We've recently attempted to register a number or Juristic Representatives in terms of the FAIS Act for our clients and were met with a rather peculiar situation. Previously, after we conducted a Due Diligence and all parties signed the necessary agreements one needed to merely add the JR on the register via the FSCA E-portal.
Much to our own surprise, it seems like this function is no longer available on the online system. When we phoned the FSCA we were told: "We no longer do it that way - you have to send it in for review.". Interesting.
There seems to have been no communication to anyone that this would change beforehand. And this seems to be a trend with the FSCA in terms of their licensing departments not communicating changes to their own stakeholders. As a further example of this we see many different kinds of documents being asked of FSP's without informing them beforehand so they can get them ready. There also does not seem to be an even playing field regarding this as the items they ask for can differ in substance and form.
When asked if they can perhaps publish these new requirements beforehand we are always met with the same answer: "in terms of Section 8(2) of the FAIS Act, The Authority may require an applicant to furnish such additional information, or require such information to be verified, as the Authority may deem necessary."
I am just taking an educated guess and that is the main problem here - if you do not communicate, people guess and speculate.
Now, in my opinion I do not think this section means you can just make up random requirements or nit-pick with regards to headings and file formats (we were recently asked to provide a statement of financial position in three different formats by three different analysts in three different license applications - there seems to be no internal communication or alignment about what is indeed required). In one recent case they asked for a Tax Clearance certificate - but for no other applications have I ever seen this in 10+ years of applications.
My friendly suggestion to the FSCA would be this: Decide on your formats, communicate it to everyone beforehand and be consistent in the application of your rules - you will have a much smoother process with happier stakeholders.
So what do the online cancellation of JR registrations mean? Maybe that they want to review the applications and maybe scrutinize it more closely, I suppose. It certainly means it will take longer than it did in the past. It could also be in preparation for COFI. I am just taking an educated guess and that is the main problem here - if you do not communicate, people guess and speculate. But, that being said - communication about these things still seems to be a problem and can be hugely improved.
We'll keep you posted on developments.
by: Horizon Compliance team