What Exemptions are Allowed?

Posted on by

Exemptions have become an integral part of our regulated environment. A recent response by the FSB to such a request provides very useful insight into the process.

There are only two grounds on which an exemption can be considered.

Firstly, where a specific legislative requirement cannot be met. For example, you have run into a temporary, unavoidable cash flow situation and are unable to meet the liquidity requirements.

Secondly, where a specific legislative requirement cannot be met in terms of the timeframe provided for in the legislation. Here we think of someone unable to write the regulatory exam due to a restrictive, temporary health condition.

If you feel that you have a case in requesting an exemption from a legislative requirement based on the above, the following procedure is prescribed:

  1. The application must be addressed to the Registrar of Financial Services Providers. There is no formal application form, so a letter will suffice.
  2. The request, and the motivation for the request, must be provided in detail. An explanation of what requirement cannot be met, including the reason why and what will be done to meet this requirement, as well as the timeframe in which it will be met.
  3. All supporting documentation must be provided. If a medical condition was diagnosed preventing the FSP from complying with a requirement, then a copy of a letter from the physician / doctor / specialist confirming the condition, and the date diagnosed, is required, as well as any other supporting documentation that may be relevant.
  4. The fee for an exemption application is R5 200. Usually this fee must be paid up-front and evidence of this payment must be included in the application.
  5. Where an applicant cannot afford to pay this application fee, the applicant must also specifically request an exemption from the application fee (so that it is clear that the individual cannot pay the fee and that it was not just an oversight). The applicant must attach a copy of his/her bank statements if the applicant cannot pay the fee.
  6. The fully completed application must be submitted via e-mail / courier / hand delivered to Levina.baleh@fsb.co.za. It is not advisable to fax the application.
  7. When Levina receives the application, she will confirm receipt and also request any additional documentation she may require. She will also open a case with a case number for the application and scan all the documents so that an electronic record is created for the case.
  8. This case is then forwarded to our FAIS Legal Advisor who reviews the application, and then makes a recommendation to the Registrar. The Registrar makes the final decision and thereafter the applicant is notified formally in a letter of the outcome of the application.
  9. Should the application be declined, reasons will be provided in the response.
  10. Where the application is approved, the specific conditions of the approval will also be explained in the letter. All approved applications for exemptions are published in the Gazette.

We recently commented on a number of such exemptions which were published in the government Gazette. These included extensions of the final date for the regulatory exams, liquidity requirements and even one where the applicant was exempted from paying the R5 200 for applying for an exemption!