured entity"

has the meaning assigned to it in the FSC insofar it relates to a qualifying enterprise development contribution;

[Definition inserted by section 2(j) of Notice No. 706, GG43474, dated 26 June 2020]

"no-claim bonus"

mean any benefit that is directly or indirectly provided or made available to a client by a product supplier in the event that the client does not claim or does not make a certain claim under a financial product within a specified period of time;

[Definition inserted by section 2(j) of Notice No. 706, GG43474, dated 26 June 2020]

"new entrant"

means a person who has never been authorised as a financial services provider or appointed as a representative by any financial services provider"

[Definition inserted by section 2(a) of Board Notice 146 of 2014]

"plain language"

means communication that—

(a)	is clear and easy to understand;

(b)	avoids uncertainty or confusion; and

(c)	is adequate and appropriate in the circumstances.

taking into account the factually established or reasonably assumed level of knowledge of the person or average persons at whom the communication is targeted;

[Definition inserted by section 2(k) of Notice No. 706, GG43474, dated 26 June 2020]

"provider"

means an authorised financial services provider, and includes a representative;

"publish"

means—

(a)	to make generally known;

(b)	to make a public announcement of;

(c)	to disseminate to the public; or

(d)	to produce or release for distribution; and

"publication" has a corresponding meaning;