The Authorised Dealer in Foreign Exchange with Limited Authority License Application Process in South Africa

Hertz Consulting has a highly experienced team of professionals comprising of:

• Local and International bankers,

• Ex – staff of:

  • Payment Association of South Africa,

  • Financial Surveillance Department,

  • South African Reserve Bank,

  • Financial Sector Conduct Authority,

  • Compliance,

  • Risk,

  • Exchange Control

  • Money Laundering Compliance Officers,

  • Money Laundering Reporting Officers,

  • Finserv Reporting Specialists,

  • Insurance Compliance, and

  • Legal Experts,

that is available to assist your company with your end-to-end ADLA license application process and register your company with the FSCA as an FSP and with the FIC.

The Hertz Consulting team will further assist your company when dealing in foreign exchange, with an intermediary service company (Authorised FSP) offering Foreign Exchange & Global Trade solutions to Importers, Exporters and Investors in South Africa.

Definition of an ADLA:

The key aspects as defined by the SARB of an ADLA License are as follow:

The Authorised Dealer in Foreign Exchange with Limited Authority (“ADLA”) license is a license issued by the South African Reserve Bank. This license allows companies like independent money transfer operators, value transfer service providers and bureaux de change, to conduct very specific foreign exchange transactions in South Africa. When applying and obtaining such an “ADLA” license from the Regulator in South Africa, your company, its Directors, Shareholders, and employees must ensure compliance with the license conditions. Failure will lead to potential administrative as well as financial penalties, even the suspension of operations and cancellation / withdrawal of your company’s license.

By obtaining your ADLA license, it will allow your company to legally operate within South Africa`s regulatory and financial framework, increase trust and confidence between all parties involved and enable participation in the foreign exchange market, particularly your cross-border transactions.

There are four categories:

1. Category One: Bureaux de Change

2. Category Two: Bureaux de Change who can also offer money remittance services in partnership with external money transfer operators

3. Category Three: Independent money transfer operators and/or value transfer service providers

4. Category Four: Authorised Dealer in foreign exchange offering authorised services

Governance

It is important to note that the Regulator has strict Operational conditions applicable to conducting the business of an Authorised Dealer in foreign exchange with limited authority, which we define for you below:

The following operational conditions must be adhered to by an ADLA:

Capital requirements

An ADLA shall during the lifetime of its operations maintain a minimum unimpaired capital fund in a Rand denominated savings and/or investment type banking account segregated from the ADLAs business and client:

1.         Category One: R2 million

2.         Category Two: R3 million

3.         Category Three: R5 million

4.         Category Four: R8 million

The funds in the savings/investment bank account may not be withdrawn or be transferred to another bank account without the prior written approval of the Financial Surveillance Department.

The unimpaired capital must remain unencumbered and may not be ceded, pledged or used as collateral by the ADLA or any of its stakeholders.

Key aspects of an ADLA license:

• Limited Authority:

  • “ADLA`s” are authorized by the SARB to deal in certain foreign exchange transactions.

  • The rules are clearly set out in the Currency Exchanges Manual, issued by the SARB.

  • The license conditions will be set out by the SARB.

• Compliance:

  • The “ADLA” license ensures adherence to the local Exchange Control Regulations, as well as any other legislation like the requirements of the Financial Intelligence Centre Act (“FICA”).

• Typical Transactions:

  • “ADLA`s” can deal in transactions related to travel, money transfers, and other specified activities.

  • This is obviously subject to the license conditions.

• Independent Operation:

  • The SARB does permit certain categories of “ADLA`s”, specifically those operating as an independent money transfer operator, to operate independently, without the need for a partner bank. 

• Reporting Requirements:

  • “ADLA`s” has a statutory reporting obligation to the Financial Surveillance Department of the SARB regarding all their foreign exchange transactions.

• Staff requirement:

  • The Currency and Exchange Manual Financial Surveillance Department of the SARB require specific experienced staff within a company i.e.:

    • Senior Exchange Control Officer

    • Money Laundering Compliance Officer

    • BOPCUS reporting officer

    • Compliance Officer

      • At Hertz Consulting, we have an outsourced team of professionals that can assist your needs (pre and post license application).

For further information or assisting your company, please contact us at milco@hertzconsulting.co.za to enable us to discuss your needs and tailor make a solution for you.

Visit Hertz Consulting and follow us on

https://www.linkedin.com/company/hertz-consulting-pty-ltd/