Levies on Financial Institutions

The Financial Sector Conduct Authority (FSCA) published a draft Notice on the Levies of Financial Institutions on 6 June 2019 and invited interested parties to submit their comments by 21 June 2019. Masthead considered the impact of the proposed increases in levies on independent financial advisors and submitted comments to the FSCA. The FSCA has subsequently published its response to the comments received.

Read the Responses to Comments Received document.

Subsequent to the consultation process, the FSCA has now issued Notice 384 of 2019 on the Levies of Financial Institutions. Authorised financial services providers (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 the levy year.

The Tables below set out the FAIS levy which must be paid by the different categories of FSPs (section 17 of the Notice), and the FAIS Ombud levy which is due by all FSPs (section 18 of the Notice).

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 is suspended on 31 August 2019, 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.

Important to note

Levies due by FSPs will be calculated based on the information available to the Authority on 31 August 2019. It is, therefore, important for FSPs to ensure that their information is correct and to notify the FSCA or make all necessary changes on the FAIS ePortal before 31 August 2019.

Should the levy not be paid, the licence of the FSP may be withdrawn in terms of section 9 of the FAIS Act. FSPs must, therefore, make provision for the levy which is due by 31 October 2019.

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[1] The total number of key individuals of the FSP approved in terms of FAIS plus the total number of representatives appointed by the FSP, less the key individuals that are also appointed as representatives as at 31 August 2019.

[2] The total value of investments managed on behalf of clients in terms of the authorisation as an FSP on 30 June 2019.  The investments under management held in foreign currency must be included at the exchange rate published in the Press at that date.