South Africa CAT1 + CAT2 CASP/VASP License

A-Z solution for South Africa CASP license

1. Key Individual (KI) Requirements

Under FAIS, every licensed Financial Services Provider (FSP) must appoint a Key Individual (KI) who meets the Fit and Proper requirements. These include relevant qualifications, regulatory experience, and the successful completion of the RE5, RE1 or RE3 regulatory examination and having completed the relevant Class of Business, which is mandatory for Key Individuals. The KI is ultimately responsible for the oversight and management of the FSP’s activities. While a foreigner may apply, in practice the FSCA expects that the KI must be able to exercise effective management and oversight locally, meaning in addition to the requirement for being a KI they need to prove how they will have operational ability.

2. Compliance Officer Requirement
Given the model being discussed (exchange, remittance, and potential derivatives), a Compliance Officer will also be required.

The business is not operating as a sole proprietor. A Compliance Officer is not required if it's a Sole Proprietor only, in that case the FSCA would expect them to be handling the application directly, so they would not be operating as a Pty Ltd Company.
The FSCA requires independent monitoring and reporting on compliance with the FAIS Act if it is not a sole proprietor.
The Compliance Officer ensures proper implementation of AML obligations, Treating Customers Fairly (TCF) principles, and adherence to FIC reporting standards.

3. Clarification of FSP Categories
To ensure there is a clear understanding, please note the following:

Category I Subcategory 1.27 (Crypto Assets): This covers the rendering of financial services relating to crypto assets, as declared a financial product by the FSCA in 2022. This is the category relevant to your proposed crypto exchange/remittance model.
Category I Subcategory 1.13 (Derivatives): This covers the rendering of financial services relating to derivative instruments, including CFDs, futures, and options. This would apply only if your business model expands into derivative products, we can include derivatives in the initial application.
Category II (Discretionary FSP): This allows the provider to exercise discretionary authority over client funds or portfolios. It involves a much more complex application and significantly longer approval timelines compared to Category I.

4. Application Staging and Costs
At this stage, the application fee will apply to Category I only, specifically for crypto assets (1.1.27). If at a later point you wish to expand into Category II (Discretionary), this can be done in stages. Our appointed KI is qualified for Category II, so this route remains open in the future, though you should note that Category II applications take considerably longer to process.

5. Policies and Documentation
The drafting of the necessary policies and procedures (FAIS compliance manual, AML/KYC framework, risk management policy, governance structures, etc.) is included in the cost amount for the initial application. This ensures that the application submitted to the FSCA is fully compliant and ready for review.