The Minister of Finance has gazetted the levies that FSPs must pay to the FSCA for the 2024/25 financial year.
As Moonstone previously reported, the levies and fees payable by the entities supervised by the FSCA will increase by 6%.
Read: The FAIS Ombud has some good news for FSPs
The amendments to the schedules in the Financial Sector and Deposit Insurance Levies Act were published in Government Gazette No. 51117 of 23 August 2024.
The 6% increase means Category I and IV FSPs and Category I and IV FSPs that provide only Long-term Insurance Subcategory A products and/or Friendly Society Benefits pay a base levy of R3 816, up from R3 600.
The base levy for Category II, IIA, or III FSPs rises from R7 500 to R7 950.
The proposed 6% increase sees the levy for each rep and KI in Category I and IV and Category II, IIA and III rising from R520 to R551.20.
However, the rep and KI levy for Category I and IV FSPs that provide only Long-term Insurance Subcategory A products and/or Friendly Society Benefits remains at R250.
An FSP must calculate its total rep and KI levy by multiplying the levy by the average total number of KIs and the average total number of reps, calculated from 1 September of the preceding levy year to 31 August of the current levy year. Where a KI is also a rep, the person is counted once.
To calculate its total FSCA levy, a Category I and IV FSP must add the base amount to its total rep and KI levy.
A Category II, IIA, and III FSP must calculate its total FSCA levy by adding to the base amount its total rep and KI levy and the levy on the total value of investments under management or administration on 31 August of the levy year.
The percentage used to calculate the levy on investments under management or administration will increase by 6%, from 0.0018595% to 0.0019711%.
The cap on the maximum FSCA levy payable rises to R2.65 million for all categories of FSP.
An FSP that is authorised for more than one category is liable for a single levy calculated as follows:
- The highest basic amount that applies to the different categories for which the FSP is authorised.
- The average total number of KIs plus the average total number of reps, under the different categories, calculated from 1 September of the preceding levy year to 31 August of the levy year. KIs and reps who are approved or appointed under multiple categories are counted once.
- The total value of investments managed or administered on behalf of clients under the different categories on 31 August of the levy year. Investments under management or administration held in a foreign currency must be included at the exchange rate published in the press at that date.
- The highest maximum amount that applies to the different categories for which the FSP is authorised.
And add the other levies
The FSCA levy is only one component of the levies payable by FSPs and other entities regulated by the Authority.
They must also pay levies to the FAIS Ombud, the Financial Services Tribunal (FST), and the Ombud Council.
The FAIS Ombud has not increased its levy for 2024/25. This means the base levy payable by an FSP remains at R1 100 and the levy per representative and KI is R690. The cap on the maximum levy payable remains R333 275.
The FST levy is 2.5% of the FSCA levy (per Table C of Schedule 3 of the Financial Sector and Deposit Insurance Levies Act). In the case of entities regulated by both the Prudential Authority (PA) and the FSCA, the Tribunal levy is 2.5% of the sum of an entity’s PA levy and FSCA levy.
In addition, all entities that are required to pay levies to the FSCA must also pay levies to the Ombud Council. The amount of the levy payable to the Council is equal to a fixed percentage (2.5%) of the levy amounts payable to the FSCA (per Table D of Schedule 4).
Finally, entities regulated by the PA and the FSCA must pay a special levy for the first two levy years immediately following the date of the commencement of the Financial Sector and Deposit Insurance Levies Act, which was 1 April 2023.
An FSP’s special levy is 7.5% of its FSCA levy, FST levy, Ombud Council levy, and FAIS Ombud levy.
Hassle-free FSP levy calculator
Moonstone’s Paull Lawrence has devised a spreadsheet that takes the hassle out of calculating the levies you will pay in 2024/25. Category I and IV FSPs simply enter the average number of representatives and key individuals, while Category II, IIA and III FSPs enter that number and the value of funds under management on 31 August. The spreadsheet does all the calculations for you.
Click here to download the Excel spreadsheet.
