RE5 candidates study the General Code of Conduct as the rules governing individual client interactions. RE1 tests the same Code from a governance angle entirely: as a KI, your job is ensuring the whole FSP actually follows it — not following it yourself in a single conversation. At 17 QCs and 15.0% of the exam, this is nearly as heavy as Task 4, and together the two make up close to a third of your entire paper.
QC1 — Describe the general and specific duties of a provider
QC2 — Describe the processes needed to manage conflict of interest
QC3 — Describe what could possibly be a conflict of interest
QC4 — Define what needs to be in a conflict of interest policy
QC5 — Ensure that the FSP is managing potential conflicts of interest
QC6 — Apply the requirements of the General Code of Conduct for FSPs and Representatives
QC7 — Explain the disclosures that must be made before rendering a financial service
QC8 — Explain disclosures that must be made when rendering a financial service
QC9 — Check that disclosures are adequate to enable clients to make an informed decision
QC10 — Explain the requirements for a FSP when custody of financial products and funds occurs
QC11 — Confirm a separate bank account with a registered bank exists for client monies
QC12 — Explain GCOC requirements relating to risk management and insurance
QC13 — Explain GCOC requirements relating to marketing and advertising
QC14 — Explain the manner in which complaints must be handled under the GCOC
QC15 — Verify that complaints procedures and processes are in place
QC16 — Follow the complaints procedures and processes that are in place for the FSP
QC17 — Explain GCOC requirements relating to termination of agreement or business
QC1: General Duty vs Specific Duties
The Code works on two layers. The general duty (Sections 2–3) is short: act honestly, fairly, with due skill, care and diligence, in clients' interests and the industry's integrity. Every specific duty that follows — conflict management, disclosure, the advice process, custody of funds, complaints — is that same general duty translated into a concrete rule for a concrete situation. A "distinguish between general and specific" question is testing whether you know the Code has this two-layer structure.
QC2–QC5: Conflict of Interest Management
Section 3A requires more than good intentions — a written COI policy, reviewed at least annually, identifying likely conflict situations and how the FSP will manage (not merely disclose) them. And a conflict of interest is broader than commission alone: personal relationships, ownership stakes, and non-cash benefits — vouchers, hospitality, sponsored travel — all count if they could realistically sway a recommendation.
The materiality threshold is R1,000 per year from the same third party — and it's cumulative, not per transaction. QC5 is the ongoing KI oversight skill: actively checking the policy is being applied to real situations as they arise, not just that the document exists.
QC7–QC9: Disclosure — Before and While
Before any service is rendered, the client must know who they're dealing with — the FSP's name, licence status, and whether the representative can advise across the whole market or only a limited supplier range. Once advice is actually being given, the obligation shifts to the specific recommendation: its reasons, its terms and risks, and exactly what the representative earns from it.
QC9 tests completeness: partial disclosure doesn't satisfy the Code because "the important part" was covered — each required element is independently mandatory. A representative who discloses commission fully but never mentions tied-agent status has only completed part of the obligation.
QC10–QC11: Custody of Funds
Client funds must sit in a separate, dedicated account with a registered bank, and any money received must be deposited within one business day. The account may only ever contain client funds — mixing them with the FSP's own operating funds, even briefly, is a serious breach regardless of whether any client actually loses out. QC11 is the verification skill: confirming this account genuinely exists and is used correctly, not assuming it does because "that's standard practice."
QC12–QC17: Risk Management, Marketing, Complaints and Termination
The Code also sets specific requirements around risk management and insurance arrangements, and around marketing — advertisements cannot create misleading impressions, and any illustration or forecast must be realistic rather than designed to oversell.
Complaints must be acknowledged, investigated impartially, and resolved within the FSP's own stated timeframe, with clients told of their right to escalate to the FAIS Ombud if unsatisfied. QC15–16 test whether a documented process genuinely exists and is actually followed — a representative who says "don't worry, I'll sort it out personally" and never logs the complaint has bypassed the FSP's own process. Finally, terminating an agreement must never unfairly disadvantage the client — penalty structures must have been disclosed at the outset, not sprung on the client only once they try to leave, and a client can never be made to waive a right the Code gives them.
Quick Recap
- The Code has two layers: one general duty, and specific duties that apply it to concrete situations
- A conflict of interest can be non-cash; the R1,000 threshold is cumulative per third party, per year
- Disclosure is only complete once every required element is covered, not just the biggest one
- Client funds need their own account, deposited within one business day, never mixed with the FSP's own money
Govern the Code, Don't Just Know It
RE Mastery Hub's Task Quizzes test this from the KI's oversight angle — spotting the governance gap, not just the individual breach.
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