Cryptocurrency assets would be treated like financial products under South Africa’s Financial Advisory and Intermediary Services (FAIS) Act, under a draft declaration by a financial regulator.
“The Declaration would have the effect that any person furnishing advice or rendering intermediary services in relation to crypto assets must be authorised under the FAIS Act as a financial services provider, and must comply with the requirements of the FAIS Act,” wrote the Financial Sector Conduct Authority (FSCA), which is seeking comment on the proposal. “This will include crypto asset exchanges and platforms, as well as brokers and advisors.”
How each country treats cryptocurrency has major implications for which regulators oversee crypto activities and what licenses companies have to pursue. In January 2019, South Africa’s central bank published a paper saying regulatory action on crypto assets needed to be prioritized to protect consumers.
The regulator also said the declaration could improve disclosures about the risks of crypto assets to customers looking to invest. The draft doesn’t impact “the status of crypto assets in the context of other laws such as exchange control regulations, requirements under the Pension Fund Act and Collective Investment Schemes Act and so forth, nor does it attempt to regulate, [legitimize] or give credence to crypto assets,” the regulator wrote.
The draft will serve as an “interim step” between more developments from the country’s Crypto Assets Regulatory Working Group, which will impact future crypto policies in South Africa.
The FSCA is asking interested parties to submit comments on the draft declaration by Jan. 28, 2021.