Licensing of financial services providers and the authorisation of representatives
Who is licensed and who is authorised
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. A representative is not separately licensed under FAIS. Instead, the representative must be appointed by a licensed FSP, meet the fit and proper requirements, and be authorised to act in the relevant product or service category. The FSP remains accountable for the representative’s conduct.
Application and conditions
A licence application must show the applicant meets the fit and proper requirements, has operational ability, has adequate financial soundness, and can comply with the Act and Codes. The FSCA may impose conditions, and the FSP must notify changes and submit required returns. Representatives who do not yet meet full competence requirements may act only under supervision, subject to the applicable requirements.
Traps
Questions often test the difference between a licence and an authorisation. “The representative’s licence” is usually the wrong answer. Another trap is assuming that once an FSP is licensed it may render every financial product; the licence is limited to the categories applied for and granted. A third trap is treating representative appointment as a purely administrative HR step. Appointment must be preceded by fit and proper checks and proper authorisation.
Worked rule
A newly appointed representative has relevant experience but has not yet completed the required regulatory examination. The FSP may appoint the person only if the fit and proper and supervision requirements are met; the person may not independently render the regulated service until competent. Rule of thumb: licence belongs to the FSP; authorisation belongs to the representative’s appointment and category.