RE5 study guide
RE5 · Work through your exam, one topic at a time.
The RE5 is the regulatory examination that South Africa's financial services industry uses to test whether a person is competent to act as a representative of a licensed financial services provider (FSP) under the FAIS Act. It is aimed at anyone who will render advice or intermediary services to clients on an FSP's behalf - across categories such as long-term and short-term insurance, health service benefits, retirement and pension products, collective investments, securities and deposits. The RE5 study guide has 8 sections and about 2,620 words.
01The FAIS Act: purpose, structure, key definitions and the regulatory environment
The FAIS Act 37 of 2002 regulates the rendering of financial services. Its core purposes are to protect clients, promote fair treatment, ensure that providers and representatives are fit and proper, and support confidence in the financial sector.
347 words, about 2 min02Licensing of financial services providers and the authorisation of representatives
An FSP must hold a FAIS licence issued by the FSCA before rendering financial services. The licence is category-specific: it identifies the financial products and services the FSP may render.
338 words, about 2 min03Fit and proper requirements: honesty and integrity, competence, operational ability and financial soundness
Fit and proper is the gateway to licensing and authorisation. For an FSP, the four pillars are honesty and integrity , competence , operational ability and financial soundness .
315 words, about 2 min04Codes of conduct and conduct standards applicable to providers and representatives
Codes of Conduct issued under FAIS are binding subordinate legislation, not optional best practice. The General Code of Conduct for Financial Services Providers and Representatives sets standards for fair treatment, disclosure, suitability, conflicts of interest, record keeping, complaints and staff training.
308 words, about 2 min05Representative duties: disclosures, advice and intermediary services, record keeping and client profiling
A representative must disclose at the earliest reasonable opportunity that they act for an FSP, identify the FSP and its licence status, explain their authority, and disclose product supplier, remuneration, conflicts and material terms. When giving advice, the representative must gather sufficient client information: financial situation, needs, objectives, risk tolerance and relevant personal circumstances.
337 words, about 2 min06Compliance, monitoring, supervision and control functions within an FSP
An FSP must maintain a compliance function appropriate to its business. This includes a compliance officer or compliance function, depending on the licence and requirements, and systems to monitor compliance with FAIS, the Codes, licence conditions and internal policies.
303 words, about 2 min07Complaints handling and the role and procedures of the FAIS Ombud
An FSP must have an internal complaints process. A complaint should be acknowledged, investigated and responded to within the required timeframes.
333 words, about 2 min08Enforcement: regulatory action, penalties, debarment, appeal and review
The FSCA may inspect, investigate, issue directives, impose conditions, suspend or withdraw a licence, and impose administrative penalties for non-compliance. Enforcement aims to protect clients and the integrity of the market, not merely to punish.
339 words, about 2 min