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Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002)

Determination of Fit and Proper Requirements for Financial Services Providers, 2008

Part IX Financial Soundness

 

 

9.
1) An FSP must not be an unrehabilitated insolvent or under liquidation or in provisional liquidation.

 

2) An FSP in respect of category I that does not hold client assets or receive premiums or money must comply with the following requirement, namely, that the assets of the FSP (excluding goodwill, other intangible assets and investments in related parties) must at all times exceed the FSP's liabilities (excluding loans validly subordinated in favour of all other creditors).

 

3) An FSP in respect of Category I that holds client assets or receive premiums or money must at all times comply with the following requirements:
a) The assets of the FSP (excludinq goodwill, other intangible assets and investments in related parties) must exceed the FSP's liabilities (excluding loans validly subordinated in favour of all other creditors);
b) the FSP must maintain current assets which are at least sufficient to meet current liabilities; and
c) the FSP shall at all times maintain liquid assets equal to or greater than 4/52 weeks of annual expenditure.

 

4) An FSP in respect of Category II must at all times comply with the following requirements:
a) The assets of the FSP (excluding goodwill, other intangible assets and investments in related parties) must exceed the FSP's liabilities (excluding loans validly subordinated in favour of all other creditors);
b) the FSP must maintain current assets which are at least sufficient to meet current liabilities; and
c) the FSP shall at all times maintain liquid assets equal to or greater than 8/52 weeks of annual expenditure.

 

5) An FSP in respect of Categories IIA and III must at all times comply with the following requirements:
a) The assets of the FSP (excluding goodwill, other intangible assets and investments in related parties) must exceed the FSP's liabilities (excluding loans validly subordinated in favour of all other creditors) by at least R3 million;
b) the FSP must maintain current assets which are at least sufficient to meet current liabilities; and
c) the FSP shall at all times maintain liquid assets equal to or greater than 13/52 weeks of annual expenditure.