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2009 Levies
Category I and IV Financial Services Providers
An FSB letter dated the 16th December 2008 [Amendments to Fit and Proper Requirements, 2008: Financial Advisory and Intermediary Services Act, 2002 ("FAIS Act")] has been circulated to all financial services providers.
This letter states:
Key Individuals can perform two functions in terms of the FAIS Act, i.e. they can either manage or oversee the business or a part of it, or they can actually give advice and render intermediary services. When a key individual only manages and oversees the business or a part of it, they are regarded as only fulfilling the function of a key individual. When a key individual also gives advice or renders an intermediary service, they are regarded as acting as a representative.
In terms of the amendments in Part 3 of the Determination of Fit and Proper Requirements for Financial Services Providers, 2008 (Board Notice 106 of 2008)
all key individuals who are approved by the Registrar between 2004 and 31 December 2008 will automatically be recorded on the central register as representatives from 31 December 2008.
(Our underlining)
Should the key individual not act as a representative you are required to inform the Registrar to remove the person as a representative. Please note a key individual that is the only member, shareholder or director of a provider can not be removed as a representative.
Despite this sweeping statement, there have as yet been no changes made to the list of representatives of any financial services provider as far as we have been able to determine. The FSB website still shows the list of representatives as it originally appeared and the key individuals have not been added to this list yet.
However, paying the levy now becomes a typically more complicated process.
The levy notice requires you to calculate "the total number of key individuals of the financial services provider approved by the Registrar plus the total number of representatives appointed by the financial services provider, less key individuals that are also appointed as representatives, as at 31 August of the levy year".
You must ensure that you know:
- Which Key Individuals manage or oversee the business or a part of it and provide no financial service to clients;
- Which Key Individuals, irrespective of whether they manage or oversee the business or a part of it, also provide any form of financial service to clients;
- The total number of representatives appointed as at 31 August 2009
What to Do
Please check the status of your practice by going to the FSB website and confirming that the details and numbers of key individuals and representatives recorded there are correct.
If the details are incorrect treat the error as a profile change. Make sure you have informed the FSB to amend their records to correctly reflect the actual number of key individuals and representatives appointed as at 31 August 2009. If you do not do this, you will be charged a levy for key individuals and representatives who are no longer employed by you and you will have to pay the levy even if the FSB records are incorrect.
You will also be in contravention of Condition 1 of your Licence.
For those unfamiliar with the process, this is what must be done to check your status:
Go to www.fsb.co.za
Click on the FAIS menu item in the top right hand corner
Click on "Search for Financial Services Providers" (third button from the top)
Type your FSP number into the space adjoining "Search For FSP No"
Click "Submit"
Your FSP name will appear. Click "Details"
Click on "Key Individual"
Make a note of the names there
Click "Representatives"
Click on "Search" - Do not enter any detail in the box provided.
A list of all your Representatives registered with the FSB will appear.
- Determine the correct number of key individuals
- Determine the total number of representatives. If the names of any Key Individual appear, you must deduct the number of such persons from the total. The result is the actual number of representatives needed to calculate the levy.
- Add the total number of key individuals to the total number of Representatives.
- In other words, make sure that every person who is registered as a representative or a key individual is only counted once. This total number equals 'A' in the formula given in the Board Notice.
This number represents the letter A in the formula given in the Levy Notice
Please note, there is a sting in this years levy requirements that was not there last year. Paragraph 16(4) provides that should the Ombud levy not be paid, the licence of the authorised service provider will be withdrawn as per section 9 of the Act.
Extract from Board Notice 74 of 2009 – Levies on Financial Institutions
15 Levy on authorised financial services providers
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(1)
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Subject to sub-item (5), a person who is authorised in terms of section 8 of the Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002), as a Category I or IV financial services provider as defined in the Determination of Fit and Proper Requirements for Financial Services Providers, 2008, excluding any such provider who is also a Category II, IIA or III provider referred to in sub-item (3), must pay the levy referred to in sub-item (2) on or before 30 October of the levy year.
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(2)
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The levy, which is subject to a maximum of R1 017000, is calculated as follows:
(a) a base amount of R2 040; and
(b) A X R364
where A = the total number of key individuals of the financial services provider approved by the Registrar plus the total number of representatives appointed by the financial services provider, less key individuals that are also appointed as representatives, as at 31 August of the levy year.
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(4) |
Subject to sub-item (5), a person who is authorised in terms of section 8 of the Financial Advisory and Intermediary Services Act, 2002, as a Category I financial services provider as contemplated in sub-item (1), who renders financial services only in connection with financial products belonging to long-term Insurance Category A, referred to in subcategory (1) in Column One of Table A in paragraph 3(1) of the Determination of Fit and Proper Requirements for Financial Services Providers, 2008, must on or before 30 October of the levy year pay a levy subject to a maximum of R 1 017 000 and which is calculated as follows:
(a) a base amount of R2 040; and
(b) A x R130
where A = the total number of key individuals of the financial services provider approved by the Registrar plus the total number of representatives appointed by the financial services provider, less key individuals that are also appointed as representatives, as at 31 August of the levy year.
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16 Levy for funding of Office of Ombud for Financial Services Providers
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(1)
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Subject to sub-item (3), a person who is authorised in terms of section 8 of the Financial Advisory and Intermediary Services Act, 2002, as a Category I, II. IIA III or IV financial services provider as defined in the Determination of Fit and Proper Requirements for Financial Services Providers, 2008, must pay the levy referred to in sub-item (2) on or before 30 October of the levy year.
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(2)
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The levy, which is subject to a maximum of R143 880, is calculated as follows:
(a) a base amount of R528; and
(b) A x R198
Where A = the total number of key individuals of the financial services provider approved by the Registrar plus the total number of representatives appointed by the financial services provider, less key individuals that are also appointed as representatives as at 31 August of the levy year.
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(4) |
Should the levy mentioned in sub-item (2) not be paid, the licence of the authorised service provider will be withdrawn as per section 9 of the Act as mentioned in (16)(1 ).
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