The outcomes from this meeting are as follows:

·          SAVCA members should apply for a Category 1 license for the investment advisor to the fund, provided that the investment advisor does not provide discretionary financial services. If the fund is managed by a discretionary fund manager, then the fund manager will require a Category II license.  This is generally the consensus among legal advisors.

·          A new code of conduct is being drafted for financial services provided to certain categories of sophisticated and institutional clients, which will contain less onerous obligations.  The FSB agreed that a private equity / venture capital fund would be classified as a "client" in this new code, which would mean that the investment advisor to such a fund would only be required to comply with the new code in respect of financial services rendered to the fund and not the general code of conduct.  The private equity industry will be accommodated in the drafting of the new codes.  The new code should assist the private equity industry to comply with the FAIS Act and to complete the annual compliance report.  SAVCA will be providing inputs for the drafting of the code.

·          With regard to the Fit & Proper Requirements; the FSB indicated that it would be unlikely that the private equity industry would be granted an exemption from these requirements as this is against current policy of the FSB.  The FSB acknowledged that the current Fit & Proper Requirements are inappropriate for the private equity industry.  In order to accommodate the private equity industry within the Fit & Proper Requirements, the FSB stated that what is needed urgently from the private equity industry is information on the appropriate experience and qualifications that should be set for private industry professionals in order to fulfill the fit and proper requirements. What is the benchmark for the private equity industry? What would investors require from a private equity fund manager in order to raise a fund?  SAVCA will be providing inputs to the FSB on these questions.

·          Exams to be written; attached is the latest circular from the FSB on examination requirements.  In the meeting the FSB confirmed that key individuals rendering financial services and representatives are required to write a regulatory exam and a product–knowledge exam.  The FSB acknowledged that the product-knowledge exam for "securities and financial instruments" is not appropriate for private equity professionals and indicated a willingness to set a specific product-knowledge exam for private equity professionals (which would be done in conjunction with SAVCA).  The FSB stated that the regulatory exam should be less burdensome if the private equity professionals are only required to have knowledge on the new (limited) code of conduct and not the general code of conduct