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Unit Standard No.12164Page 62

It appears from the above definition that the type of FSP would most likely be a Discretionary Investment Manager, who renders intermediary services of a discretionary nature, without implementing any bulking.  (Someone who would register as  an Investment Manager in terms of FMCA & SECA).  In this instance, a client would give a mandate to the Investment Manager and he would move the client’s funds around at his discretion.

FSP Category III  (Administrative FSP)  

This Category of FSP has been defined in the Determination of Fit & Proper as:

“All persons who require licences to render financial services as an Administrative FSP as set out in the relevant application …”

If one goes to the “relevant application” referred to, namely the CODE OF CONDUCT FOR ADMINISTRATIVE AND DISCRETIONARY FSP’s, the definition of this category of FSP is as follows:

“Administrative FSP” means a FSP, other than a discretionary FSP –

(a) that renders intermediary services in respect of financial products referred to in paragraphs (a), (b), (c) (excluding any short-term insurance contract or policy referred to therein), (d) and (e), read with paragraphs (h), (i) and (j) of the definition of “financial product” in section 1(1) of the Act, on the instructions of a client or another FSP and through the method of bulking; and

(b) acting for that purpose specifically in accordance with the provisions of this Code, read with the Act, the General Code (where applicable), and any other applicable law;

bulking” means the aggregation by an administrative FSP of –

(a) clients’ funds when buying or investing in financial products on behalf of clients, and the subsequent allocation of such financial products to each client separately in the records of the FSP;

INSMAT final materials31/10/03

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