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Review of the FAIS Regulatory Examinations

In the FSB’s newsletter issued in July 2011, it indicated that any consideration to make changes in the current regulatory examinations will only be considered once sufficient data exists to evaluate progress:

The FSB, on advice of examination assessment experts, will publish the pass rate of the examination when at least 25% of candidates have written the examination as it will only then be in a position to identity the trends and factors influencing the pass rate, for example preparation, quality of training, diversity of industry, demographics, etc.

Contrary to the unsubstantiated speculation which currently abounds concerning the standard and degree of difficulty of the examination, analysing the trends and factors influencing the pass rate is a complex process and the pass rate cannot be correctly interpreted or accurate conclusions drawn without meaningful statistical information, which is lacking at this stage. Simply put, and by way of example, one candidate may find a particular question ambiguous, but whether that question can in fact be classified as such can only be determined from a statistical perspective once the particular question has been posed (and answered) in at least 50 examination papers determine 25% of the expected candidates had written at least once.

The fact that this figure has not yet been reached can possibly be ascribed to a wait-and-watch approach by many candidates. Let the others write, and maybe I will benefit from relaxed requirements. Readers may recall that the original deadline was 31 December 2011, less than three weeks from today.

Concerning the removal of ambiguous questions: this is an ongoing process. Each question in the databank is monitored individually, and those who “fail” the fairness test is removed or moderated and tested.

An outcome that many people are wishing for concerns the current pass mark of 65% for Key Individuals and 66% for representatives:

Although most tertiary institutions require only 50% as a pass mark when using multiple choice examinations, negative marking methodology is applied. The Independent Examination Board informed the FSB that if the pass mark is reduced to 50% and negative marking is not applied, it could happen that a person who knows 35% of the subject matter could obtain 51%. Negative marking may also negatively affect the overall pass rate.

A person who only knows 35% of the legislative framework under which he/she operates cannot be regarded as competent to perform their regulatory role. The valid question arises: why should the examinations be implemented if it cannot confidently be stated that persons that have successfully completed the examination really know and understand their regulatory role and responsibilities? The whole examination process would then be rendered meaningless.

We believe that the magical figure of 25% mentioned above is not far off, and expect an announcement any day now.

Those who await massive changes need to temper their expectations. Change is already taking place on a regular basis, with decisions based on practical fact, rather than theoretical assumptions.
 

Editor's Note

If under 25% have written in a year, it seems unikely that 75% will write in six months.Do you think the FSB will grant a further time extension for completion of the exams?

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