FAIS Notice on Exemption of Eligible FSPs from submitting audited Financial Statements
On 21 July 2015 the Deputy Registrar of Financial Services Providers issued FAIS Notice 82 of 2015 which exempts eligible FSPs and eligible FSPs limited by product from submitting audited financial statements unless they are required to do so in terms of any other law or agreement.
An eligible FSP is a Category I FSP who does not receive or hold client premiums in terms of the Long Term or Short Term Insurance Acts or otherwise receive or hold clients’ money or other assets.
An eligible FSP limited by product is a Category I FSP authorised for Long Term Insurance sub-category A and/or Friendly Society Benefits only and who receives or holds premiums in terms of the Long Term Insurance Act, or otherwise receives or holds clients’ money or other assets.
Section 19(2)(a) of the FAIS Act requires FSPs to have their annual financial statements (AFS) audited. Previously, in terms of Board Notice 193 of 2011, certain qualifying FSPs were able to apply for an exemption from submitting audited AFS. However, Board Notice 193 of 2011 has now been repealed and a general exemption granted in terms of FAIS Notice 82 of 2015.
This is an important notice for affected FSPs as there are requirements coming out of this notice which will have to be communicated to your accountant, accounting officer, independent reviewer, etc. and which the FSP must comply with annually.
If your FSP falls into one of the above definitions of ‘eligible’, then every year Annexure A to FAIS Notice 82 of 2015 must be completed and signed by the Key Individual or Sole Proprietor and submitted to the FSB together with the AFS. Annexure A must be completed and submitted even if the FSP is required by another law or in terms of an agreement to have its AFS audited.
We have confirmed with the FSB that those FSPs who had not submitted their AFS by 31 July 2015 due to an extension being granted, will now have to complete and submit Annexure A together with their AFS. This exemption does not apply to either category of ‘eligible’ FSPs who had to submit their AFS to the FSB on or before 30 April 2015. This notice comes into effect on 31 July 2015.
Click here to read the full notice.