FINANCIAL SOUNDNESS REQUIREMENTS FOR JURISTIC REPRESENTATIVES

The financial soundness requirements relating to juristic representatives, as set out in Board Notice 194 of 2017 (BN 194), will take effect on 1 March 2019.

In summary, the following requirements will apply:

1. Juristic representatives of a Category I FSP that does not hold, control or have access to client assets or that does not collect, hold or receive premiums or other monies in respect of a financial product:

  • assets must at all times exceed liabilities;
  • must at all times maintain financial resources that are adequate to carry out activities and supervisory arrangements and to ensure that liabilities are met as they fall due.

2. Juristic representatives of a Category I FSP that either hold, controls or has access to client assets or that collects, holds or receives premiums or other monies in respect of a financial product, and juristic representatives of a Category II, IIA FSPs

  • assets must at all times exceed liabilities; 
  • must at all times maintain financial resources that are adequate to carry out their activities and supervisory arrangements and to ensure that their liabilities are met as they fall due;
  • must at all times comply with additional asset requirements, working capital requirements and liquidity requirements referred to in Table B of BN 194;
  • must comply with additional reporting requirements to the Financial Sector Conduct Authority (submission of Form A) on a half-yearly or annual basis, as prescribed in BN 194;
  • must comply with important early warning requirements.

The early warning notification by juristic representatives must be made to the FSP of the juristic representatives.

A person appointed as a juristic representative under more than one category of FSP must comply with the most onerous of the financial soundness requirements applicable to the different categories of FSPs for which that person is appointed.

A copy of the finanacial soundness requirements can be downloaded
here.


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