The MFSA has on the 4th September 2018 published the ‘Consultation paper on Raising the Bar for VFA Agents’, whose main aim is to ensure that only persons with the right competencies and who are appropriately resourced, will be eligible to register as VFA Agents. Interested parties are encouraged to provide their feedback to the MFSA by no later than the 11th of September 2018.
The MFSA is proposing to:
- increase the initial and ongoing capital requirements
- introduce a rigorous competence assessment
- introduce a mandatory requirement for Continous Professional Education; and
- increase regulatory fees
- Capital requirements
Currently the proposed VFA rule book states that a VFA agent must have an initial and on-going capital requirement of Eur50,000. The MFSA is proposing to increase this to:
- VFA agents registered in terms of Article 7 of the VFA Act – Eur75,000 plus a mandatory professional indemnity insurance or a capital of Eur150,000;
- VFA agents registered in terms of Article 14 of the VFA Act – Eur75,000 plus a professional indemnity insurance on a best effort basis;
- VFA agents registered in terms of both Articles 7 & 14 of the VFA Act – Eur75,000 plus a mandatory professional indemnity insurance or a capital of Eur150,000.
- A thorough assessment of competence
The MFSA is proposing to introduce a rigorous competence assessment for designated persons of VFA agents and for at least one administrator of the VFA agent. The assessment will be based on three pillars:
- Experience and educational background wherein the MFSA will assess the applicant’s CV, taking into account work experience, education and training attended in relation to the VFA framework, fintech as well as financial services.
- Written assessment wherein the MFSA will be requiring applicants to sit for a written exam.
- Viva voce assessment wherein applicants will be required to attend for an interview with the MFSA to assess knowledge of the different business models that exist in the field.
- Mandatory continuous Continued Professional Education
The MFSA is proposing that persons subject to the competence assessment mentioned above will be required to obtain 40 hours of CPE annually so that they will be able to keep up to date with developments in the field.
- Designate persons
The current proposed VFA rule book states that an applicant shall propose two designate persons who shall be responsible for performing the activity of a VFA agent as well as an MLRO. The authority is proposing that the applicant will propose three designate persons who shall be responsible for performing the activity of a VFA agent, one of whom shall also be appointed as an MLRO of the VFA agent.
- Fees
The MFSA is proposing the application and supervisory fees for VFA agents as follows:
- VFA agents appointed in terms of Article 7 of the VFA Act – from an application fee of Eur5,000 and an annual supervisory fee of Eur5,000 to an application fee of Eur12,000 and an annual supervisory fee of Eur12,000
- VFA agents appointed in terms of Article 14 of the VFA Act – from an application fee of Eur5,000 and an annual supervisory fee of Eur5,000 to an application fee of Eur10,000 and an annual supervisory fee of Eur10,000
- VFA agents appointed in terms of both Articles 7 and 14 of the VFA Act – from an application fee of Eur7,500 and an annual supervisory fee of Eur7,500 to an application fee of Eur15,000 and an annual supervisory fee of Eur15,000
