Extension of Exemptions relating to Private Equity Funds

The Financial Sector Conduct Authority (FSCA) recently released FSCA FAIS Notice 32 of 2023, which extends several exemptions pertaining to Private Equity Funds. These exemptions, which were originally set to expire on the 30th of June 2023, have now been prolonged until the 30th of June 2026. Notice 32 of 2023 comes into operation on the 1st of July 2023.

These exemptions include:
• Exemption for Financial Service Providers (FSPs) Dealing with Private Equity Funds
• Exemption for FSPs Dealing with Private Equity Funds from Section 13(1)(c) of the FAIS Act
• Exemption for Certain Juristic Representatives from Liquidity Requirements

Considering that these exemptions are nothing new, we will only provide you with a basic overview of such. 

Exemption for Financial Service Providers (FSPs) Dealing with Private Equity Funds

The exemption for Category II FSPs dealing with Private Equity Funds solely applies to older mandates concluded before the 13th of December 2012. This exemption entails that, for discretionary investment mandates entered into before the aforementioned date, there is no obligation to include a general statement addressing risks associated with investing in local and foreign financial products, including currency risks. 

However, investors must have been informed in writing about these risks within six months of the publication of Board Notice 208 of 2012 (i.e., by the 13th of June 2013). 
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This exemption also states that a Category II FSP is exempt from meeting the liquidity requirement set out in the Determination of Fit and Proper Requirements of section 48(2) until 30 June 2026, on the condition that it only manages private equity funds.

Exemption for FSPs Dealing with Private Equity Funds from Section 13(1)(c) of the FAIS Act

Category II FSPs that provide financial services to private equity funds are also exempted from section 13(1)(c) of the FAIS Act, which prohibits individuals from offering financial services or entering into contracts related to financial services except in the name of the FSP they represent. 

Exemption for Certain Juristic Representatives from Liquidity Requirements

Juristic representatives of Category II FSPs that exclusively provide financial services to private equity funds are exempted from complying with the liquidity requirements outlined in sections 48(2) and 48(4) of the Determination of Fit and Proper Requirements.