From CompliNEWS | Financial Service Intelligence Watch

FSCA General Notice 1 of 2024: Determination of new regulatory fees effective 1 October 2024

In FSCA Communication 36 of 2024, the Financial Sector Conduct Authority (FSCA) has announced the publication of General Notice 1 of 2024, detailing the determination of fees charged by the Authority. This communication outlines the process undertaken, including public consultation and parliamentary review, leading to the finalisation of the fees structure.

The communication aims to inform industry stakeholders about the official publication of the FSCA General Notice 1 of 2024, which finalises the determination of fees charged by the FSCA.

On 19 September 2023, the FSCA released a notice along with accompanying documents for public consultation, outlining the proposed budget, estimates of expenditure, and levies and fees. Stakeholders were invited to submit comments by 2 November 2023.

Stakeholder Feedback

The FSCA received 94 comments from 17 industry stakeholders. These comments were considered in a thorough consultation process. The individual comments, responses, and overall consultation process are documented in the Consultation Report (Annexure A). No significant concerns were raised that required a change in the proposed approach.

Parliamentary Submission

Following the consultation, the FSCA submitted the final budget, expenditure estimates, and fee proposals to Parliament, as mandated by section 103 of the Financial Sector Regulation Act, 2017 (FSR Act).

Publication of the Final Notice

After completing the processes required under Chapter 7 of the FSR Act, the FSCA has officially published General Notice 1 of 2024, which sets out the final determination of fees charged by the FSCA.

The Financial Sector Conduct Authority (FSCA) published General Notice 1 of 2024, outlining a comprehensive schedule of fees applicable to financial institutions under several key pieces of legislation. This notice, effective from 1 October 2024, details the costs associated with various regulatory functions performed by the FSCA across multiple financial sectors. The notice applies to financial institutions regulated by the following Acts:

 

  • Collective Investment Schemes Control Act, 2002 (CISCA): Governing collective investment schemes, this Act sets out the rules and fees for entities managing these schemes, including registration fees and charges for additional portfolios or scheme amendments.
  • Credit Rating Services Act, 2012: Entities providing credit rating services are required to pay fees related to registration, amendments, and exemptions.
  • Financial Advisory and Intermediary Services Act, 2002 (FAIS): This covers financial service providers (FSPs) and details fees for the authorisation andapproval of FSPs across various categories (e.g., Category I, II, IIA, III, IV), the approval of key individuals, and exemption applications.
  • Financial Markets Act, 2012: Fees under this Act cover applications for market infrastructure licenses, such as exchanges and central securities depositories, and the approval of over-the-counter (OTC) derivative providers.
  • Financial Sector Levies Act, 2022: This Act introduces levies for financial institutions to fund the regulatory activities of the FSCA and other financial regulatory bodies. Entities may apply for exemptions from these levies under specific circumstances.
  • Financial Sector Regulation Act, 2017 (FSRA): The Act provides the overarching regulatory framework for the financial sector, including licensing fees, applications for significant owners, and exemption requests.
  • Long-term Insurance Act, 1998 and Short-term Insurance Act, 1998: Insurance companies must pay fees for applications related to services rendered in respect of insurance policies, approval of binder fees, and exemptions from certain regulatory provisions.
  • Pension Funds Act, 1956: This Act governs pension funds and the fees that are applicable for registration, consolidation of financial statements, exemption applications, and services rendered by the Authority related to pension fund activities.
  • Friendly Societies Act, 1956: Fees under this Act cover the registration of friendly societies, amendments to society rules, and other administrative functions.

 

Key Features of the Notice

Interpretation: The notice defines key terms and explains how the various Acts interact with each other. For instance, the ‘Authority’ refers to the FSCA as established under the Financial Sector Regulation Act, 2017.

Determination of Fees:

The fees applicable are listed in a detailed Table of Fees, divided into two columns:

 

  • Column A: Specifies the functions or regulatory services provided by the FSCA, such as licensing, exemption applications, and other administrative tasks.
  • Column B: Specifies the corresponding fees for each function. For example, the registration of a pension fund incurs a fee of R1 304, while applications forauthorisation as a Category II Financial Services Provider (FSP) incur a fee of R16 ,313.

 

Licensing and Registration:

The notice outlines fees for the registration of entities across various financial sectors. This includes applications for the authorisation of FSPs under FAIS, collective investment schemes under CISCA, and credit rating agencies under the Credit Rating Services Act.

Exemptions and Extensions:

The FSCA charges fees for applications related to exemptions from certain regulatory requirements, such as asset spreading exemptions under the Pension Funds Act or regulatory examination exemptions under FAIS.

Miscellaneous Fees:

The notice also includes fees for additional services such as requesting copies of documents, certificates, or regulatory reports, as well as changes to the names of entities or amendments to terms and conditions of licences.

Special Discounts:

Discounts are available under specific conditions. For instance, a 10% discount applies to applications for multiple FSP authorisations (Category I to IV), and a 20% discount is available for Category IV FSP applications when the applicant is already licensed for other financial products or services.

Repeal of Previous Notices

This notice repeals earlier notices across several Acts, including:

  • Friendly Societies Act (Notice R239 of 17 March 2006)
  • Pension Funds Act (Notice R73 of 4 February 2009)
  • Insurance Acts (Long-term and Short-term Insurance Notices from 2018)
  • Financial Markets Act (Board Notice 137 of 2015)
  • Credit Rating Services Act (Notice 137 of 2015)
  • FAIS Act (Notice 89 of 9 February 2018).

Implementation

The new fee structure under General Notice 1 of 2024 comes into effect on 1 October 2024, and all financial institutions falling under the regulatory scope of the FSCA must comply with these fees for any licensing, registration, or administrative services.