Regulatory Examinations For Financial Advisors

There are two types of Regulatory Exams that financial advisors have to write:

Level 1: These regulatory examinations must be completed within 2 years of appointment or approval. People currently in the industry appointed or approved between 2004 and 2009 must complete these regulatory examinations successfully.

Level 2: These regulatory examinations are product specific regulatory examinations, and will focus on testing the applied knowledge of individuals in relation to the specific products for which they provide financial services.

All Sole Proprietors or Key Individuals who are responsible for managing and overseeing the business relating to the rendering of financial services in relation to category I, II, IIA, III and IV are required to complete the first regulatory exam based on prescribed qualifying criteria set out in Board Notice 105, Section 1.

The RE 1 exam for key Individuals is a two and a half hour exam consisting of 80 questions. The RE 1 exam for representatives is a two hour examination and will consist of 60 multiple choice questions.

This regulatory examination will test the Key Individual financial advisor's knowledge of the following areas of the FAIS Act, the FICA Act and subordinate legislation of the FAIS Act:

• Understanding of their role and responsibilities as a Key Individual as required by the FAIS Act,
• The roles and responsibilities of representatives
• Management and overseeing the appointment of representatives
• Managing the rendering of services under supervision
• Management and overseeing the on-going development or employment of representatives
• Debarring of representatives found to have acted fraudulently or committed an act that gives rise to debarment
• Awareness of the regulatory environment within which the FSP functions
• Awareness of the specific obligations in terms of the Code of Conduct and it's subordinate legislation
• Management and overseeing of compliance functions of the FSP
• Maintain the license of the FSP and its licensing conditions
• How to take action if the FSP voluntarily lapses its license
• Ensure proper record keeping activities are carried out
• Management and overseeing of the FSP infrastructure
• Management and overseeing accounting and auditing requirements
• Management and overseeing adherence to FICA

As can be seen from the above there will be a focus on the key Individuals ability to not only manage the financial advisory business but also oversee all activities that occur within that business.

Representatives on the other hand will be required to know and apply the following with regards to the FAIS and FICA Acts:

• Understand the roles , responsibilities and requirements regarding representatives in terms of FAIS
• Explain all requirements needed to maintain an FSP license
• Explain their obligations when receiving client funds or premiums
• Explain the requirements with regards to disclosures
• Explain and apply conflict of interest
• Explain ethical conduct in financial services
• Explain steps that must be taken when giving advice
• Apply knowledge of financial products
• Explain consequences of conduct that could lead to debarment
• Align execution of their duties with compliance requirements
• Explain what is meant by proper record keeping
• Have an understanding of FICA and other money laundering legislation applicable to FAIS

Due to the poor pass rates the exam deadline has been postponed from 31 Dec 2010 to 30 June 2012.

We are however please to inform you that both Shane and Ken have passed their Key Individual exams.