FSCA Calls for Submission Of Information From CASPs by 15 February 2023
The Financial Sector Conduct Authority (“FSCA”) has recently released “FSCA Information Request 7 of 2022 (FAIS) - Crypto Asset Related Activities Performed by Crypto Asset Financial Services Providers” on 13 December 2022 (“Information Request”), signalling that it is moving ahead in its approach to establish a licensing and regulatory framework applicable to persons rendering financial services in relation to Crypto Assets (“Crypto Asset FSPs”).
The release of the Information Request comes in the wake of the highly anticipated publication of the FSCA’s Declaration of Crypto Assets as financial products under the Financial Advisory and Intermediary Services Act, No. 37 of 2002 (“FAIS Act”) on 19 October 2022 (“Declaration”). As a result, any person who, as a regular feature of the business of such person, renders a financial service in relation to Crypto Assets without a licence or authorisation will be in contravention of section 7(1) of the FAIS Act, unless such person is exempted.
Alongside the Declaration, the FSCA also released FSCA FAIS Notice 90 of 2022, providing certain exemptions to Crypto Asset FSPs from section 7(1) of the FAIS Act, insofar as relates to the rendering of a financial service in relation to Crypto Assets. The exemption provided to Crypto Asset FSP’s under FAIS Notice 90 of 2022, is subject to certain conditions, including, amongst others, the obligation to furnish the FSCA with any information that is in the possession, or under the control of, such person, that is relevant to the financial services and/or similar activities rendered, upon the FSCA’s request.
The FSCA has now established the requirement to meet this condition with the release of the Information Request, which sets a deadline for Crypto Asset FSPs – namely, any person that is required to be licensed under section 8 of the FAIS Act to render a financial service in relation to Crypto Assets and currently renders a financial service under the exemption, to furnish the FSCA with the requested information by completing Annexure A attached thereto, in full for submission in word format to the FSCA via email at Keith.Sabilika@fsca.co.za by no later than Wednesday, 15 February 2023. The Information Request and accompanying “Annexure A” to be completed by Crypto Asset FSP’s, is available on the FSCA’s website at www.fsca.co.za.
The FSCA has warned that failure to provide the FSCA with the requisite information by or within the timeframe specified, will constitute non-compliance with the condition contained in paragraph 3(2) of the FAIS Notice 90 of 2022. In fact, failure to adhere to any of the conditions stipulated in the aforesaid notice will automatically result in the revocation of the exemption for that person. Persons that persist in rendering financial services after the exemption has been revoked, will be in contravention of section 7(1) of the FAIS Act.
Hanekom Attorneys is fully committed to assist Crypto Asset FSPs in navigating this evolving regulatory terrain, with the view to ensure the continued alignment of our client’s business operations with current and developing FinTech regulatory requirements.
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