FAIS
LEARNING GUIDE
MODULE 3
LESSON
3
Inter-Bank Compliance Training Project
Sponsored by BANKSETA
Specific Code of
Conduct for
Short-term Deposit
Business
Topics:
1 The role players affected by the Specific Code of Conduct
2 Key areas of the Specific Code of Conduct
3 The responsibilities within each key area
B A N K S E T A
S p o n s o r e d
P r o j e c t
Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
INTRODUCTION
Link
This Specific Code applies to Short-term Deposit Business not
exceeding 12 months. A general guide is that a short-term deposit
allows clients to access funds within a twelve month period.
Learning
outcomes
This lesson focuses upon the following learner outcomes:
 Specify the role players affected by the Specific Code
 Describe the key areas of the Specific Code
 List the responsibilities of each key area.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #1 ROLE PLAYERS AFFECTED BY SPECIFIC CODE
L/O #1
Specify the role players affected by the Specific Code.
Specific code
This Specific Code is aimed at FSPs who conduct short-term (less
than 12 month) deposit business in relation to clients ie banks. It
applies to every aspect of providing a service of short-term (less
than 12 months) deposit taking.
Individuals affected by the Specific Code are:
 The FSP
 The Representative working for the FSP
 The client.
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B A N K S E T A
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #2 KEY AREAS OF SPECIFIC CODE
L/O #2
Identify the key areas of the Specific Code.
Key areas
The Specific Code makes provision for a number of key areas:
1. General duties of FSPs
2. Confidentiality and privacy
3. Advertising
4. Complaint resolution
5. Miscellaneous.
1
2
Key Area
General duties
of FSPs
Confidentiality
and privacy
Description
This deals with three areas of FSP duties.
These areas are:
 Unsolicited contacting of clients
 General duties of the FSP
 Other information and explanations.
Confidentiality deals with:
 When you may disclose information about
your client and their affairs to other parties
 The circumstances under which marketing
information may be provided to the client.
3
Advertising
This deals with concentrating on the
restrictions for written and telephonic
advertising of the financial service or product.
4
Complaint
resolution
This deals with:
 Basic principles of systems and
procedures
 Resolution of complaints
 Specific obligations (of the complaints
procedures and the FSP).
5
Miscellaneous:
Waiver of rights
This deals with the waiver of rights.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA
L/O #3
List the responsibilities within each key area.
Key area #1:
General duties:
Unsolicited
contact
An unsolicited contact is any visit or call on the client that is not
originated by the client.
If...
The Representative
makes unsolicited
contact with a client
Then the Representative must…
 Right at the start of the contact,
explain the purpose of this
contact, visit or call.
 Act honourably, professionally
and accepting of the
convenience of the client.
Any further
Act honourably, professionally and
communications and
accepting of the convenience of
dealings occur as a result the client.
of the unsolicited contact.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Key area #1.2
General duties:
General
When you offer a financial service, you must ensure that you meet
these requirements in your interaction with the client:
 Act fairly and reasonably, promoting trust and confidence,
without compromising your integrity
 Comply with the Specific Code of Conduct in any contract that
you conclude with your client
 Make this Code of Conduct available to the client
 Make all relevant information available to clients in plain
language
 Assist a client to choose the correct deposit fitting his needs
o Remember that this includes traditional banking
products such as current accounts, savings and
transmission accounts and credit cards
 Assist a client to fully understand the financial implications of
the product chosen by him/her
 Never ask a client to sign any incomplete documentation. This
applies regardless of whether the document is completed by the
staff member on behalf of the client or by the client
 Take care that the relevant services relating to deposits are
safe and secure
 Ensure that your relevant staff members comply with this Code.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Key area #1.3
General duties:
Contractual terms
A FSP is required to ensure that contractual terms and conditions:
 Are fair
 Clearly distinguishable from marketing and promotional material
 Set out all rights and responsibilities of the client
 Avoid unclear technical or legal language and are supported by
proper explanations.
Representatives must carefully assess clients’ needs and
objectives so that their needs can be matched to an appropriate
product. The Code provides clear guidelines for this process:
 Consider the client’s circumstances and the type of deposit
during the process of providing advice.
Key area #1.4
General duties:
Giving
information about
the product
Representatives have a duty to provide clear and helpful
information to the client. The Code specifies what information you
should share with the client:
Specific information about the product
 Key features of the deposit
 How the deposit account will operate
 How funds can be withdrawn
 How the deposit earns interest
 How interest is paid
 Full details of all fees and charges including whether they are
negotiable
 Applicable interest rates, how interest is calculated and when it
is paid or deducted
 How funds may be dealt with at maturity
 Any penalties for early termination or withdrawals.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Key area #1.5
General duties:
Giving information
about banking in
general
The Code indicates the information that should be shared with
clients about banking in general. Clients need to understand
 Cooling off periods
 The difference between debit and stop orders
 Special procedures and safeguards that ensure safe
business.
Key area #1.6
General duties:
Giving information
about changing
circumstances
The changing circumstances of the client of the FSP may result
in changes, which will influence the status of the product. The
Code indicates that the following information should be shared
with the client:
 Additional charges or interest that apply in cases of early
withdrawal or cancellation
 Possible changes to interest rates
 Possible future changes to the terms and conditions of a
contract and the circumstances under which the changes
may adversely affect the deposit.
These might include:
 The rights of the client to access personal information
held by the Provider
 Information on what is required for client identification
when opening an account
 Information on the availability of unique identification
methods using PINS and passwords during the
relationship.
Other information that may need to be shared with the client at
various times includes:
 Information on the closing of branches, outlets, ATMs of the
Provider
 Information on any set-off between the credit balance of any
deposit and any other business debt that may be affected by
the Provider in its capacity as a bank or mutual bank.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Key area #1.7
General duties:
Giving
information about
closing an
account
Clients also need to be informed about what happens should the
FSP close a client’s deposit account.
 The account may only be closed after the client has been given
reasonable prior written notice
 The written notice must be delivered to the last address
provided by the client
 It must be without any prejudice to the legal rights of the client.
However, if the law requires it, the account may be closed without
any prior notice to the client.
Key area #1.8
General duties:
Account
operations
Account information can be presented in any of the following ways:
 Orally
 In writing
 Telephonically
 As otherwise agreed with the client.
The Code requires information to be presented on:
 Charges for account statements
 The procedures the client must follow to avoid the automatic
rollover (re-deposits) of deposits where the client does not want
this to happen
 The procedures the client must follow when there is a change in
personal identification or address
 The safeguards and essential precautions that must be
implemented, followed or taken when using telephonic or
electronic banking procedures for deposit accounts
 The procedure the client must follow to request correction of
statement errors.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Key area #2:
Confidentiality
and privacy
Confidentiality means not disclosing information about the client’s
affairs to other parties. As a rule the FSP or Representative may
not disclose ANY information about a client to any other person.
This rule is waived only under clearly identified circumstances.
The Specific Code of Conduct states that you may not disclose a
client’s private information to any other person, unless:
 The client requests it or gives their written consent
 The law compels it
 The disclosure is in the public’s interest
 The Provider’s interest requires it.
The FSPs must:
 Inform the client of the recording of any telephone
conversations with the client
 Give the client the reasons for this recording
 Only market other financial products to clients with their
consent.
 Not pressure the client to agree to the provision of other
services.
Key area #3:
Advertising
This Code provides principles that need to be followed for
advertisements.
“advertisement”, in relation to a FSP, means
any written, printed, electronic or oral communication (including a
communication by means of a public radio service), which is
 directed to the general public,
 any section thereof,
 to any client on request.
by any such person, which is intended merely to call attention to
the marketing or promotion of short term-deposit taking business
offered by the FSP, and which does not purport to provide detailed
information regarding any such financial services; and “advertising”
or “advertises” has a corresponding meaning…”
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Key area #3.1
Advertising
If an advertisement
contains:
Performance data
including awards and
rankings
Illustrations, forecasts
or hypothetical data
It must also contain:
References to their source and date.



Support in the form of basic
assumptions including:
o Performance
o Returns
o Costs
o Charges
A statement that they are not
guaranteed and are there for
illustrative purposes only
Clear indications of any dependence
for returns and benefits on the
performance of underlying assets or
other market factors.
A warning statement
about risks involved in
buying or investing in a
deposit
A warning statement prominently
rendered or displayed regarding the risks
involved.
Information about past
performance
A warning that past performance is not an
indicator of future performance.
Information about a
deposit whose
investment value is not
guaranteed
A warning that no guarantee is provided.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Key area #3.2
Public radio
service
advertising
Where a financial service is advertised on a public radio service,
the advertisement must include the business name of the FSP.
Key area #4.1
Complaints:
General rules
The Representative must:
 Assist any client who has a complaint to lodge it in writing
 Use the existing system to keep a record of all complaints for 5
years
 Deal with complaints from clients in good time and in a fair
manner
 Start the complaint investigation and respond promptly
 Tell the client what further steps to take under FAIS or any
other law if the client is not satisfied with the resolution offered.
Key area #4.2
Complaint
resolution :
Minimum
requirements
These are the minimum requirements to ensure effective and fair
resolution of complaints:
 Availability of adequate manpower and other resources
 Adequate training of all relevant staff
 Clear responsibilities for processing routine and serious
complaints
 Follow up procedures to avoid repeat complaints and to
improve service.
Key area #4.3
Complaint
resolution:
Specific
obligations
The FSP is also required to meet very specific criteria in resolving
complaints. You will find these listed in Appendix 3.2 Specific
Code of Conduct for Short-term Deposit Business.
Key area #5
Waiver of rights
The law is clear. You may not, under any circumstances, request a
client to waive any of the rights specified in the Code.
If a client wants to waive his/her rights, you may not accept it.
Waiver of rights is not acceptable under any circumstances.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Activity 1
This final activity gives you a chance to review what you have
learnt about:
 Complaints
 Waiver of rights.
Match the statement in the left column to the appropriate
comments in the right column.
A.
The complaints
procedure needs to be
transparent.
1 A client should be able to
lodge a complaint using
any communication
system.
B.
Clients may want to
waive their rights.
2 Clients will know exactly
how their complaints will
be resolved.
C.
Complaints systems
need to be easy to use.
3 Waiver of rights is not
acceptable under any
circumstances.
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
L/O #3 RESPONSIBILITIES OF EACH KEY AREA – cont.
Check your
thinking –
Activity 1
A–2
B–3
C–1
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B A N K S E T A
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
CONSOLIDATION
Consolidation
exercise
This lesson has given you a high level view of the key areas. Jot
down everything you remember about the key areas on the mind
map below.
Miscellaneous
Complaint
resolution
General duties of
FSPs
SPECIFIC
CODE
Confidentiality
and privacy
Advertising
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Specific Code of Conduct for Short-term Deposit Business
Module 3: Lesson 3
ASSESSMENT
Test your
knowledge &
understanding
Answer these short questions to test your knowledge and
understanding of this material. Choose the right answer.
Statement
3.3.1
3.3.2
3.3.3
3.3.4
3.3.5
True/False?
The Specific Code for Short-Term Deposit Business
relates to products not exceeding 12 months.
The Specific Code for Short-Term Deposit Business only
deals with the basic principles of the complaints systems.
Clients are granted certain rights by the provisions of the
Specific Code for Short-Term Deposit Business. You may
ask a client to waive those rights.
John Radebe decides that it would be convenient if he
contacts his clients before 08:00 in the morning, as he
does not have time to do this once the branch opens. This
is an acceptable practice.
Contact Centres do not have to tell their clients that they
record all calls.
Question 3.3.6
Individuals affected by the Specific Code for Short-Term Deposit
Business are:
a The Financial Service Provider
b The Representative working for the Short-Term
Deposit FSP
c The Client.
3.3.6.1 All of the choices are true
3.3.6.2 Choice (a) and (b) are true
3.3.6.3 Choice (b) and (c) applies
3.3.6.4 Choice (a) is true
3.3.6.5 Choice (b) is true
3.3.6.6 None of the choices are true.
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