The Financial Sector Conduct Authority (FSCA) published FSCA Notice 465 of 2021 on the Levies for Financial Institutions, 2021. The Notice has been through the consultation phase in June 2021, with interested parties having submitted their comments. Masthead considered the impact of the proposed increases in levies on independent financial advisors and submitted comments to the FSCA. The FSCA had initially proposed an increase of 4% in levies however, resolved to reduce levy increases from the proposed 4% to 3% for this levy period. This was in response to the comments the FSCA received by industry stakeholders, including Masthead, that the proposed general increase was too high, particularly given the circumstances relating to the COVID-19 pandemic and the impact on financial institutions.
There were some instances where a 0% increase was applied, e.g. the amount per Key Individual/Representative for Authorised Financial Services Providers (FSPs) authorised only for Long-term Insurance subcategory A and/or Friendly Society Benefits, which did not increase at all from 2020. The calculation factor or rate applied to the Assets Under Management for Category II, IIA and III FSPs also remained unchanged from the previous year. The FSCA has subsequently published its response to the comments received.
Levies on FSPs 2021
FSPs are required to pay a levy to the FSCA to cover the cost of the FSCA’s supervision and a levy for funding the Office of the FAIS Ombud, by 31 October of each year.
The tables below set out the FAIS levy which must be paid by the different categories of FSPs (section 15 of the Notice), and the FAIS Ombud levy which is due by all FSPs (section 16 of the Notice).
FAIS Ombud Levies
Multiple licence holders
Where there are multiple FSPs that form part of the same legal entity, they are jointly and severally liable for the payment of a single levy. The key individuals and representatives, for purposes of the levy payment, are deemed to be the key individuals and representatives of one FSP.
Where an FSP’s licence has been suspended on 31 August 2021, but the suspension is lifted after that date then the FSP is liable to pay the levy within 30 days from the suspension being lifted. The levy must be calculated based on the statistics of the FSP on the date of the suspension being lifted.
The FSCA levy invoices will be mailed towards the end of September 2021 and will be payable by 31 October 2021. FSPs are reminded to check that the FSCA has their correct contact details, to ensure that the Invoice reaches the FSP and can be paid before the deadline date. If an FSP does not receive their invoice ahead of the deadline date, we suggest that they contact the FSCA to request that this be re-sent to them. Should the levy not be paid, the licence of the FSP may be withdrawn in terms of section 9 of the FAIS Act.