FAQ's

Who needs to apply for an ODP license?

Anybody who is a market maker as defined in the regulations. In essence, if you provide a spread to your customer, you are a market maker as defined and you will require an ODP license.

I have a FAIS licence. Can I act as a market maker for OTC derivatives after my application is submitted but before my ODP license is awarded?

The short answer is “NO”. You must have an ODP license before you commence operations.
If you do so you may be liable for a regulatory sanction from the Authority. This sanction may include a fine, a suspension, cancellation of fit and proper status inter alia.

Can I operate as a representative under a registered ODP?

Yes, but there are some provisions:
a) You must yourself be an accredited CAT II licensee under FAIS
b) You may not make a market or warehouse risk that

Can I operate as a representative of a FAIS CAT II broker?

No. You may not act as a main broker representative unless the main broker holds an ODP license.

I received my ODP License and have been subjected to my first “review”. Can the FSCA take regulatory action against me for non-compliance on the first review?

Your first review was a “post licensing review”. This is a high-level review that focusses on aspects of your license application to ensure that your operation aligns with the undertakings made in your license application. The FSCA will generally not take regulatory action a result of their findings unless there is significant misalignment between your license application and your actual operation.

How long does it take for my license to be awarded?

The turnaround time for an application to be assessed may be impacted by various factors. Realistically, whilst the FSCA holds themselves accountable for certain turn around times, there are many extraneous factors that influence how soon a license may be awarded.

Can a license be withheld by the FSCAR without giving me reason?

No. The FSCA may decline your application but they are obliged to provide detailed reasons for their decision. You have the right to appeal their decision of you believe their decision to be unfair or incorrect.

How long does it take for my license to be awarded?

Can apply for a FAIS license and an ODP license simultaneously?

Yes. These are separate licenses and will be subjected to different assessment criteria and licensing fees.

My operation is outside South Africa. Can I obtain a license without being formally present in the country?

No. There must be a physical presence in the country. An office address with no physical operations on the ground will not suffice either.

Is it necessary to set up a completely separate operation for the ODP?

No. There are certain functions that are permitted to be performed elsewhere, but these can be quite specific. Light Consulting will assist you in structuring your business optimally in this regard.

FAQ's

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