Authorised financial services providers are required to pay a levy to the FSB to cover the cost of the FSB’s supervision and a levy for funding the Office of the FAIS Ombud. Board Notice 81 of 2016 sets out the details of the levies which are payable by 31 October 2016. The FSB would have communicated to FSPs about the levies payable for 2016.
Levies due by FSPs will be calculated based on the information available to the Registrar on 31 August 2016. It is therefore important for FSPs to ensure that their information is correct and to notify the FSB of any changes before 31 August 2016, such as:
- Ensure that the Representative register on the FSB’s website is correct.
- Inform the FSB in writing if you wish to lapse your licence. For example, if the business has been discontinued, merged with another company, if you started working for somebody else and stopped doing business and would like to lapse your licence. Please note that if you wish to retain your licence, but you are not operating, that the annual levy is still to be paid.
- Notify the FSB in writing if you have a licence as a sole proprietor and hold another FSP licence in the name of a private company and/or Close Corporation and you would like the sole proprietor license to be lapsed before 31 August 2016.
- Ensure that the correct total value of investments under management has been submitted for discretionary FSPs (CAT II) and hedge fund managers (CAT IIA) FSPs or Linked Investment FSPs (CAT III).
- No licence will be automatically lapsed if the Registrar is not notified in writing before 31 August 2016.
Fee Increases
The base levy component for the FSB FAIS levy has increased by 2%. The increase in other levy components, including that of the FAIS Ombud, is 6%.
Calculation of Levies
- Category I and IV FSPs
A basic levy of R3459 + R553 per Key Individual/Representative – (less) key individuals also appointed as representatives, up to a maximum of R1,641,281.
- CAT I and/or IV FSPs ONLY licenced for Long-term insurance Category A and/or Friendly Society Benefits
A basic levy of R3459 + R250 per Key Individual/ Representative – (less) key individuals also appointed as representatives, up to a maximum of R1,641,281.
- Category II, IIA and III FSPs
A basic levy of R6 969 + R553 per Key Individual/Representative + (0.0000178575 x total value of investments managed on behalf of clients on 30 June of the levy year), up to a maximum of R1,641,281.
- FAIS Ombud Levy (due by all FSPs)
A basic levy of R 885 + R337 per Key Individual/Representative – (less) key individuals also appointed as representatives, up to a maximum of R239,700.
Further Important Information:
- The FSB has been deregistered for VAT purposes and levies are therefore exclusive of VAT.
- SARS has informed the FSB that the levy amount paid by FSPs is a tax deductible expense.
- Contact details of the FSP, including that of its accounting officer responsible for levies, must be correct and updated by using the FAIS online system. If any of the contact details are incorrect, the FSP runs the risk of the statement being sent to the wrong person, or incorrect email address. The FSP won’t know what to pay and will run the risk of having their licence suspended. Please make sure that all contact details are updated on the online system before 31 August 2016.
Should the levy not be paid, the licence of the authorised financial services provider may be withdrawn in terms of section 9 of the Financial Advisory and Intermediary Services Act.
Click here to read the publication of levies on Financial Institutions