The below gives a brief explanation of continuous professional development (CPD) in the context of the new fit and proper requirements and how it can differ from CPD that is required for persons who hold professional designations from professional bodies such as the IISA and FPI.
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Continuous Professional Development (CPD) explained
This note serves to explain the difference between CPD in terms of Board Notice 194 of 2017 – the Determination of Fit and Proper Requirements for Financial Services Providers, applicable from 1 June 2018 – and CPD that is a requirement for persons who hold a professional designation from a professional body such as the IISA and FPI, where CPD has been a requirement for some time now.
We can refer to CPD in terms of the Board Notice above as “regulatory CPD” for fit and proper competence purposes, and CPD for persons who are members of a professional body as “professional CPD”.
Regulatory CPD in terms of the Board Notice:
“CPD activity” means an activity that is accredited by a Professional Body, such as the IISA or FPI, who confirmed that the activity is verifiable. In the event of face-to-face training, “verifiable” means that attendees must be identifiable by means of ID document, passport or driving license.
Note: Product specific training is excluded from a regulatory CPD activity and therefore FSPs, key individuals and representatives who want to attend any type of CPD accredited training, must make sure if the training is not aimed at purely product training. If this is the case, the CPD hours accredited to the training cannot be claimed for regulatory CPD purposes.
The content of a training program for regulatory CPD accreditation, which can be claimed for fit and proper competence requirements, must relate to some of the following criteria as prescribed by section 32(1)(c) of the Board Notice:
- are relevant to the functions and role of the FSP, key individual and representative;
- contributes to the skill, knowledge, expertise and professional and ethical standards of the FSP, key individual and representative;
- addresses any identified needs or gaps in –
- the technical knowledge of the FSP, key individual and representative;
- the generic knowledge and understanding of the environment in which the financial service is rendered or managed or overseen; and
- the knowledge and understanding of applicable laws; and
- adequately takes into account changing internal and external conditions relevant to the classes and subclasses of business, the category of financial services and the financial products for which the FSP, key individual or representative is authorised, approved or appointed.
When a person or an institution applies to a professional body for regulatory CPD accreditation of a program or presentation, the professional body must evaluate the content of the training against the criteria mentioned above and must then decide if it is of acceptable quality. Only then will the content be approved and allocated an hour value for regulatory CPD purposes. However, notwithstanding this, it is the responsibility of the FSP to ensure that the CPD content is appropriate and relevant for regulatory CPD purposes.
Persons who are members of the IISA, a professional body, must complete CPD activities in order to maintain/retain their professional designations such as Fellowship, Associateship or Licentiateship.
IISA defines CPD for purposes of maintaining a professional designation as follows:
Continuing Professional Development (CPD) is a means of staying up to date with market activity, changes in legislation and practice, changes in areas of specialisation, or simply to study further in fields related to your market or interests. It includes attending conferences/seminars/ workshops/courses.
In practice members of the IISA may accumulate CPD hours by attending training that is aimed more at products and in this way comply with the IISA requirements for CPD. Such product training will, however, not be allowed for regulatory CPD as explained above.
If the training conforms to the criteria for regulatory CPD, then the member of the IISA can claim the CPD hours for both regulatory CPD purposes and for professional CPD purposes.
Persons who are members of the FPI, a professional body, must also complete CPD activities in order to maintain/retain their professional designations such as Certified Financial Planner, Financial Services Advisor and Registered Financial Planner.
FPI defines CPD for purposes of maintaining a professional designation as follows:
Continuous Professional Development, in an FPI context, is a process of lifelong learning whereby a financial planning professional systematically engages in activities that maintain abilities, skills and knowledge required for a professional practice. Continuous Professional Development (CPD) refers to activities that develop and maintain capabilities to enable members to perform competently within their professional environments.
The FPI offers a variety of online programs that conform to their professional CPD standards and also conform to regulatory CPD criteria. Members of the FPI will therefore be able to record such training for both regulatory and professional CPD purposes.
Note: It is the professional body that will decide what events are suitable for professional CPD purposes and decide on the allocation of CPD hours under the ultimate control of the South African Qualifications Authority (SAQA).
While in some cases an event may qualify for both regulatory and professional CPD purposes, in other cases the content requirements may vary or the time allocation may be different.
If you need to comply with the regulatory CPD requirements for fit and proper competence purposes, make sure the CPD accredited training offered is in line with the criteria as set out in section 32(1)(c) mentioned above.