REMINDER OF FINANCIAL SOUNDNESS EARLY WARNING REQUIREMENTS
Chapter 6 of the FAIS Fit and Proper Requirements, 2017, (Fit and Proper Requirements) contains the financial soundness requirements applicable to all Financial Services Providers (FSPs) and their juristic representatives.
Category I FSPs that hold, control, or have access to client assets, or collect premiums, as well as Category II, IIA, III and IV FSPs, and their juristic representatives, must comply with the Early Warning Requirements.
To comply with the Early Warning Requirements, the affected FSP or juristic representative must provide written notification to the Regulator or the FSP, as the case may be, if:
Its assets exceed its liabilities by less than 10%;
Its current assets exceed its current liabilities by less than 10%;
If applicable, its additional assets exceed the required amount by less than 10%;
It does not meet any of the financial soundness requirements in Chapter 6 of the Fit and Proper Requirements;
It becomes aware of any situation which may result in one of the above scenarios.
During this time, the affected FSP or juristic representative may not directly or indirectly make any payment by way of a loan, advance, bonus, dividend, repayment of capital or a loan or any other payment or distribution of assets to any director, officer, partner, shareholder, related party, or associate without the prior written consent of the Regulator.
FSPs should adopt, implement, and maintain a Financial Recovery Plan aimed at ensuring compliance with the financial soundness requirements, including the Early Warning Requirements.
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