Chapter 1

Question 1

What is the financial services sector?

Answer 1

The financial services sector provides the necessary infrastructure that allows people to make day-to-day economic transactions

Question 2

What are the financial services sectors?

Answer 2

1. Banks
2. JSE Limited
3. Long-term insurers(life insurers)
4. Non-life insurers
5. Medical Schemes
6. Employee Retirement Benefit Suppliers
7. Collective Investment Scheme Managers
8. Financial Services Providers(FSPs)

Question 3

What are the legal structures of the financial services sector?

Answer 3

1. Banks
   - Must be registered as a public company
   - Be registered by the Registrar of Banks
2. JSE Limited
   - Licensed to operate under Financial Markets Act
   - Supervised by the FSCA
3. Long-term insurers
   - Licensed by the Prudential Authority
4. Non-life insurers
   -Licensed by the Prudential Authority
5. Medical Schemes
   - Must be registered by the Registrar of Medical Schemes
6. Employee Retirement Benefit Suppliers
   - Registered by the Registrar of Pension Funds
   - The Commissioner for Inland Revenue approves these funds
   - Each fund should appoint 4 members to act as trustees
7. Collective Investment Scheme Managers
   - Registered by the Registrar of Collective Investment Schemes
   - Governed by Collective Investment Schemes Control Act
   - A trustee must be appointed as a custodian of all cash and securities
   - Must meet requirements of the Association for Savings and Investment South Africa(ASISA) Standard on Fund Classification for SA regulated collective Investment portfolios
8. FSPs
   - Licensed by FSCA(sets out different product categories, class of business)
   - Governed by FAIS Act

Question 4

What are the products of the Financial services sector?

Answer 4

1. Banks
   - Transactional accounts
   - Savings accounts
   - Investment accounts
   - Bank cards
   - Loans
   -Asset Finance
2. JSE Limited
   - Equities
   - Bonds
   - Options
   - Futures
   - Other Securities
3. Long-term insurers
   - Risk cover
   - Savings
   - Income provision
4. Non-life insurers
   -Motor vehicle insurance
   - Homeowner’s insurance
   - Household insurance
   - All-risk insurance
   - Personal liability insurance
5. Medical Schemes
   - Basic care option
   - Hospital plan
   - Day-to-day care
   - Medical saving
   - Fully comprehensive plan
6. Employee Retirement Benefit Suppliers
   - Group risk insurance benefit
   - Pension fund
   - Provident fund
   - Preservation fund
   - Umbrella funds
7. Collective Investment Schemes Managers
   - Money-market
   - Equity funds
   - Real estate funds
   - Income funds
   - Prudential funds
8. FSPs
   - Must apply for licenses for different categories and sub-categories