CFD and forex providers dealing with South African clients hold both the FAIS licence and the separate OTC derivative provider authorisation, and the firm runs the two applications in parallel.
Selected engagements from more than 250 licences obtained since 2013, for payment, e-money, cryptoasset and consumer credit firms.
Volkswagen
Payment InstitutionObtained Nexpay’s FCA Authorised Payment Institution licence.
Electronic Money InstitutionObtained Dzing Finance’s FCA Authorised Electronic Money Institution licence.
Obtained Orbital’s FCA Authorised Payment Institution licence.
Our realistic timeline from submission, set against the regulator’s own published figures.
Client money and liquidity provider accounts arranged alongside the application, so you trade on authorisation.
Candidates introduced for senior managers and a compliance officer, each assessed against the regulator’s standard.
A reply within three business hours and a written proposal the same day: the licence, the requirements, the cost and the timing.
You will need a senior manager for each licence category, with a recognised qualification, the RE 1 exam and a year’s management experience, and a compliance officer.
One engagement and one timetable, from scoping to launch. Speak to an expert about the people, the banking and the technology for this licence.
The regulator’s requirements, capital, timing, fees and the questions firms ask, from the regulator’s own publications.
Any person who, as a regular feature of business, gives advice on or renders intermediary services in respect of financial products to clients in South Africa needs an FSP licence under the FAIS Act. Brokers, advisers, discretionary managers and administrators apply in the category matching their service. A provider that originates, issues or sells over-the-counter derivatives as principal, or makes a market in them, is an over-the-counter derivative provider under the Financial Markets Act Regulations 2018 and may not act, or hold itself out, as one unless the FSCA has authorised it. A CFD or forex provider dealing as principal therefore holds both a FAIS licence and the ODP authorisation, and the firm obtains both.
| Category | Service | Application fee | Financial soundness |
|---|---|---|---|
| Category I | Advice and intermediary services, by product sub-category including derivative instruments | R2,544 | Assets exceed liabilities; current assets exceed current liabilities; liquid assets 4/52 of annual expenditure where client money is held |
| Category II | Discretionary financial services provider | R15,390 | Liquid assets 8/52 of annual expenditure |
| Category IIA | Hedge fund financial services provider | R15,390 | Assets exceed liabilities by R3 million; liquid assets 13/52 of annual expenditure |
| Category III | Administrative financial services provider | R46,241 | Assets exceed liabilities by R3 million; liquid assets 13/52 of annual expenditure |
| Category IV | Assistance business | R2,544 | Assets exceed liabilities |
Product sub-categories, including derivative instruments, are selected on Form FSP2. A 10% fee discount applies to Categories I, II, IIA and IV, and 20% to Category III, where the application is additional to an existing licence.
| Requirement | Amount |
|---|---|
| Category I, holding no client money | Assets exceed liabilities |
| Category I, holding client money | Assets exceed liabilities; current assets exceed current liabilities; liquid assets at least 4/52 of annual expenditure |
| Category II | Liquid assets at least 8/52 of annual expenditure |
| Categories IIA and III | Assets exceed liabilities by at least R3 million; liquid assets at least 13/52 of annual expenditure |
| Early warning | Notification to the FSCA when within 10% of a minimum |
| ODP capital | Set under the ODP authorisation criteria (Board Notice 90 of 2018) |
The FAIS financial soundness tests are in Chapter 6 of Board Notice 194 of 2017. The capital criteria for a non-bank ODP are set separately, in Board Notice 90 of 2018.
| Figure | Value | Source |
|---|---|---|
| Statutory decision period | No statutory period for a FAIS licence or an ODP authorisation | Financial Advisory and Intermediary Services Act 37 of 2002; Financial Markets Act 19 of 2012, section 6(8) |
| Application preparation | 6 to 8 weeks | From instruction to submission, including banking in parallel |
| Our realistic timeline | 4 to 6 months after submission | The firm’s own figure, from the regulator’s published data and its own applications |
Figures published by the regulator are quoted as published and converted to months. The realistic timeline is the firm’s own, for a complete, well-prepared application.
| Item | Amount | Notes |
|---|---|---|
| Application fee, Categories I and IV | R2,544 | Determination of fees payable to the Registrar of FSPs, 2018 |
| Application fee, Categories II and IIA | R15,390 | Same determination |
| Application fee, Category III | R46,241 | Same determination |
| Key individual approval | R1,377 | Per application |
| Additional licence discount | 10% or 20% | 10% for Categories I, II, IIA and IV; 20% for Category III |
| Annual levies | Set by FSCA levy notice | Amounts published annually by the FSCA |
| ODP authorisation fee | Set by the FSCA | Not set in the FAIS fee determination |
| Professional fees | Fixed, in writing | Quoted after scoping |
The Financial Markets Act Regulations 2018 define an over-the-counter derivative provider as a person who, as a regular feature of business and transacting as principal, originates, issues or sells OTC derivatives, or makes a market in them. Such a person may not act or hold itself out as an ODP unless authorised by the FSCA under section 6(8) of the Act, and once authorised is a regulated person under section 5(1)(b).
The FAIS licence covers financial services rendered to clients in South Africa, and the ODP authorisation covers OTC derivative dealing as principal with South African counterparties. Neither gives rights in other markets: a group serving the United Kingdom or the European Union holds the FCA authorisation or an EU authorisation for those clients. Whether a South African entity or branch is required for a given model is agreed with the FSCA before filing.
The FSCA publishes no list of reasons for delay. From the licensing conditions, the Authority looks for the following before it authorises.
A dealing firm needs client money accounts separated from its own funds, operating accounts in its base currency and settlement accounts in the currencies it quotes, together with onboarding at one or more liquidity providers or prime brokers before the first trade. Each institution reviews the licence, the financial crime framework and the flow of funds before opening an account. The firm arranges the accounts and the liquidity provider onboarding alongside the application, so the firm trades on authorisation. See banking and payment processing.
Both, where it deals as principal with South African clients: a FAIS licence covering derivative instruments and the ODP authorisation under section 6(8) of the Financial Markets Act.
R2,544 for Category I or IV, R15,390 for Category II or IIA and R46,241 for Category III, plus R1,377 for each key individual. Annual levies are set by FSCA levy notice.
Assets exceeding liabilities for a Category I provider holding no client money; otherwise liquid assets of 4/52 of annual expenditure for Category I, 8/52 for Category II and 13/52 with a R3 million surplus for Categories IIA and III.
A person with a recognised qualification, the RE 1 examination (RE 3 as well for Category II), at least one year’s experience managing or overseeing the services, and class of business training before taking oversight.
There is no statutory period. The firm plans for four to six months after submission for the FAIS licence, with the ODP authorisation run in parallel.
A regulatory advisory firm to payment, e-money and cryptoasset companies since 2013, with more than 250 licences obtained in more than 60 countries. The firm advises on authorisation, compliance, safeguarding, banking and transactions, and builds the white-label payment and card technology its clients launch on.
A written proposal on cost, timing and requirements, the same day: speak to an expert.
This guide is general information for firms considering authorisation and is reviewed against the regulator’s published requirements. It is not legal advice; requirements and fees change, and the regulator’s current publications take precedence.
The requirements, the cost and the timing for your business, in a written proposal the same day.