The FAIS Act explained
The Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act) is the statute that governs Financial Services Providers in South Africa. This is a question-led primer for FSPs, Key Individuals, Compliance Officers and business owners.
What is the FAIS Act?
The Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act) is the South African statute that regulates the rendering of financial services. Its purpose is to protect clients by requiring that persons and entities that give financial advice or provide intermediary services in respect of financial products are authorised by the FSCA and meet minimum standards of fit-and-proper conduct.
Who does the FAIS Act apply to?
The FAIS Act applies to any person or entity that renders financial advice or intermediary services in respect of a listed financial product. In practice this covers financial advisers, insurance brokers, investment managers, LISPs, hedge fund managers, funeral policy administrators and — since the FSCA CASP Declaration — Crypto Asset Service Providers. Both the FSP entity and the natural persons acting as Key Individuals or Representatives are regulated.
What are the main FAIS Act obligations?
A licensed FSP must operate under a valid FSCA licence for the exact category and sub-categories authorised, appoint qualified Key Individuals and Representatives, comply with the FAIS General Code of Conduct (including Section 45 conflict-of-interest management), maintain a Risk Management and Compliance Programme (RMCP) under the FIC Act, submit an Annual Compliance Report to the FSCA by 15 September each year, and keep records for at least five years. Section 17 requires the Compliance Officer to report material irregularities to the FSCA.
What is the FAIS General Code of Conduct?
The General Code of Conduct for Authorised Financial Services Providers and Representatives (published under the FAIS Act) sets out how FSPs must treat clients: honest and fair dealing, disclosure of material information and fees, suitable advice, avoidance and management of conflicts of interest (Section 45), a written complaints procedure, and record-keeping. The Code is the operational backbone of FAIS compliance and is inspected against directly.
What happens if an FSP breaches the FAIS Act?
The FSCA can take administrative action ranging from a directive to remedy, an administrative penalty, suspension or withdrawal of the FSP licence, and debarment of individuals (Section 14 / 14A). Serious breaches — misappropriation, unauthorised business, dishonesty — can be referred for criminal prosecution. Clients also have recourse to the FAIS Ombud for complaints of loss suffered as a result of an FSP’s conduct.
How does the FAIS Act interact with FICA and POPIA?
The FAIS Act sits alongside the Financial Intelligence Centre Act 38 of 2001 (FICA) and the Protection of Personal Information Act 4 of 2013 (POPIA). FICA requires the same FSPs (as accountable institutions) to maintain a Risk Management and Compliance Programme, do client due diligence and report cash-threshold and suspicious transactions to the FIC. POPIA sets the rules for how the client personal information collected under FAIS/FICA is processed, protected and — where a breach occurs — reported to the Information Regulator within 72 hours.
Where can I find the FAIS Act?
The official text of the FAIS Act and its Board Notices is published on the South African government portal (gov.za) and on the FSCA website (fsca.co.za). Board Notice 194 of 2017 (Fit & Proper), the General Code of Conduct, and category-specific determinations are the most frequently referenced companions to the Act itself. RegDesk maps its obligations register to the specific sections of the Act, Board Notices and PCCs that trigger each task.