HOW TO BECOME A FINANCIAL SERVICES PROVIDER IN SOUTH AFRICA
In a nutshell, registering for an FSP license entails applying to the Financial Sector Conduct Authority’s Registrar. Before receiving their licenses, the entity must satisfy specific licensing standards and adhere to a code of behavior to become authorized.
Before giving advice on various categories of financial goods and responsibilities, the entity must also be Adequate, which includes financial soundness, as defined by the Financial Advisory and Intermediate Services Act.
- Honesty and integrity are personal character traits.
- Experience, qualifications, and expertise are all examples of competence.
- Capability to operate
- Financial stability (of the business)
- Ongoing professional growth
Fsp South Africa
South African financial service planners are obliged by law to get a certification from the Financial Services Board to provide financial services (FSB). The FSB will then guarantee that these advisors are well-informed and educated about the financial themes they are offering guidance.
Some financial advisers are permitted to function as representatives or important personnel for the firm they work for. The company must be a registered Financial Services Provider (FSP) license holder.
The FAIS Act (Financial Advisory and Intermediary Services Act, 2002) regulates the sale of financial goods in South Africa. It applies to all FSPs (Financial Service Providers), even if they are outside the country.
You can only act as an FSP South Africa if you have a license that meets the demand of section 8 of the FAIS.
A Financial Service Provider (FSP) is a company that provides financial advice and intermediary services (including brokerages and insurance companies). These personalities are in charge of the FSP and all of the representatives who work for the FSP. They are also the people who must submit to the regulator and who the regulator will hold accountable for any actions taken against the FSP. They are the people who must report to the regulator and who the regulator will hold accountable for any actions taken against the FSP. Representatives are the individuals who will provide prospective policyholders with financial advice and complete all essential intermediary services about the products chosen.
A corporate entity or individual must be granted a license to operate as an authorized FSP in South Africa. They are unable to function as an FSP without this license. Filing to be an FSP is not an easy process; it is time-consuming and requires numerous criteria.
Section 1 of FAIS defines “financial product” as securities and foreign currency-oriented investment instruments. Anybody who provides financial product advice & intermediary services (any activities conducted on behalf of a customer with a view to buying, selling, or otherwise engaging in a financial product) must register as an FSP under FAIS.
No one may act or offer to function as an FSP in South Africa unless they are licensed to comply with the provisions of FAI’s section 8. FSPs based outside of South Africa are expressly prohibited from providing financial services in South Africa without the necessary license. FAI’s section 8(1) specifies that must send applications from FSPs based outside South Africa to the Registrar of FSPs (the Registrar). FAIS has been construed to allow South African investors to invest in international financial instruments on their initiative.
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