South Africa

Category II Discretionary Forex Service Provider License

overview

South Africa

The financial industry in South Africa is supervised by the Financial Service Board (FSB) of South Africa, as provided by the Financial Advisory and Intermediary Services Act 2002 (FAIS Act).

Companies that intend to conduct Forex business on a discretionary basis must apply for a Category II Discretionary Forex Service Provider (FSP) License from the FSB.

Based on the total gross premiums submitted by the auditor, a licensed FSP is going to pay an annual levy to the FSB.

Any company may apply for a FSP license, regardless whether they are registered in South Africa.

The application of license involves enormous amounts of paperwork and continuous liaising with FSB personnel.

An applicant must be presented locally in South Africa in order to undergo regulatory examinations and to attend verification procedures.

FSB will also closely investigate the proposed activities of the company, as well as the background of all appointed individuals and related entities.

To maintain adequate management and control of the business, the company is required to appoint a few Representatives, including a Key Individual and a Compliance Officer. These individuals must be registered with the FSB.

At least one of the Key Individuals must be a South African resident, to participate effectively in the management.

All Key Individuals and Representatives must pass the regulatory examinations that are held in South Africa.

Funds for initial capital and subsequent corporate needs must be deposited in a local bank.

The Compliance Officer is required to monitor your business operation constantly to ensure strict compliance to local laws, and to report the outcome to the FSB.

  • Time Frame: About 1 Year
  • Taxation: 28% (Corporate Income Tax), 18.6% (Capital Gain Tax)
  • License: Category II Discretionary Forex Service Provider License

For each Director, Shareholder and Ultimate Beneficial Owner:

  • Notarized / Certified True Copy of Passport
  • Notarized / Certified True Copy of second ID (for example National ID Card)
  • Notarized / Certified True Copy of Proof of Address
  • Notarized / Certified True Copy of Bank Statement
  • Notarized / Certified True Copy of University Diploma
  • Notarized Criminal Record
  • Bank Reference Letter
  • 2 Character Reference Letters issued by professionals
  • Detailed CV dated and signed by the applicant


For each Corporate Shareholders of the company:

  • Certificate of Incorporation
  • Memorandum of Association
  • Articles of associations
  • Articles of Incorporation
  • Register of Directors
  • Register of Shareholdings
  • Certificate of Good Standing (if the company is over a year old)
  • Signed and notarized application forms


Other Required Documents:

  • Liquidity Provider Agreement
  • Proof of Source of Wealth
  • Bank Reference Letter stating that the authorized person has an account that it is in good standing.
  • Copy of share certificates demonstrating the shareholding distribution.
  • Detailed business plan.
  • Manuals: Anti Money Laundering (AML) Policy, Security Policy and Procedures, as well as others if requested (will be prepared by Offshore Tech & Intermediary Services)
Company structure:
  • Minimum 1 Shareholder (natural or legal person)
  • Minimum 1 Director (natural or legal person)
  • A Representative
  • Minimum 1 (preferably 2) Key Individuals
  • A Compliance officer (Offshore Tech & Intermediary Services can appoint for you)
  • External auditors

Confidentiality:
  • Beneficial owners’ details – Can only be disclosed under court decision
  • Shareholders’ details – Not part of public record
  • Directors’ details – Not part of public record

Capital:
  • The FSB does not dictate a fixed level. The brokerage shall maintain current assets that are sufficient to meet current liabilities.

Taxation:
  • 28% (Corporate Income Tax)
  • 18.6% (Capital Gain Tax)

Accounting requirements:
  • Audited Financial Statements must be submitted annually

Others:
  • Registered office – Required
  • Local employees – Required (Key Individual)
  • Regulatory examinations (for Key Individual(s) and Representative(s)) – Required
  • Professional Indemnity (PI) Insurance Cover – Required (ZAR 5 million (approximately USD 310,000))
  • Legal Framework: Financial Advisory and Intermediary Services Act 2002 (FAIS Act)
  • Regulatory Authority: Financial Service Board (FSB) of South Africa
  • Capital Requirement: The FSB does not dictate a fixed level. The brokerage shall maintain current assets that are sufficient to meet current liabilities.

Permitted Activities:
  • As outlined in the Financial Advisory and Intermediary Services Act 2002 (FAIS Act) of South Africa, licensees are allowed to engage in forex trading and trading of derivative instruments (securities, futures, options, contract for differences etc).
  1. Compilation and preparation of all of the documents, including due diligence documents.

  2. Prepare a reasonable amount of capital.

  3. Preparation of Business Plan and Corporate Manuals (such as Anti-Money Laundering (AML) Policy) by Offshore Tech & Intermediary Services.

  4. Submission of the due diligence documents and other related documents to the FSB.

  5. Account opening in a local Bank for the deposit of capital. All the bank forms, corporate documents and due diligence documents will be gathered and submitted by Offshore Tech & Intermediary Services.

  6. Ad-hoc support and provision of minor documents required during the process.

  7. Assistance with depositing funds at a local bank account in order to satisfy capital requirements for the FSB.

  8. We will deliver all relevant to you once the license is issued by FSB.
FREE CONSULTATION:​
experience on your own

Let's have a cuppa!​​

Eager to know more? Get in touch with us.​