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finance

Financial Soundness Requirements – Exemption of FSPs and Juristic Representatives from certain obligations

FSCA FAIS Notice 21 of 2020 Notice contains exemptions from sections 45(2), 48(1) and 48(2) of the Determination, as applicable, for the period 1 April 2020 to 31 March 2021.

The extent of exemptions:

Category I FSPs that do not hold, control or has access to client assets or that do not collect, hold or receive premiums or other monies in respect of a financial product, and a juristic representative of such a FSP, are exempted from section 45(2) of the Determination for the period 1 April 2020 to 31 March 2021.
Specific FSPs and juristic representatives are exempted from section 48(1) and (2) of the Determination for the period 1 April 2020 to 31 March 2021.
The exemptions do not apply to an FSP or juristic representative that is a:
a) bank as defined in section 1 of the Banks Act;
b) insurer as defined in section 1 of the Insurance Act; or
c) authorised user as defined in section 1 of the Financial Markets Act.

These exemptions are subject to various conditions, including:

specific financial soundness requirements, which are less onerous than those prescribe in sections 45(2), 48(1) and 48(2) of the Determination;
certain reporting requirements; and
a prohibition on certain payments and distribution of assets unless approved by the Authority.

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