General Code of Conduct for Authorised Financial Services Providers and Representatives, 2003

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20 No. 25299 GOVERNMENT GAZEITE, 8 AUGUST 2003

NOTICE 80 OF 2003

FINANCIAL SERVICES BOARD

FINANCIAL ADVISORY AND INTERMEDIARYSERVICES ACT, 2002 (ACT NO. 37 OF 2002)

GENERAL CODEOF CONDUCT FOR AUTHORISED FINANCIAL SERVICES PROVIDERS AND REPRESENTATIVES

I , Jeffrey van Rooyen, Registrarof Financial Services Providers, herebyunder section 15 of the Financial Advisory and Intermediary Services Act,2002 (Act No. 37 of 2002), publish a general code of conductfor authorised financial services providers, and their representatives, ascontained in the Schedule hereto, which I have draftedafter consultation with the Advisory Committee on Financial Services Providers.

This notice is called the Notice on the General Cods of Conduct for Authorised Financial Services Providers andRepresentatives, 2003, and comes into operation on the date determined by the Minister of Finance in terms of section 7(1) of the said Act.

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SCHEDULE GENERAL CODE OF CONDUCT FOR AUTHORISED FINANCIAL SERVICES PROVIDERS AND THEIR REPRESENTATIVES

Section 15 of Financial Advisory and Intermediary Services Act, 2002 (Act No. 37. of 2002)

ARRANGEMENT OF SECTIONS

PART I

INTRODUCTORY PROVISIONS

Definitions, construction and application

I. (1) In thisCode “the Act”means the FinancialAdvisoryand Intermediary ServicesAct, 2002 (Act No. 37 of 2002), a word or expression to which a meaning hasbeen assigned in the Act shall have that meaning, and,unless the context indicates otherwise-

“advertisement”, in relation to a provider, means any written, printed, electronic or oral communication(including a communication by meansof a public radio service), which is directed to the general public,or any section thereof,or to any client on request, by any such person, which is intended merely to call attention to the marketing or promotion of financial services offered by such person, and which does not purport to provide detailed information regarding any suchfinancial services; and “advertising” or “advertises” has a corresponding meaning;

“Direct marketing”, meansthe rendering of financial services byway of telephone, internet, media insert, direct mail,or electronic mail,

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excluding any such means which are advertisements not containing transaction requirements.

“Direct marketer” means a provider who, inthe normal course of business, providesall or the predominant partof the financial services concerned inthe form of direct marketing.

“provider” means an authorisedfinancial services provider, and includes a representative;

“transaction requirement” means any application, proposal, order, instruction or other contractual information requiredto be completed for, or submitted to, a product supplier byor on behalf of a client relating to the purchase of or investment in any financial product, including any amendmentthereof or variation thereto;

“writing” includes communication by telefaxor any appropriate electronic medium that is accurately and readilyreducible to written or printed form; and “written” hasa corresponding meaning.

(21 iai This Code musi be construed-

(0 in conjunctionwith the provisionsof the Actandin manner conduciveto thepromotion and achievement of the objectives of codes of conduct asstated in section 16 of the Act; and

(ii) asbeing in addition to any other law not inconsistent with its provisions and not asreplacing any such law.

In the case of any inconsistencyor conflict between-

(i) a provision of this Code and a provision of any other specific Codedrafted under section15.of the Act, the last mentioned provision shall prevail; and

(ii) a provision of this Code and a provision of any other law specifically regulating market conduct in the rendering of financial servicesin respect of one or more specificfinancial products, the last mentioned provision, unless inconsistentor in conflict with the Act, shall prevail.

(3) The provisions of this Code apply, unless stated otherwise in this Code or otherwise by law, toall financial services providers and representatives.

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PART II

GENERAL PROVISIONS General duty of provider

2. A provider must at all times render financial services honestly, fairly, with due skill, care and diligence, andin the interests of clients and the integrity of the financial services industry.

Specific duties of provider

3. (1) When a providerrenders a financial service-

(a) representations made and information provided to a client by the provider-

must be factually correct;

must be provided in plain language, avoid uncertainty or confusion and notbe misleading;

must be adequate and appropriate in the circumstances of theparticular financial service, taking into account the factually established or reasonably assumedlevel of knowledge of the client;

must be provided timeouslyso as to afford the client reasonably sufficient time to make an informed decision aboutthe proposed transaction;

may, subjectto the provisions of this Code, be provided orally and,at the client’s request, confirmed in writing withina reasonable timeafter such request;

must, where providedin writing or by meansof standard formsor format, be in a clear and readable print size, spacing and format;

must, as regards all amounts, sums, values, charges, fees, remuneration or monetary obligations mentioned or referred totherein and payableto the product supplier or the provider, bereflected in specific monetary terms: Providedthat where any such amount, sum, value, charge, fee, remuneration or

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monetary obligationis not reasonably pre- determinable, its basis of calculation must be adequately described; and

(viii) need not be duplicated or repeated to the same client unless materialor significant changesaffecting that client occur, orthe relevant financial service rendersit necessary, in which case a disclosure of the changes to the client must be made without delay;

the provider must disclose to the client the existence of any personal interest in the relevant service, or of any circumstance which gives rise to an actual or potential conflict of interest in relationto such service, andtake all reasonable stepsto ensure fair treatment of the client:

non-cash incentives offered and/or other indirect consideration payable by another provider, a product supplier or any other person to the provider could be viewed as a potential conflict of interest

the service must be rendered in accordance with the contractual relationship and reasonable requests or instructions ofthe client, which mustbe executed as soonas reasonably possible and with due regard to the interests of the client which must be accordedappropriate priority over any interests of the provider;

transactions of a client must be accurately accounted for; and

the provider involved must not deal in any financial product for own benefit, account or interest where the dealing is based upon advance knowledge ofpending transactions for or with clients, or on any non-publicinformation the disclosure of which wouldbe expected to affect the prices of such product.

A provider must have appropriate procedures and systems in place to-

(i) recordsuchverbalandwrittencommunications relating to a financial servicerendered to a client as are contemplated inthe Act, this Code or any other Code drafted in termsof section 15 of the Act;

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(ii)storeandretrievesuch records and any other material documentationrelating to the client or financial service rendered tothe client; and

(iii)keepsuch client records and documentation safe from destruction.

(b) All such records must be kept for a'period of five years after termination, tothe knowledge of the provider, of the product concerned or, in any other case, after the rendering of the financial service concerned.

(c) Providersarenotrequiredto keep the records themselves but must ensurethat they are availablefor inspection within seven days ofthe registrar's request.

(d) Recordsmay be kept in an appropriate electronic or recorded format, which are accessible and readily reducible to written or printed form.

(3) A provider maynot disclose any confidential information acquired or 4(1), a product supplier in obtained from a client or, subject to section regard to such client or supplier, unless the written consent of the client or product supplier, as thecase may be, has been obtained beforehand or disclosure ofthe information is requiredin the public interest or under any law.

PART 111

INFORMATION ON PRODUCT SUPPLIERS

4. (1) A provider other than a direct marketermust at the earliest reasonable opportunity,and only where appropriate,furnish the client with full particulars of the following information about the relevant product supplier and, where such information is provided orally, must confirm suchinformation'within30 days in writing:

(a) Name,physicallocation,and postal and telephone contact details of the product supplier;

(b) (i) the contractualrelationship with the product supplier (if any), and whetherthe provider has contractual relationships with other product suppliers;

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(ii) namesandcontact details of the relevant compliance and complaints departmentsof the product supplier.

the existence of any conditionsor restrictions imposed by the product supplierwith regard to thetypes of financial products or services that may be provided or rendered by the provider; and

where applicable, the facthat the provider -

(i) directly or indirectly holds more than 10% of the relevant product supplier's shares, or has any equivalent substantialfinancial interest in the product supplier; (ii) during the preceding 12 month period receivedmore than 30% of total remuneration, including commission, from the product supplier,

and the provider must convey any changes thereafter in regard to such information at the earliest opportunity to the client.

A product supplier which isan authorised financial services provider, and which has enteredinto an intermediary contract or similar contractual relationship withanother provider (not beinga representative) for the purpose ofrendering a financial service in respect of its financial products, mustwithin a reasonable timeafter being requestedto do so by such other provider, provide suchother provider with sufficient particulars to enablethe provider to comply with the disclosure requirements ofthis Code relating to the furnishing of details of the product supplierand the product in question.

A provider must, wherethe relevant licence, terms of employment or mandate enables such provider to provide clients with financial services in respect ofa choice of product suppliers, exercise judgment objectively inthe interest ofthe client concerned.

A provider may not, in dealing witha client, compare different financial products, product suppliers, providersor representatives, unless thediffering characteristics ofeach are made clear, and may not make inaccurate, unfair or unsubstantiated criticisms of any financial product, product supplier, provideror representative.

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PART IV

INFORMATION ON PROVIDERS

5. Where a provider other than a direct marketer renders a financial service to a client, the provider must at the earliest reasonable opportunity furnish the client with full particularsof the following information and, wKere such inforrna’tion is provided orally, must confirm such information within30 days in writing:

(a) Full business and trade names, registration number (if any), postal and physical addresses, telephone and, where applicable, cellular phone number, and internet and e-mail addresses, in respect of the relevant business carried on, as well asthe names and contact details of appropriate contact persons or offices;

(6) concise details of the legal and contractual status of the provider, including details as regardsthe relevant product supplier (or,in the case of a representative, as regards the relevant provider and product supplier), to be providedin a manner which can reasonably be expected to make it clear to the client which entity accepts responsibility for the actionsof the provider or representative inthe rendering ofthe financial service involved and the extent to which the client will have to accept such responsibility;

(c) names and contact details of the relevant compliance department or, in the case of a representative, such detail concerning the provider to which the representative is contracted;

(dl details of the financial services which the provider is authorised to provide in terms of the relevant licence and of any conditions or restrictions applicable thereto;

(e) whether the provider holds guaranteesor professional indemnityor fidelity insurance cover or not.

(0 whether a representative of a provider is rendering services under supervision as definedin the Determination of Fit and Proper Requirements; and

(g) the existence of a specific exemption that the Registrar may have granted to the provider with regard to any matter covered by the Act.

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PART V

CONTACTING OF CLIENT

6. A provider must-

in making contact arrangements,and in all communications and dealings with a client, act honourably, professionally and with due regard tothe convenience of the client; and

at the commencement of any contact,visit or call initiated by the provider, explain the purpose thereof and at the earliest opportunity, provide the information referredto in section 5.

PART VI

INFORMATION ABOUT FINANCIALSERVICE

Subject to the provisions of this Code, a provider other than a direct marketer, must-

provide a reasonable and appropriategeneral explanation of the nature and material terms of the relevant contract or transaction to a client, and generallymake full and frank disclosure of any informationthat would reasonably be expected to enable the client to make an informed decision;

whenever reasonable and appropriate,provide to theclient any material contractual informationand any material illustrations, projections or forecastsin the possession of the provider;

in particular, atthe earliest reasonable opportunity, provide, where applicable,full and appropriateinformation of the following:

(i) Name, class or type of financial product concerned;

(ii) nature and extent of benefits to be provided, including details of the manner in which such benefits are derived or calculated and the manner in which they will accrue or be paid;

(iii) where the financial product is marketed or positioned as an investment or as havingan investment component-

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(aa) concise details of the manner in which the value of the investment is determined, including concise details of any underlying assets or other financial instruments;

(bb) separate disclosure of any charges and fees to be levied against the product, including the amount and frequency thereof and, where the specific structure of the product entails other underlying financial products, in such a manner as to enable the client to determine the net investment amount ultimately invested for the benefit of the client; and

(cc) on request,informationconcerningthepast investment performance of the product over periods and at intervals which are reasonable with regard tothe type of product involved including a warningthat past performances are not necessarily indicativeof future performances;

the nature and extentof monetary obligations assumed by the client, directly or indirectly,in favour of the product supplier, including the manner of payment or discharge thereof,the frequency thereof, the consequences of non-compliance and, subjectto subparagraph (xiv), any anticipated or contractual escalations, increases or additions;

the nature and extentof monetary obligations assumed by the client, directly or indirectly, in favour of the provider, including the manner of payment or discharge thereof, the frequency thereof, and the consequences of non-compliance

the nature, extent and frequency of any incentive, remuneration, consideration, commission,fee or brokerages (“valuable consideration”), which will or may become payable to the provider, directly or indirectly, by any product supplier or any person other than the client,or for which the provider may become eligible, as a result of rendering of the financial service, as well as the identity of the product supplier or other person providing or offering the valuable

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consideration: Providedthat where the maximum amount or rate of such valuable consideration is prescribed by any law, the provider may (subjectto clause 3(l)(a)(vii)) elect to disclose either the actual amount applicableor such prescribed maximum amount or rate.;

(vii) concise details of any special terms or conditions, exclusions of liability, waiting periods, loadings, penalties, excesses,restrictions or circumstances in which benefitswill not be provided;

any guaranteed minimumbenefits or other guarantees;

to what extentthe product is readily realisable or the funds concerned are accessible;

any restrictionson or penalties for early termination of or withdrawal from the product, or other effects, if any, of such termination or witharawai;

(xi) material tax considerations;

(xii) whether coolingoff rights are offered and, if so, procedures for the exercise of such rights;

(xiii) any materialinvestment or other risks associatedwith the product; and

(xiv) in the case of an insurance product in respect of which provision is madefor increase of premiums, the amount ofthe increased premium for the first five years and thereafter on a five year basis but not exceeding twenty years;

(d) fully inform a client in regard to the completion or submission of any transaction requirement-.

(i) that all material facts must be accuratelyand properly disclosed, and that the accuracy and completeness of all answers, statementsor other information provided by or on behalf of the client, are the client's own responsibility; (ii) that if the provider completes or submits any transaction requirement on behalf ofthe client, the

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client should be satisfiedas to the accuracy and completeness of the details;

(iii) of the possible consequences of the mis- representation or non-disclosureof a material fact or the inclusion of incorrect information; and (iv) that the client must on request be supplied with a copy or written or printed recordof any transaction requirement within a reasonable time.

No provider mayin the course of the renderingof a financial service request any client to sign any written or printed or formdocument unless all details requiredto be inserted thereon bythe client or on behalf of the client have already been inserted.

A provider must, where applicable, at the request of a client, provide the client with a statement of accountin connection with any financial service rendered to the client.

PART VI1

FURNISHING OF ADVICE

Suitability

8. (1) A provider other thana direct marketer, must, priorto providing a client with advice-

take reasonable steps to seek from the client appropriate and available information regarding the client's financial situation, financial product experience and objectives to enable the providerto provide the client with appropriate advice;

conduct an analysis, for purposesof the advice, based on the information obtained;

identify the financial product or products that will be appropriate to the client's risk profile and financial needs, subject to the limitations imposedon theprovider underthe Act or any contractual arrangement; and

where the financial product ("the replacement product") is to replace an existing financial product wholly or partially ("the terminated product") held by the client, fully disclose to the client the actual and potential financial implications, costs

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and consequences of such a replacement, including, where applicable, full details of-

fees and charges in respect of the replacement product;

special terms and conditions, exclusionsof liability, waiting periods, loadings, penalties, excesses, restrictions or circumstancesin which benefits will not be provided, which may be applicable to the replacement product;

in the case of an insurance product, the impact of age and health changes on the premium payable;

differences between the tax implicationsof the replacement product and the terminated product;

of material differences between the investment risk the replacement product and the terminated product;

penalties or unrecovered expenses deductibleor payable dueto termination of the terminated product;

to what extent the replacement product is readily realisable orthe relevant funds accessible, compared to the terminated product; and

vested rights, minimum guaranteed benefits or other guarantees or benefits which will be lost as a result of the replacement.

The provider must take reasonable steps to ensure that the client understands the advice and that the client inisa position to make an informed decision.

A provider providing adviceto a clientto replace an existing long- term insurance contract or policy with any other financial product must at the earliest practicable opportunity after providing such advice, but in any event no later than the dateon which any transaction requirement is submittedto a product supplierin respect of any replacement product, notify the issuer of the existing long-term insurance contract or policyof such advice.

Where a client-

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has not provided all information requested by a provider furnishing advice, as partof the analysis referredto in subsection (l)(b), or where the provider has been unableto conduct such an analysis becausein the light of the circumstances surrounding the case,there was not reasonably sufficient time to do so, the provider mustfully inform the client thereof and ensure that the client clearly understands that-

(i) a full analysis in respect of the client referred to in subsection (l)(b) could not be undertaken;

(ii) there may be limitations on the appropriateness of the advice provided; and

(iii) the client should take particular care to consider on its own whether the advice is appropriate considering the client's objectives, financial situation and particular needs; or

elects to conclude a transaction that differs fromthat recommended by the provider, or otherwise elects not to follow the advice furnished, or electsto receive more limited information or advice than the provideris able to provide, the provider must alert the client as soon as reasonably possible of the clear existenceof any riskto the client, and must advise the client to take particular care to consider whether any product selectedis appropriate to the client's needs, objectives and circumstances.

Record of advice

9. (1) A providermust,subject to and in addition to the dutiesimposed by section 18 of the Act and section3(2)of this Code, maintain a record of the advice furnishedto a client as contemplated insection 8, which record must reflect the basis on which the advice was given, and in particular-

(a) a brief summary of the information and material on which the advice was based;

(b) the financialproductswhichwereconsidered;and

(c) thefinancialproductorproductsrecommendedwithan explanation of why the product or products selected, is or are likely to satisfy the client's identified needs and objectives

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Provided that such recordof advice is only requiredto be maintained where, to the knowledge of the provider, a transaction or contract in respectof a financial productis concluded by or on behalf of the client as a result of the advice furnishedto the client in accordance with section8.

_- (2) A provider, other than a direct marketer, must provide a client with a copy of the record contemplated in 9(1) in writing.

PART Vlll

CUSTODY OF FINANCIAL PRODUCTS AND FUNDS

IO. (I) Subjecttotheprovisions of anyotherapplicableAct, a provider who receives or holds financial products or funds of or on behalf of a client must account for such products or funds properly and promptly and-

when documents oftitle are lodged with the provider on behalf of the client, the provider must immediately provide written confirmation of receipt thereof which contains a description of the documents that is sufficient to identify them;

when a provider receives funds into safe custody without the mediation of a bank, the provider must on receipt of the money, issue a written confirmation of receipt thereof;

where the provider,or a third partyon behalf of either of them, is in control of such financial products or funds, take reasonable stepsto ensure that they are adequately safeguarded;

open and maintain a separate account, designated for client funds, at a bank and-

(i) must within one business day of receipt pay into the account all fundsheldonbehalf of clients; -

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(ii) ensure that the separate account only contains funds of clients and not those of the provider;

(iii) pay all bank charges in respect of the separate account except that bank charges specifically relating to a depositor withdrawal of the funds of the clientare for the client's own account; and

(iv) ensure that any interest accruing to the funds in the separate account is payableto the client or the owner of the funds;

take reasonable stepsto ensure-

(i) that at all times such financial products or funds are dealt with strictlyin accordance with the mandate given to the provider;

(ii) that client financial products or funds are readily discernible from private assets or funds of the provider;>and

(iii) that, subject to any applicable contractual or statutory provisions, a client has ready access to any amount paid into the separate account, less any deductions which are authorised, and charges andfees required or authorised to be paid by law.

(2) Where a transaction or agreement has been recorded in writing, the provider who dealt withthe client, must ensure thathe original agreement is delivered to the client forsafe custody.

(3) Section lO(1)(d) is not applicable to a provider subject to section 45 of the Short-term Insurance Act, 1998(Act No. 53 of 1998), if the provider complies with the requirements contemplatedin that section.

PART IX

RISK MANAGEMENT

Control measures

11. A provider must at all times have and effectively employ the resources, procedures and appropriate technological systems that can reasonably be expected to eliminate as far as reasonably possible,the risk that clients,

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product suppliers and other providers or representatives will suffer financial loss through theft, fraud, other dishonest acts, poor administration, negligence, professional misconductor culpable omissions.

Specific control objectives

12. A provider, excluding a representative, must, without limiting the generality of section 11, structure the internal control procedures concernedso as to provide reasonable assurance that-

(a) the relevant business can be carried on in an orderly and efficient manner;

(b) financial and other information used or provided by the provider will be reliable; and

(c) all applicablelawsarecompliedwith.

Insurance

13. A provider, excluding a representative, must,if, and to the extent, required by the registrar maintainin force suitable guarantees or professional indemnity or fidelity insurance cover.

PART X

ADVERTISING AND DIRECT MARKETING

14. (1) An advertisementbyanyprovidermust-

(a) not contain any statement, promise or forecast which is fraudulent, untrue or misleading;

(6) if it contains-

(i) performancedata(includingawardsandrankings), include references totheir source and date;

(ii)illustrations,forecastsorhypotheticaldata-

(aa) contain support in the form of clearly stated basic assumptions (including butnot limited to any relevant assumptions in respect of performance, returns, costs and charges) with

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a reasonable prospectof being met under current circumstances;

(bb) make it clear that they are not guaranteed and are provided for illusiracive qurposes only; and

(cc) also contain, where returns or benefits are dependent on the performance of underlying assets or other variable market factors, clear indications of such dependence;

(iii) a warning statement about risks involved in buying or selling a financial product, prominently render or display such statement; and

(iv) information about past performances,alsocontaina warning that past performances are not necessarily indicative of future performances; and

(c) if the investment value of a financial product mentioned in the advertisement is not guaranteed, contain a warning that no guarantees are provided. (2) Where a provider advertises a financial service by telephone-

(a) an electronic,voiceloggedrecord of all communications must be maintained. Where no financial serviceis rendered as a result ofthe advertisement, such record need notbe maintained for a period exceeding 45 days;

(b) a copy of all such records must be provided on request by the client orthe registrar within seven daysof the request;

(c) all the information required by sections 4(l)(a) and (c) and 5(a) and (c) shall not be required: Provided thathe client is provided with basic details (such as business name and telephone number or address) of the provider or relevant product supplier, andof their relevant compliance departments: Provided further that, if the promotion results in the renderingof a financial service,the full details required by those sections are provided to the client in writing within 30 days of the relevant interaction with the client.

(3) Where a provider advertises a financial service by means of a public radio service,the advertisement must include the business name of the provider.

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15. (1) A directmarketermust,whenrenderinga financial service to oron behalf of a client, at the earliest reasonable opportunity furnish the client with the following particulars:

the business or trade nameof the direct marketer;

confirmation whether the direct marketeris a licensed financial service provider and details of the financial services which the direct marketer is authorised to provide in terms of the relevant license and any conditionsor restrictions applicable thereto;

telephone contact detailsof direct marketer (unless the contact was initiated by the client);

telephone contact details of the compliance departmentof the direct marketer;

whether the direct marketer holds professional and indemnity insurance;

Provided that where the direct marketer is a representative, the information contemplated in sub-paragraphs (a) to (c) above must be provided in respect of the provider to which the representative is contracted.

(2) When providing a client with advice in respect of a product, a direct marketer must at the earliest reasonable opportunity:

(a) make enquiries to establisti whether the financial product or products concerned will be appropriate,regard being had to the client's risk profile and financial needs, and circumstances;

(b) furnish the client with the following particulars where appropriate:

(i)businessor trade nameof the product supplier;

(ii)legalstatusandrelationshipwithproductsupplier;

(iii) the following details in respect of the product:

(aa) Name, class or type of financial product concerned;

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(bb) Nature and extent of benefits to be provided;

(cc) Manner in which such benefits are derived or calculated, with specific referenceto the underlying assetsof any investment component and the mannerin which the value of such investment component is determined;

(dd) Monetary obligations assumed by the client as well as mannerof payment;

(ee) Whether cooling off rights are offered and, if so, procedures for the exercise of such rights;

(ff) Anymaterialinvestmentorotherrisks associated withthe product;

when advising or being advised by a client thathe financial product concerned is to replace an existing financial product held by the client, inform the client of actual and potential financial implications, costs and consequence setout in clause 8(l)(d) of this Code before any transactionis concluded.

(3) A direct marketer must prior to the conclusion of any transaction and where a contract is concluded provide the client with the following information, provided where such information is provided orally, it must be confirmed in writing within 30 days:

Telephone contact details ofthe compliance department of the prgduct supplier;

To what extent the product is readily realisable or the funds concerned are accessible where appropriate;

Details of manner in which benefits will be paid;

Any restrictions on or penalties for early termination or withdrawal from the product, or other effects, if any, of such termination or withdrawal;

Charges and fees tobe levied against the product including the amount and frequency thereof and where the producthas an investment component, the net investment amount ultimately investedfor the benefitof the client;

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Commission, consideration, fees, charges or brokerages payable to the direct marketerby the client, orby the product supplier or by any other person;

On request, the past investment performance of the product, where applicable, over periods and at intervals which are reasonable with regardto the type of product involved;

Consequences of non-compliance with monetary obligations assumed by the client and any anticipated or contractual escalations, increases or additions;

In the case of an insurance product in respect of which provision is made for increaseof premiums, abbreviated disclosures of such contractual increases;'

Concise details of any special terms and conditions, exclusions, waiting periods, loadings, penalties, excesses, restrictions or circumstancesin which benefits willnot be provided;

Any guaranteed minimum benefits or other guarantees where appropriate.

That recordings of telephone discussions (where applicable) will be made availableto the client on request

(4) A direct marketer must provide a client (where appropriate) with a record of advice as contemplated in section 9(I)(a) to (c) in writing.

(5) A direct marketer shall be obliged to record all telephone conversations with clientsin the course of direct marketing and must have appropriate procedures and systemsin place to store and retrieve such recordings. Records of advice furnishedto a client telephonically need not be reduced to writing but a copy of the relevant voicelogged records must be provided, on request, to the client or Registrar within a reasonable time.

(6) Notwithstanding the above or contrary provision in the code, such of the information required to be provided to the client in terms of clauses 4, 5 and 7 of this Codeas has not yet been recorded or provided to the clientin writing before the conclusion of any transaction, must be provided to the client in writing within 30 days thereafter.

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PART XI

COMPLAINTS General 16. (1) In this Part-

“complaint” means a complaint as definedin section l(1) of the Act (excluding the referenceto section 26(l)(a)(iii) therein), submitted by a client to a provider for purposesof resolution by the provider;

“internal complaint resolution system and procedures”,in relation to a provider and a client, means the system and procedures established and maintained by the providerin accordance with this Code for the resolution of complaintsby clients;

“Ombud” means the Ombud for Financial Services Providers referred to in section 20(2) of the Act;

“resolution”, or “internal resolution”,in relation to a complaint and a provider, means the processof the resolving of a complaint through and in accordance with the internal complaint resolution system and procedures of the provider;

“Rules” means the Ruleson Proceedings of the Officeof the Ombud for Financial Services Providers,2002.

(2) A providermust-

request that any client who has a complaint against the provider must lodge such complaint in writing;

maintain a recordof such complaintsfor a period of five years;

handle complaints from clientsin a timely and fair manner;

take steps to investigate and respond promptlyto such complaints; and

where such a complaint is not resolvedto the client’s satisfaction, advise the client of any further steps which may be available to the client in terms of the Act or anyother law.

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Basic principles of systems and procedures

17. A provider,excludingarepresentativemustmaintainaninternal complaint resolution system and procedures based on the following:

(a) Maintenance of a comprehensive complaints policy outlining the provider's commitment to, and system and procedures for, internal resolution of complaints;

transparency and visibility: ensuringthat clients have full knowledge of the procedures for resolution oftheir complaints;

of easy access to accessibility of facilities: ensuring the existence such proceduresat any office or branch of the provider open to clients, or through ancillary postal, fax, telephone or electronic helpdesk support; and

fairness: ensuring that a resolutionof a complaint can during and by means of the resolution process be effected which is fair to both clients and the provider and its staff.

Resolution of complaints

18. The internal complaint resolution system and procedures of the provider excluding a representative must be designed to ensure the existence and maintenance of at least the following for purposes of effective and fair resolution of complaints:

availability of adequate manpower and other resources;

adequate training of all relevant staff, including imparting and ensuring full knowledge of the provisions of the Act, the Rules and this Code with regard to resolutionof complaints;

ensure that responsibilities and mandates are delegated to facilitate complaints resolution ofa routine nature;

ensure that thereis provision for the escalationof non-routine serious complaints and the handling thereof by staff with adequate expertise;

internal follow-up procedures to ensure avoidance of occurrences giving rise to complaints, or to improve services and complaint systems and procedures where necessary; and

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Specific obligations

19. (1) SubjecttotheotherprovisionsofthisPart,theinternalcomplaint resolution system and procedures of a provider excluding a representative must contain arrangements which-

(a) must-

(i)reducethedetails of theinternalcomplaintresolution system and proceduresof the provider, including all subsequent updating or upgrading thereof, to writing;

(ii) provide that access to the procedures is at all times available to clients at any relevant office or branch of the provider, or by electronicmedium, and that such availability is appropriately made known by public press or electronic announcements or separate business communications to existing clients;

(iii) include in the details envisaged in subparagraph (i), a reference to the dutiesof the provider and the rights of a client set outin Rule 6(a) and (b) of the Rules;

(iv) include in such details a clear summary of the provisions of the Act, which will apply whenever the client, after dismissalof a complaint by the provider, wishes to pursue further proceedings before the Ombud; and

(v) include in such details the name, address and other contact particularsof the Ombud;

(6) muststipulatethatcomplaintsmust, if possible,besubmitted in writing and must contain all relevant information, andthat copies of all relevant documentation must be attached thereto;

(4 mustprovidethatthereceipt of complaints is promptly acknowledged in writing to the client, with communication particulars of contact staff to be involved in the resolution of the complaint, and are properly internally recorded by the relevant staff for purposesof compliance with section18(b) and (d) of the Act;

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(d) mustmakeprovisionthatafter the receiptandrecording of a particular complaint, the complaint will as soon as practically possible be forwarded to the relevant staff appointedto consider its resolution, and that-

(i) thecomplaintreceivesproperconsideration;

(ii)appropriatemanagementcontrolsare available'to exercise effective control and supervision of the consideration process;

(iii) the client is informed of the results of the consideration withinthe time referred toin Rule 6(b) of the Rules: Provided that if the outcome is not favourable tothe client, full written reasons mustbe furnished to the client within the time referred to in Rule 6(b)of the Rules, andthe client must be advised that the complaint may within six months be pursued with the Ombud whose name, addressand other contact particulars must simultaneouslybe provided to tne ciient.

(2) In any case where a complaint is resolved in favour of a client, the provider must ensure that a full and appropriate levelof redress is offered to the client without any delay.

PART XI1

TERMINATION OF AGREEMENT OR BUSINESS

20. Subject to the Act, and sections 3(2)and (3) of this Code-

(a) (i) aprovidermust,subjectoanycontractualobligations,give immediate,effectto a requestof a clientwho voiuntarily seeks to terminate any agreement withthe provider or relating to a financial product or advice;

(ii) where the client makes the request on the advice of the provider, the provider must take reasonable stepsto ensure that the client fully understands all the implications ofthe termination;

(b) a provider, other than a representative who ceases to operate as such, must immediately notify all affected clients accordingly and take, where reasonably necessaryor appropriate in consultation with the clients and product suppliers concerned, reasonable steps

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to ensure thatany outstanding business is completed promptly or transferred to another provider; and

(c) where a representative ceases to operate as a representative of a provider, such provider must immediately take, where reasonably necessary or appropriatein consultation with the clients and product suppliers concerned, reasonable stepsto notify all affected clients accordingly and ensure that outstanding business is completed or transferred to such provider or another representative of that provider.

PART Xlll

WAIVER OF RIGHTS

21. No provider may request or induce in any manner a client to waive any right or benefit conferred on the clientby or in termsof any provision of this Code, or recognise, accept or act on any such waiver by the client, and any such waiver is null and void.

PART XIV

SHORT TITLEAND COMMENCEMENT

22. This Code is called the General Code of Conduct for Authorised Financial Services Providers and Representatives,2003, and comes into operation on the date determined by the Minister under 7 (1) of the Act. section