BANKSETA Sponsored Project

M O D U L E 3 FAIS L E S S O N LEARNING GUIDE 7 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 Inter-Bank Compliance Training Project Sponsored by BANKSETA

Record- Keeping

Topics:

1 Definition of record-keeping 2 Types of records 3 Record-keeping responsibilities

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 INTRODUCTION

Link Another important daily activity of Financial Providers is record- keeping. It does not matter which Code of Conduct you need to comply with.

Whether you are in the middle of a contract with a client or just advertising your service, you still need to keep records of all communications between you and the other individual.

Relevance to you In all of the Codes, record-keeping plays a very important part. The regulations for each code state that various types of records need to be kept, and the Codes diagram below suggests the role that record keeping plays in adhering to FAIS.

Why do you think record keeping is drawn the way it is? Is it vital that record keeping encompasses all the actions of a FSP and their Representatives?

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Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 INTRODUCTION – cont.

Learning  Define record-keeping as it relates to FSPs and outco Representatives mes  List record types kept by FSPs and Representatives  Trace the record-keeping responsibilities within your organisation.

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 L/O #1 DEFINITION OF RECORD KEEPING

L/O #1 Define record keeping as it relates to FSPs and Representatives.

What is record- A record is a register, file, electronic recording or a written keepin comment of information about a transaction or event. g? Records need to be kept in a secure environment, which may not be on your premises, but would be easily accessible to a client or the Registrar on request.

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 L/O #2 TYPES OF RECORDS

L/O #2 List record types kept by FSPs and Representatives.

FSPs A FSP must (unless the Registrar exempts him in any way) maintain records for a minimum period of five years regarding:  Records of advice given to clients as appropriate  Premature cancellations of transactions or financial products by the client of the provider  Complaints received, as well as an indication as to whether or not the complaint has been resolved  The continued compliance with the authorisation requirements of FAIS by FSPs and Representatives  Cases of non-compliance and the related reasons  Accounting records, maintained on a continual basis and updated monthly  Financial statements showing the financial position of the business on the last day of the financial year  The results of operations and cash flow information for that period.

Register of The FSP must also maintain a Register of Representatives and Repres Key Individuals. The register must be regularly updated and made entativ available for reference or inspection purposes. es

The register contains information such as the Representatives’ names and categories of financial services that they are qualified to offer.

General code: The regulations in the General Code stipulate that you must have Record procedures and systems in place to record all verbal and written - communication relating to any financial service rendered to a client. keepin g

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 L/O #2 TYPES OF RECORDS – cont.

General Code: FSPs need to keep a record of advice. This must record the record Record of all advice rendered to your clients, and must reflect in particular: of  The advice given to clients advice  A brief summary of the information and material on which the advice was based  Which financial products were considered  Which financial products were recommended  An explanation of how the product is likely to satisfy the clients’ needs.

Advertising If you… then you must… Advertise by telephone… Keep an electronic, voice- logged record of all communications.

The records must be kept until it becomes clear that no financial service will be rendered to that particular person except where this instruction is overruled. The General Code for instance states that records need only to be kept for 45 days.

Direct marketing The General Code stipulates that direct marketers need to record all telephone conversations with clients. This record must be provided to the client or the Registrar on request.

Administrative The Administrative Code requires any Administrative FSP to FSPs maintain records of the financial products owned by each client. This record must show the link between the client and each of their financial products.

If the client is a pension fund, you must keep a record of the above information along with the link between the members, the policyholders or participants and the financial products that they selected.

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 L/O #3 RECORD KEEPING RESPONSIBILITIES

L/O #3 Trace the record-keeping responsibilities within your organisation.

Record-keeping: The Records: Timeli  Of all verbal and written communication nes  Relating to any financial service rendered to a client or product accepted by the client  Of the register of advice  Of any kind that need to be kept by any FSP must be kept for a period of five years after the termination of that service or product.

The Registrar may ask to review the records. In this case they need to be made available to the Registrar within 7 days of his request.

If … then…  No financial service is  The voice-logged records offered through telephonic only need to be kept for 45 communications… days.  The client or registrar  Make them available within requests to view these 7 days of the request but records… within the 45 days of record keeping.

 A client is provided with  The client must be provided verbal communication about with a written copy of that a provider or product, and a information within 30 days. service is offered…

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 L/O #3 RECORD KEEPING RESPONSIBILITIES - cont.

Record-keeping: All FSPs and Representatives must ensure that the records are Who kept. The FSP does not need to keep these records but must and ensure that they are kept in a location where they are readily where available for inspection within 7 days of the Registrar’s request.

Any communication will need to be reduced to written or printed format. Any telephonic or radio service communication may be recorded and kept in an appropriate electronic or voice-logged format which can, if required by the Registrar, be easily reduced to written or printed form.

Record-keeping: The regulations in the General Code stipulate that you must have Proced procedures and systems in place to: ures  Record all verbal and written communication relating to a financial service rendered to a client  Store and retrieve these records and any other material documentation relating to the client  Keep these records safe from destruction.

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 LESSON CONSOLIDATION

Consolidation Make a list of the key points you would like to remember when exercis keeping records of advice given to customers. e Check your thinking against learning outcomes 2 and 3.

Learner guide Developed by Gray Training 011 472 3516 Jan 2004 B A N K S E T A S p o n s o r e d P r o j e c t Record keeping Module 3: Lessons 7 ASSESSMENT

Answer these short questions to test your knowledge and Test your understanding of this material. Choose the right answer. knowledge & understanding

Statement True/False? 3.7.1 A record is a register, file, electronic recording or a written comment of information about a transaction or event. 3.7.2 Records must be kept on your own premises. 3.7.3 The register of representatives contains information such as the Representatives’ names and categories of financial services that they are qualified to offer. 3.7.4 The Administrative Code requires any Administrative FSP to maintain records of the financial products owned by each client. This record must show the link between the client and each of their financial products.

Question 3.7.5 FSPs need to keep records of advice. The following does NOT need to be kept: a The advice given to clients b Brochures handed to the client c The clients salary statements d A brief summary of the information and material on which the advice was based e Which financial products were considered.

3.7.5.1 All of the choices are true 3.7.5.2 None of the choices are true 3.7.5.3 Choices (a), (c) and (d) are true 3.7.5.4 Choices (a), (d) and (e) are true 3.7.5.5 Choices (b) and (c) are true.

Learner guide Developed by Gray Training 011 472 3516 Jan 2004