The levies payable to the Financial Sector Conduct Authority in the 2025/26 financial year will increase by 5% if proposed amendments to the levy Schedules are adopted.
On 9 September, Minister of Finance Enoch Godongwana published proposed amendments to three of the Schedules to the Financial Sector and Deposit Insurance Levies Act.
These Schedules contain the formulae for the levies payable to the FSCA (Schedule 2), the Financial Services Tribunal (Schedule 3), and the two statutory ombud schemes (Schedule 5): the Ombud for Financial Services Providers and the Office of the Pension Funds Adjudicator (OPFA).
FSCA levy
The entities supervised by the FSCA include banks, insurers, collective investment scheme managers, financial services providers, co-operative financial institutions, certain market infrastructures (exchanges, central securities depositories, clearing houses, central counterparties, trade repositories), over-the-counter derivative providers, credit rating agencies, retirement funds, and retirement fund administrators.
As a result of the FSCA’s request to amend Table B in Schedule 2, the following entities will start paying levies in 2025/26: external central counterparties, external trade repositories, external credit rating agencies, and domestic and foreign benchmark administrators.
Table B in Schedule 2 sets out the formula for calculating the levy payable to entities supervised by the FSCA. The levy comprises a base amount and a variable amount or amounts.
If the 5% increase is implemented, Category I or IV FSPs and Category I or IV FSPs that provide only Long-term Insurance Subcategory A products and/or Friendly Society Benefits will pay a base amount of R4 006.80 instead of R3 816.
The base amount for Category II, IIA, or III FSPs will rise from R7 950 to R8 347.50.
There is one variable amount for Category I or IV FSPs and Category I or IV FSPs that provide only Long-term Insurance Subcategory A products and/or Friendly Society Benefits. This variable amount is based on the average total number of key individuals plus the average total number of representatives, calculated from 1 September of the preceding levy year to 31 August of the current levy year.
The amount for each rep and KI will increase from R551.20 to R578.76, except for Category I or IV FSPs that provide only Long-term Insurance Subcategory A products and/or Friendly Society Benefits, in which case the amount will remain at R250.
There are two variable amounts for Category II, IIA, or III FSPs: the total rep and KI amount and the total value of investments under management or administration on 31 August of the levy year.
The percentage used to calculate the levy on investments under management or administration will increase by 5%, from 0.0019711% to 0.0020697%.
The proposed amendments will also increase by 5% the cap on the maximum levy payable by any category of FSP, from R2.65 million to R2 782 500.
Supervised entities had to pay a special levy in the first two financial years after the implementation of the Financial Sector and Deposit Insurance Levies Act in 2023. The 2024/25 financial year was the last one in which the special levy of 7.5% could be imposed, and it falls away in 2025/26.
Tribunal levy
The levy payable to the Financial Services Tribunal is a percentage of the levy payable to the FSCA or the Prudential Authority, or the sum of both levies if an entity is supervised by both Authorities.
The proposal is to increase the percentage by 5%, from 2.65% to 2.78%.
FAIS Ombud levy
The formula for calculating the FAIS Ombud levy comprises a base amount and a variable amount. The variable amount is calculated by multiplying the levy per KI and representative by the average total number of KIs plus the average total number of representatives, calculated from 1 September of the preceding levy year to 31 August of the current levy year.
It is proposed to keep the base amount at R1 100, but the amount per KI and rep will increase by 4.6%, from R690 to R722.
The cap on the maximum levy payable to the Ombud will remain at R333 275.
OPFA levy
Retirement funds must pay a levy to the OPFA. The formula for calculating the levy also comprises a base amount and a variable amount.
It is proposed to keep the base amount at R0 and to increase the variable amount by 4.7%, from R10.38 to R10.87 per eligible retirement fund member. These are members and other persons who receive regular payments from a retirement fund as reflected in the fund’s latest annual financial statements submitted to the FSCA on 28 February of the preceding levy year. Beneficiaries and members with unclaimed benefits are excluded.
There is no cap on the levy that can be paid to the OPFA.
Ombud Council levy
All entities supervised by the FSCA must pay a levy to the Ombud Council.
In terms of Schedule 4, the levy is fixed at 2.5% of the levy amount paid to the FSCA. The Council levy will increase as a result of the increase in the levies payable to the FSCA.
Deadline to comment
The deadline to comment is Thursday, 9 October. Comments should be submitted to CommentDraftLegislation@treasury.gov.za.
Click here to download Government Notice 6590.
You’d think that after fining brokers and institutions hundreds of millions of Rands, they could have given us a freebie? Seems like the FSCA is just another money grabbing government institution?
Seems so yes – where-ever the government is involved monet grabbing will take place.
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