FICA and your FSB Licence

I recently spoke to a broker in the North-West Province who only conducts short-term business, but is also licenced for several other categories. This is quite common – many of those who applied to the FSB for accreditation in the earlier years added as many other products as they qualified for, in case they decided to expand their businesses in future.

This particular broker submitted his annual report to the FSB and was informed, as a result of this, that he was required to register with the Financial Intelligence Centre (FIC) as an accountable institution.

The fact that he never conducted any life or investment business makes no difference. He is obliged to answer all related questions in his compliance report as well.

We published the requirements for registration with the FIC in an article earlier this year, and repeat the information below.

Accountable Institutions

If your FSP is authorised to render financial services in respect of any financial product other than short-term products and/or health benefits, it is classified as an accountable institution.

Juristic representatives of FSPs are also obliged to register in their own capacity if their products require them to do so.

Reporting Institutions

The official FIC guidelines indicate that this applies to a person who carries on the business of dealing in motor vehicles. Each operating unit or branch of a motor vehicle dealer will be regarded as a separate reporting institution and will be required to register separately. It must however be noted that, in instances where different franchise owners are operating under the same name, those franchise owners are separate legal persons and will be regarded as separate accountable institutions which need to register with the Centre separately.

We requested clarity from the FIC on this last statement, as we do not agree, but have not heard from them yet.

If you are obliged to register with the FIC purely on the basis of products on your licence which you never market, you have two options:

  • request the FSB to remove the products which oblige you to register or
  • register with the FIC

There is a further aspect to consider: Continuous Professional Development (CPD) is included as part of recent legislative changes and you will most likely be obliged to conform to the criteria for every category on your licence. While this is not yet compulsory, except where it is an obligation of a professional body you belong to, it may very well become another straw on the long-suffering camel’s back.

It may be time to consider whether it is worth retaining “dormant” categories on your licence.

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