A Financial Services Provider (FSP) must be authorised by the Financial Sector Conduct Authority (FSCA) under the Financial Advisory and Intermediary Services Act 37 of 2002. Rendering financial advice or intermediary services without authorisation is a criminal offence.
Authorisation is not a registration formality. The FSCA assesses the applicant against fit and proper requirements covering honesty and integrity, competence, operational ability and financial soundness, and it grants authorisation for specific categories and product subcategories.
Business Requirements at a Glance
An application must satisfy the fit and proper requirements across all four dimensions.
- Honesty and integrity — for the applicant and every key individual, with defined convictions and findings disqualifying
- Competence — recognised qualifications, regulatory examinations and experience appropriate to the categories applied for
- Operational ability — premises, systems, record-keeping, communication and business continuity arrangements
- Financial soundness — assets exceeding liabilities and, for some categories, prescribed capital and liquidity
- At least one appointed key individual who manages and oversees the financial services
- A compliance officer, where the category or size of the business requires one
- Professional indemnity and fidelity insurance, where prescribed for the category
Registration and Legal Requirements
Categories determine what you may do. The Act distinguishes between categories — broadly, giving advice and rendering intermediary services, discretionary investment management, administrative services and others — and within each, product subcategories such as long-term insurance, short-term insurance, collective investments, shares and pension benefits.
Apply for the categories and subcategories you will actually render services in. Operating outside your authorisation is a contravention, and applying for everything invites scrutiny you cannot support.
The key individual is central. A key individual manages or oversees the rendering of financial services and must personally meet the competence requirements, including the RE1 regulatory examination, and hold recognised qualifications for the categories. An applicant without a suitable key individual cannot be authorised.
Representatives are separate. Individuals who render financial services on behalf of the FSP are representatives, must be recorded on the FSP’s representative register, and must meet their own competence requirements including the RE5 examination. New representatives may work under supervision while completing them.
Debarment. An FSP must debar a representative who no longer meets the honesty and integrity requirement, and debarment is reported and public. Getting this process wrong exposes the FSP, and it has been the subject of considerable litigation.
Documents and Ownership Information Required
An FSP application is documentation-intensive and is assessed rather than processed.
- Completed FSP application through the FSCA’s system
- CIPC registration documents, company profile and memorandum of incorporation
- Certified identity documents for all directors, key individuals and shareholders
- Qualifications and regulatory examination results for each key individual
- Curricula vitae evidencing the required experience
- Police clearance and declarations for honesty and integrity assessment
- Latest financial statements, or opening balance sheet and projections for a new entity
- Proof of professional indemnity and fidelity insurance, where prescribed
- Business plan describing the services, products and target market
- Compliance and risk management documentation, and appointment of a compliance officer where required
- Operational documentation: record-keeping, complaints handling, business continuity and conflict of interest management
- Proof of payment of the prescribed fees
Tax, Licence and Compliance Requirements
Authorisation brings continuous obligations. An FSP must comply with the General Code of Conduct, maintain records for prescribed periods, submit statutory and compliance reports, maintain a complaints management framework, manage conflicts of interest under a documented policy, and keep its representative register current.
The General Code of Conduct is the substantive obligation. It governs disclosure to clients, suitability of advice, record of advice, product disclosure and how conflicts are handled. Most enforcement action against FSPs concerns Code breaches rather than authorisation failures.
Complaints go to the Ombud. Client complaints that are not resolved internally can be taken to the Ombud for Financial Services Providers (FAIS Ombud), whose determinations are binding and enforceable. That is a real exposure and it is why the record of advice matters.
Continuing professional development is required for key individuals and representatives, measured and recorded annually.
Changes must be notified — key individuals, directors, shareholding, business address, categories and the representative register. Failing to notify is itself a contravention.
The FSCA publishes a register of authorised FSPs, which clients can and increasingly do check. Being on it is a commercial asset.
Process, Deadlines and Ongoing Obligations
Get the key individual and the competence requirements in place before applying. Applications fail most often because the proposed key individual does not meet the qualification, examination or experience requirements for the categories sought.
Build the operational and compliance documentation genuinely rather than buying templates. The FSCA assesses operational ability, and a business that cannot demonstrate real systems is not authorised.
- Confirm which categories and subcategories you actually need
- Ensure the key individual meets qualification, RE1 and experience requirements first
- Build real operational, record-keeping and complaints systems before applying
- Obtain professional indemnity and fidelity cover where prescribed
- Appoint a compliance officer where the category or size requires one
- Read and implement the General Code of Conduct — it is where enforcement happens
- Keep the representative register current and handle debarment correctly
- Confirm current requirements, fees and forms with the FSCA
Frequently Asked Questions
Who needs FSP authorisation?
Anyone rendering financial advice or intermediary services in relation to financial products. Doing so without authorisation is a criminal offence.
What is a key individual?
The person who manages or oversees the rendering of financial services. They must meet the competence requirements personally, including the RE1 examination, and an applicant without a suitable key individual cannot be authorised.
What is the difference between a key individual and a representative?
A key individual manages and oversees; representatives render services on the FSP’s behalf. They write different regulatory examinations — RE1 and RE5 respectively.
Where do client complaints go?
Internally first, then to the FAIS Ombud if unresolved. Ombud determinations are binding and enforceable, which is why the record of advice matters.
Authorisation categories, fit and proper requirements, examinations and fees are set under the FAIS Act and by the FSCA and are amended. Confirm current requirements directly with the Financial Sector Conduct Authority.