# Board Notice 194 of 2017 Explained: Fit & Proper, CPD Hours (6, 12, 18) & DOFA Supervision

> **Category:** Pillar 1: FAIS Framework & Governance | **Updated:** 2026-11-03 07:48:07 | **Canonical URL:** https://re5examprep.co.za/blog/board-notice-194-of-2017-fit-and-proper-cpd-hours-supervision

**Executive Summary:** Master Board Notice 194 of 2017 and FSCA FAIS Notice 86 of 2018 for your RE5 & RE1 exam: the 5 Fit and Proper pillars, CPD cycle (1 June–31 May), 6/12/18 CPD hours, and supervision timelines.

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Statutory Quick Answer (AEO Summary)

      **Board Notice 194 of 2017** prescribes the **5 Fit and Proper pillars** for FSPs, Key Individuals, and Representatives: (1) Honesty, Integrity & Good Standing, (2) Competence (Experience, Qualifications, Regulatory Exams, Class of Business & Product Specific Training), (3) Continuous Professional Development (CPD), (4) Operational Ability, and (5) Financial Soundness. The annual **CPD cycle runs from 1 June to 31 May** requiring **6 hours** (single subcategory), **12 hours** (multiple subcategories in 1 class of business), or **18 hours** (more than 1 class of business).

    

    
## 1. The 5 Statutory Fit & Proper Pillars (BN 194 of 2017)

    Every FSP, Key Individual (RE1), and Representative (RE5) must continuously satisfy five core Fit and Proper requirements under Section 4 of Board Notice 194 of 2017:

    
      - Honesty, Integrity and Good Standing (Sections 8–10): No convictions or civil findings for fraud, dishonesty, theft, forgery, perjury, misrepresentation, or breach of fiduciary duty.

      - Competence (Sections 12–30): Consists of five sub-elements: Minimum Experience (0.5 to 5 years depending on product subcategory; lapses after 5 consecutive years of non-participation).

          - Minimum Qualifications (FSCA-recognised qualification on the published list; must be completed within 6 years under supervision).

          - Regulatory Examinations (RE5 for Representatives within 24 months of DOFA; RE1 for Key Individuals prior to approval).

          - Class of Business (COB) Training (completed within 12 months under supervision).

          - Product Specific Training (PST) (must be completed prior to rendering any financial service on that product, including material product updates).

        
      
      - Continuous Professional Development / CPD (Sections 31–34): Annual ongoing training verified and accredited by a Professional Body (such as the FPI).

      - Operational Ability (Sections 35–42): Fixed physical business address in South Africa, communication facilities, data security, disaster recovery, corporate governance, and segregation of client assets.

      - Financial Soundness (Sections 43–52): Assets must exceed liabilities; natural person Representatives and Key Individuals must not be unrehabilitated insolvents or under provisional sequestration.

    

    
## 2. CPD Hours & Cycle Rules (1 June to 31 May)

    The annual FAIS CPD cycle **always runs from 1 June of every year to 31 May of the following year** (never the calendar year or SARS tax year). Here is how minimum CPD hours are calculated:

    
| Scope of Financial Services Rendered | Minimum CPD Hours per Cycle (1 June – 31 May) | Statutory Reference |
| --- | --- | --- |
| Single Subcategory (e.g., only Long-Term Insurance Subcategory B1) | 6 Hours per annual cycle | BN 194 of 2017, Sec 33(1)(a) |
| Multiple Subcategories within ONE Class of Business | 12 Hours per annual cycle | BN 194 of 2017, Sec 33(1)(b) |
| More than ONE Class of Business (2 or more classes) | 18 Hours per annual cycle | BN 194 of 2017, Sec 33(1)(c) |

    **Pro-Rata CPD Reduction Rule:** If a Representative is continuously absent for more than **3 months** due to maternity, paternity, or serious illness/incapacity, CPD hours are reduced pro-rata using the formula: `[(Required Hours ÷ 12) × (12 − Months Absent)]`. FSPs must record a Representative's CPD activities within **30 days after the expiry of the CPD cycle** (i.e., by 30 June) and retain records for **5 years**.

    
## 3. Services Under Supervision (FSCA FAIS Notice 86 of 2018)

    A newly appointed Representative who hasHonesty & Integrity and entry-level education (Matric / Grade 12) may work under supervision while completing their Competence requirements:

    
      - Product Specific Training (PST): Must be completed BEFORE rendering any service (cannot be deferred under supervision!).

      - Written Supervision Agreement: Must be signed by the FSP/Supervisor and Supervisee PRIOR to rendering any services.

      - Client Disclosure: The supervised Representative must proactively disclose in writing to clients that they are acting under supervision.

      - Class of Business (COB) Deadline: Within 12 months from first appointment to that product.

      - RE5 Exam Deadline: Within 24 months (2 years) from Date of First Appointment (DOFA).

      - Full Recognised Qualification & Experience: Within 6 years (72 months) from appointment.

    

    
## 4. Frequently Asked Questions (FAQs)

    
      
        
### What are the exact start and end dates of the FAIS CPD cycle?

        Under Section 31 of Board Notice 194 of 2017, the annual Continuous Professional Development (CPD) cycle starts on 1 June of every year and ends on 31 May of the following year.

      
      
        
### How many CPD hours are required for 1 subcategory vs 1 class of business vs multiple classes of business?

        Section 33(1) of Board Notice 194 of 2017 requires 6 CPD hours for a single subcategory, 12 CPD hours for more than one subcategory within a single class of business, and 18 CPD hours for more than one class of business.

      
      
        
### Can a Representative render financial services under supervision before completing Product Specific Training?

        No. Product Specific Training (PST) must be completed prior to rendering any financial service in respect of that financial product, even if the Representative is appointed under supervision.

      
      
        
### Are Tier 2 Representatives (such as Funeral Policy Category A or Friendly Society benefits) required to write RE5?

        Representatives who render financial services exclusively in respect of Tier 2 financial products or execution of sales under script may be exempt from RE5 and CPD, provided they meet the specific Tier 2 conditions in Board Notice 194 of 2017.

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## Practice Exam Questions on This Topic

### Question 1 (FAIS Act 37 of 2002, Sec 13(3))
When a new Representative is appointed or an existing Representative leaves an FSP, within how many days must the FSP update its Representative Register and notify the FSCA?
- **A:** Within 5 business days of the change
- **B:** Within 15 days of the change
- **C:** Within 30 calendar days of the change
- **D:** Within 6 weeks of the board resolution

**Correct Answer:** B — Moonstone Number Trap: Under Section 13(3) of the FAIS Act, updates to the Representative Register (as well as FSP profile changes under Section 8) must be reported to the FSCA within 15 days.

### Question 2 (Board Notice 194 of 2017, Sec 31 & Sec 33)
What are the official annual start and end dates of the FAIS Continuous Professional Development (CPD) cycle, and how many hours are required if a Representative advises across MORE than one class of business?
- **A:** 1 January to 31 December — 12 hours
- **B:** 1 March to 28 February — 18 hours
- **C:** 1 June to 31 May — 18 hours
- **D:** 1 June to 31 May — 6 hours

**Correct Answer:** C — The statutory CPD cycle runs from 1 June to 31 May of the following year. Minimum hours: 6 hours (single subcategory), 12 hours (multiple subcategories in 1 class of business), and 18 hours (more than 1 class of business).

### Question 3 (FAIS Act 37 of 2002, Sec 8(4) & Sec 13)
Which statement accurately describes the legal difference between how a Key Individual (RE1) and a Representative (RE5) are authorised?
- **A:** A Key Individual must be formally approved by the FSCA before taking office, whereas a Representative is appointed by the FSP
- **B:** Both Representatives and Key Individuals must be pre-approved by the FAIS Ombud before advising clients
- **C:** A Representative is approved by the FSCA, while a Key Individual is appointed internally by the Compliance Officer
- **D:** Neither requires approval if they have more than 5 years of industry experience

**Correct Answer:** A — Crucial Role Trap: The FSCA approves Key Individuals (and FSP licences), whereas the FSP itself appoints Representatives and updates the central register within 15 days.

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