CODES OF CONDUCT

Presented by the Inspired Learning Regulatory Academy

Custody, client funds and premium

Disclosure requirements

Managing transparency and conflict of interest

Ethical conduct in Financial Services

Complaints handling

Risk management, insurance , advertising and direct marketing

Termination

CODE OF CONDUCT

CUSTODY OF CLIENTS FUNDS

Separate Bank

AccountSteps taken to safeguard funds and that funds dealt with ito mandateDistinguished from FSP funds

Steps taken to safeguard funds and that funds

dealt with ito mandateDistinguished from FSP

funds

Receive funds separate from others

FSP pays bank chargesFSP pays accumulated

interest

Issue written confirmation, and include document

description for identification purposes

Issue written confirmation and paid

into Bank account with in 1 day of receipt

Client access to funds

Receipt of Funds

Safeguarding of

funds

Receipt of title

documents

Source: FAIS Act Section 10

OUTCOME 24

DISCLOSURESource: Section 2 General Code of Conduct

A provider must at

all times render

financial services

honestly, fairly,

with due skill, care

and diligence, and

in the interests of

clients and the

integrity of the

financial services

industry.

OUTCOME 25

25. DISCLOSURESource: Section 7(1)(a) & (b)

A reasonable and

appropriate general

explanation of

terms

Full and frank

disclosure

To enable client to

make an informed

decision

OUTCOME 25

DISCLOSURESource: Section 7(1)(a) & (b)

Provide client with

material contractual

information and

material

illustrations.

Ensure client

understands the

advice and is able to

make an informed

decision

OUTCOME 25

DISCLOSURES ON FSP’SSource: Section 4 (1) Code of Conduct

KI must ensure systems and procedures in place to meet

disclosure requirements on FSP’s

Financial service details and conditions

/restrictions and professional indemnity

Is Rep acting under supervision

Specific exemption applicable to FSP

Full business name, registration no, postal and physical address, contact numbers, email address

Legal relationship between product supplier,

representative and responsibility for Reps

actions

Name and contact details of Compliance and

Complaints Dept

OUTCOME 26

COMMISSION DISCLOSURE

All amounts , sums, values charges, fees, remuneration

Monetary obligations mentioned, or referred to and payable to product

supplier or provider

Must be reflected in specific monetary terms, …. the basis of the calculation

must be adequately described

OUTCOME 27

COMMISSION DISCLOSURE

A provider other than a direct marker

Disclose nature, extent and

frequency of

Any incentive, remuneration, consideration,

Fee or brokerage payable to provider directly or indirectly

By any product supplier

Or any person other than

client

For which provider may become

eligible

As well as identity of

product supplier

Or person offering valuable

consideration

Source: Section 3 (1) and 7 (1) of Code of Conduct

OUTCOME 27

DISCLOSURE - PRODUCTSource: Section 7 (1) (c) of Code of Conduct

Provider must as early as possible name ,class, type of financial product

Any rebate arrangements

Any platform fee arrangements

Underlying products must disclose net investment amount

Realisable funds and material tax considerations

Terms conditions exclusions and warranties and waiting periods

Any guaranteed minimum periods

Restrictions , penalties and cooling off rights

Increase in premium

OUTCOME 27

DISCLOSURES ON PRODUCT SUPPLIERSSource: Section 4 (1) Code of Conduct

KI must ensure systems and procedures in place to meet disclosure requirements on

product suppliers

FSP holds more than 10% shares in provider and has received more than 30%

commission in 12 months

Product supplier FSP who has contract with other

FSP must provide required information about itself

FSP to give client information on product

supplier asap or within 30 days after oral info

Name, physical location, postal and telephone

contact details.

Contractual relationship between FSP and product

supplier

Name and contact details of Compliance and

Complaints Dept

OUTCOME 28

Means any situation in which a provider or a representative has an actual or potential interest that may, in rendering a financial service to a client, -◦ (a) influence the objective performance of his, her or its obligations to that client;

or◦ (b) prevent a provider or representative from rendering an unbiased and fair

financial service to that client, or from acting in the interests of that client,

including, but not limited to -◦ (i) a financial interest;◦ (ii) an ownership interest;◦ (iii) any relationship with a third party;

Definition of “conflict of interest” inserted by BN 58/2010 w.e.f. 19 April 2010

MANAGING CONFLICTS OF INTERESTSource: Definition: Code of Conduct

OUTCOME 28

MANAGING CONFLICTS OF INTERESTSSource: Definition: Code of Conduct and Section 3

Actual or potential interest that may influence service to client and prevent

rendering of financial services in an unbiased and fair manner

Disclose existence of personal interest or actual or potential conflict and take

steps to treat client fairly

Non-cash incentives and other indirect consideration could be viewed as a

potential conflict of interests

OUTCOME 29

ETHICAL CONDUCT

Disclosure

Transparency

Honesty Integrity

Internal rules

Record keeping

Misrepresentation

FraudForgery Dishonesty Misuse of client funds

OUTCOME 31

REPS ROLE I.T.O. ETHICAL CONDUCT

• Confidentiality

Trust

End of chapter 4 slides

OUTCOME 32

INSURANCESource: Section 13 of Code of Conduct

A provider,

excluding a

representative,

must, if, and to the

extent, required by

the registrar

maintain in force

suitable guarantees

or professional

indemnity or fidelity

insurance cover.

OUTCOME 35

Advertising principles

Performancedata

Illustrations and

forecasts

No guarantees

and for illustration

only

Warning about risks

in buying/sellin

g

Information about past

performance

Telephonic advertising

must be recorded

Records produced on request in 7

days

ADVERTISEMENTSSource: Section14 General Code of Conduct

Advertisement

May not contain statement, promise or

forecast which is fraudulent, untrue or

misleading

OUTCOME 35

TERMINATION

Give effect to client request

Take steps to ensure client undertsands

implications

Notify clients immediately

Take steps to complete or transfer business

promptly

Reps stops operating

Provider terminates

Client terminates

Notify clients immediately

Take steps to complete or transfer business

promptly

Source: Section 20 Code of Conduct

OUTCOME 35