Board Notice 194 of 2017 — Fit & Proper explained
Board Notice 194 of 2017 (BN194) is the FSCA determination that sets out what "fit-and-proper" means for FSPs, Key Individuals, Compliance Officers and Representatives. This is a plain-English guide to what BN194 requires and how it’s tested in practice.
What is Board Notice 194 of 2017?
Board Notice 194 of 2017 — the "Determination of Fit and Proper Requirements for Financial Services Providers" — is the FSCA Board Notice that specifies, under the FAIS Act, what qualifications, experience, honesty and integrity, competence, operational ability and financial soundness a person or entity must have to be authorised as an FSP, appointed as a Key Individual, approved as a Compliance Officer, or registered as a Representative.
What are the fit-and-proper requirements?
BN194 covers six dimensions: (1) honesty, integrity and good standing; (2) competence — qualifications, regulatory exams and product-specific training; (3) experience appropriate to the licence category and role; (4) operational ability — the systems, controls and business framework to actually render the service; (5) financial soundness — solvency, liquidity and (for FSPs) minimum capital; and (6) continuous professional development (CPD).
What qualifications does BN194 require?
BN194 requires each KI, CO and Rep to hold at least a minimum qualification recognised by the FSCA for the specific licence category and product sub-categories. The FSCA publishes and maintains the list of recognised qualifications. Higher-risk categories (Cat II, IIA, III) demand higher qualifications and more experience. RE1 (Level 1 Regulatory Exam) is required for KIs; RE5 (Level 5) is required for Representatives who advise or intermediate.
What experience does BN194 require?
Minimum experience is category-specific and role-specific. A Category I KI advising on long-term insurance sub-category A typically needs one year of relevant experience under supervision; a Category II Discretionary FSP KI needs substantially more (often 3–5 years) reflecting the discretionary mandate. Experience is measured from the Date of First Appointment (DOFA) as a Representative, and is per sub-category, not global.
What is the honesty and integrity test?
The honesty, integrity and good standing test screens for disqualifying events: past debarment, criminal convictions involving dishonesty, insolvency, professional-body sanctions, and misconduct or dismissals in a financial services role. This is why RegDesk’s Due Diligence pulls FSCA register, CIPC, IRBA and AML/PEP/sanctions data on every KI/CO/rep as part of a fit-and-proper check — the disqualifying facts are spread across multiple public registers.
What is operational ability under BN194?
Operational ability is the FSP’s ability to actually render the service it is licensed for: appropriate premises, systems and personnel; a governance and compliance framework; PI insurance; and business continuity. For FSCA inspections this is where the compliance manual, RMCP, TCF policy, complaints framework and BCP are read together as evidence of operational ability, not as separate box-ticks.
What is financial soundness?
Financial soundness is the FSP’s ability to meet its financial obligations as they fall due. BN194 sets minimum capital and liquidity requirements per FSP category, and requires annual financial statements within four months of financial year-end. Discretionary and Administrative FSPs face higher capital thresholds reflecting the client-asset risk they hold.