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Unit Standard No.12164Page 58

WHO OR WHAT IS A FINANCIAL SERVICES PROVIDER (FSP)?

DEFINITION:

In terms of the Act, an FSP is defined as

any person, other than a representative, who as a regular feature of the business of such person furnishes advice, or renders any intermediary service, or both.

(for definition of “advice” and “intermediary service”, see glossary on previous page)

In terms of section 7 of FAIS, no person (including juristic persons) will be able to act as an FSP, unless such person has been issued with a licence by the Registrar. In its application to become an authorised FSP, all relevant parties’ details must be disclosed for example, Key Individuals, Representatives and details about the FSP itself.  A licence may be granted, subject to certain conditions and/or restrictions which results in categorisation of FSP’s according to the type and level of service rendered.  

FSP’s AND THEIR REPRESENTATIVES

The relationship between the FSP and representatives is governed by a service contract or other mandatory agreement, and the FSP must accept responsibility for the activities of the representatives falling within the contract or mandate.

Examples –

In the hypothetical case of ABC Brokerage (Pty) Ltd, with four financial advisors, the brokerage will be the FSP and the advisors, the representatives.

In another instance, XYZ Life Pty Ltd, is a product supplier and a Financial Services Provider, which also use the services of tied agents to market their products exclusively to XYZ.  In this instance, the company would be the FSP (ie the product supplier) and its agents would be the representatives of the FSP.

INSMAT final materials31/10/03

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