Task2

• FSP license


  Authorization from the Registrar to render financial services, advice and/or intermediary services
• Obtaining an FSP license

  1. Lodge application in prescribed format

  2. Submit relevant supporting documents

  3. Pay prescribed license application fee

  4. Registrar may request additional information

  5. Registrar assesses applicant's key individual for fit and proper requirements

  6. If all requirements met, Registrar grants FSP license
• FSP license


  • May come with conditions and/or restrictions
  • Failure to comply can lead to suspension or withdrawal of license
  • License certificate must be visibly displayed at the FSP's offices
• Possible license conditions and restrictions

  • Applicant and key individual
  • Category, sub-category and financial services to be rendered
  • Classification category under the FAIS Act
  • Specific products or sub-categories to be rendered
• Standard license conditions for all FSPs

  • Changes in FSP profile and submission
  • Maintaining a key individual
  • Maintaining a representatives register
  • Changes to business name
  • Dealing only with licensed product suppliers
• Applicant for health service benefits must also obtain accreditation from the Council for Medical Schemes
• FAIS license categories


  • Category 1 - Advice and financial services (non-specialist)
  • Category 2 - Discretionary FSPs (fund/investment managers)
  • Category 2A - Hedge fund FSPs
  • Category 3 - Administrative FSPs
  • Category 4 - Intermediary services
• Each license category has specific product sub-categories
• When an FSP changes its license, the fit and proper requirements for the new products and/or services must be met
• FSP license


  Financial Services Provider license
• Maintaining an FSP license


  Executing the required actions as a representative in terms of the Act
• An applicant must follow a process to apply and obtain a phased license and become an FSP
• Conditions must be followed to keep an FSP license or remain authorized
• There are different license categories as an FSP representative
• Fit and proper


  To provide financial services within the licensed categories and product or sub-categories for which they are appointed
• An FSP can apply for various licenses


  In respect of different products and categories
• An FSP's financial services are limited to the specific category or products for which a license is issued or granted
• An FSP's loss of premium income is not a relevant fact in the registrar's or commissioner's decision to suspend or withdraw its license
• An FSP's license is granted by the Financial Sector Conduct Authority (FSCA), not the South African Reserve Bank (SARB)
• FSPs are limited to the specific category, subcategory or products for which they have applied and authorized
• Requirements for the FSCA to issue a license

  • The FSP and key individual should meet requirements of personal qualities of honesty and integrity
  • Competence and operational ability
  • Relevant recognized qualifications of the category and products they apply for
  • Financial soundness
• Requirements around the display of licenses


  1. An FSP must display an original or certified copy of the license certificate in every business premises where financial services are rendered

  2. An FSP must ensure that a reference of the FAIS authorization is made in all business documentation, advertisements and other promotional material

  3. An FSP must ensure that copies of its FAIS license certificates can be produced on request
• A license is issued in the form of a certificate
• Once issued, an FSP must ensure the license certificate is prominently or visibly displayed at its business premises where financial services are rendered
• The FAIS Act requires the display of the license certificate as per the process items
• We hope you enjoyed the video and learnt a lot
• Please make sure to check out our other FAIS videos
• Suspension


  The license is taken away temporarily so that non-compliance issues can be investigated or corrected
• Withdrawal


  The non-compliance issues are so serious that an FSP's license is taken away and the business needs to close and is prohibited from rendering any financial services
• Reasons for license suspension or withdrawal

  • The FSP or its key individual no longer meets any one of the fit and proper requirements
  • The FSP operating without an approved key individual
  • The FSP not disclosing all required information when applying for a license or submitting false or misleading information
  • The FSP's failure to comply with whatever provisions of the FAIS Act and its general code of conduct
  • The FSP's failure to pay annual levies, administrative penalties or any interest that is charged or imposed
  • The FSP's failure to comply with a directive issued under the FAIS Act
  • The FSP's failure to comply with license conditions and restrictions
• Process before suspension or withdrawal of license

  1. The FSCA may consult other regulatory authorities to get more information

  2. The FSCA must notify the FSP of the intention to suspend or withdraw the license and the reasons

  3. The FSCA will provide the FSP an opportunity to respond

  4. The FSCA must notify the FSP of the time frame of the suspension and the terms and conditions to lift the suspension

  5. The FSCA will set reasons or terms and conditions for the withdrawal of a license
• The FSCA will consider the response from the FSP before making a final decision to suspend or withdraw its authorization
• The FSCA may decide not to take these actions if the matter has been rectified
• Once a decision has been made, the registrar will notify the FSP of the outcome in writing and publish it on its website and other media platforms
• During suspension


  The FSP will be regarded as unauthorized and cannot render financial services
• A suspended license can have its suspension lifted and the FSP allowed to carry on rendering financial services, but a withdrawn license cannot be reinstated
• Lapsing of a license


  This action is initiated by the FSP as a result of the FSP not being capable of complying with the FAIS Act due to death, sickness, or sequestration
• Reasons for lapsing of license for an FSP that is a natural person or sole proprietor

  • The FSP becomes incapable of carrying on business due to physical or mental disease or injury
  • The FSP is finally sequestrated
  • The FSP dies
• Reasons for lapsing of license for an FSP that is not a natural person

  • The FSP is finally liquidated or dissolved
  • The business of the FSP becomes dormant
  • The FSP voluntarily surrenders its license to the FSCA
• The FAIS Act does not talk about reinstatement of a lapsed license, so an FSP whose license has lapsed would need to apply for a new license if it wishes to render financial services again in the future