Licensing Requirements of a Building Society
- Any building society applying for a license to carry on the business of a building society shall submit the following information and or adhere to the following procedure:
- Proof of payment of the registration/license fees:
- Non-refundable application fee of E2 000.00.
- Branch fee of E500.00.
- Initial registration fee of E5 000.00
- A license fee of ten thousand Emalangeni (E 10,000-00) payable to the FSRA upon approval;
- A resolution of the board of directors of the building society endorsing the decision to apply for a license;
- Registration certificate and Rules in terms of The Building Societies Act, 1962;
- Duly completed “Fit and Proper” forms with names, addresses, occupations of persons who hold significant shareholdings (10% or more of total capital) directly or indirectly in the society and the respective values of such holdings;
- Duly completed “Fit and Proper” forms with particulars of the executive management and members of the board of directors of the said building society including their background, and particulars of other business concerns under their control or management;
- Copies of the latest audited financial statements for the past three years for an already existing building society;
- A feasibility study report including a business plan and financial projections for the first three years and intended areas of specialisation for a new building society;
- Management information system processes including the software required for operation, characteristics of products and services to be provided to subscribers, risk management policies as well as the proposed security and control measures aimed at preventing misuse or improper management of information;
- Overview of operations including the description of systems and the design of the data collection including the unique identification system for individuals and enterprises;
- A prototype or specimen that demonstrate the principal features and functions of the system including customer statements layout;
- A description of the applicant’s proposed premises and the security measures to be adopted;
- The proposed fee structure which shall entail a complete cost of credit including the Annual Percentage Rate; and
- Such other particulars as the Authority may require.
Licensing Requirements for A Credit Bureau
- Pursuant to Section 37 of the FSRA Act, 2010 read together with Section 66 of the Consumer Credit Act 2016 (as amended), an application lodged to the Registrar shall be accompanied by the following supporting documents and information:
- a completed application form as prescribed by the Authority;
- a certificate of compliance certifying that all the licensing requirements have been complied with.
- certified copies of the applicant’s documents of registration, including the certificate of incorporation, Memorandum and Articles of Association, By-Laws, Constitution and Rules.
- proof of a minimum paid up capital as may be determined by the Authority from time to time.
- Proof of payment of the prescribed non-refundable application fee as may be determined by the Authority from time to time;
- a feasibility study by an applicant that shows the business plan, organizational structure and internal monitoring procedures of the company as well as a market analysis;
- Ownership structure;
- Governance structure;
- Management structure;
- financial projections for at least the next three (3) years;
- a business continuity plan;
- a Fit and Proper Test Form by the proposed directors, senior officers, and significant shareholders in the prescribed form;
- documentary evidence regarding the management processes, including the —
- developed software or development schedule of the software required for the operations of the credit bureau;
- characteristics of the products and services intended to be provided to users;
- proposed policies and procedure manuals;
- proposed security and control measures aimed at preventing misuse or improper management of data subject information;
- Operational manuals designed to ensure accuracy of data contained in the database and its update including modules for:
- Carrying out queries;
- loading of data;
- source quality control;
- maintenance;
- security; and
- procedure for handling complaints.
- a description of the applicant’s proposed premises and the security measures to be adopted;
- information related to material outsourcing services where applicable together with information on service providers;
- the proposed fees and costs structure of service to be delivered; and
- any other information as the Authority considers necessary or may, from time to time, require.
- Where the applicant is owned by a foreign company or corporate body regulated in a foreign jurisdiction, the applicant shall, in addition to the requirements as set out above be accompanied by-
- written confirmation by the home supervisory authority that the applicant is authorized to carry on the types of financial services proposed; and
- information from the home supervisory authority that the applicant is solvent and meets all the regulatory requirements in the home jurisdiction.
- certified copies of the applicant’s documents of registration, including its certificate of incorporation or, similar documents regulating its affairs or such other documents as the Authority may require establishing the manner of control and regulation of the applicant; and
- audited financial statements in respect of the foreign company or body corporate for 3 years preceding the date of application.
Licensing Requirements For A Credit Provider
- Pursuant to Section 37 of the FSRA Act, 2010 read together with Section 63 of the Consumer Credit Act 2016 (as amended), an applicant for a license shall be required to attach the following documents:
- Documents in proof of incorporation of the company, including the shareholding structure;
- Current tax clearance certificate;
- Notification of the institution’s registered head office and branches, if any;
- Copies of key operational policies;
- Copies of the financial statements for the last three years, if already in business;
- Information on capital and sources of funds;
- Business plan and Feasibility study, if it is a new company in the business of credit financing;
- Description of Management Information System processes
- Overview of operations;
- Prototype or Specimen demonstrating principal features and functions of Institution’s system (i.e. customer statement);
- Fees Structure (i.e. breakdown of cost of credit);
- Proof of minimum capital requirement of E 50, 000 (fifty thousand Emalangeni) for a new credit provider or:
- core capital of not less than 10% (ten percent) of total assets; and
- institutional capital of not less than 8% (eight percent) of total assets.
Licensing Requirements for SACCOs
- SACCOs License Application
- In order to allow new co-operatives, the opportunity to develop themselves to the point where they can meet the minimum requirements to be licensed as a SACCO, the FSRA does not require such co-operatives to hold a license from the FSRA, provided they each have less than 10 members and total assets less than E 100,000.00. Co-operatives in this category should advise the FSRA of their existence and provide evidence regarding number of members and size of total assets.
- The FSRA accepts license applications from registered co-operatives that propose to provide financial services. Each applicant co-operative should submit the prescribed application (Form A) with the payment of E1500.00 (E 1000.00 being the application fee and E 500.00 being the license fee).
- A co-operative applying for a license should attach the following documents to the application form:
- board resolution to apply for a license.
- a certified copy of registration certificate issued under the Co-operative Societies Act, 2003 (Co-operative Societies Act);
- certified copy of the co-operative’s by-laws.
- key internal policy documents covering the following topics: board charter, management of conflicts of interest, restrictions on transactions with related parties, risk management, credit/ loans, loan loss provisioning, concentration risk/large exposures, capital adequacy, savings, investment, liquidity, anti-money laundering and prevention of terrorist financing, business continuity (including disaster recovery) plan.
- an outline of the proposed organizational structure, including the names, and responsibilities of proposed senior management.
- business profile and plan including a brief history of the applicant and an outline of any existing activities (which would not be financial services as these are not permitted without a license); description of ownership rules/structure; financial projections; capital (classes of shares, etc.).
- details of proposed information and accounting systems (including any outsourcing of data processing and other back-office functions) and evidence that, from the commencement of operations, information and other systems will be capable of producing all required statutory and prudential returns in an accurate and timely manner; and
- any other documents that the FSRA may require from the Applicant.
Fit and Proper Test Application
- The FSRA Act requires the FSRA to ensure that the controllers of each SACCO are fit and proper. Therefore, all board members and senior management are required to meet the fit and proper tests specified in Guideline 3 on Governance.
- Accordingly, all Board members and senior management are required to complete and submit with the license application the “Form B: Fit and Proper Test Form”
