Broker Commission Agreement Template for South Africa

The Broker Commission Agreement serves as a fundamental legal instrument in South African financial services, establishing the commercial relationship between financial service providers and their brokers. This document is essential when engaging licensed intermediaries to sell financial products or services, ensuring compliance with the Financial Advisory and Intermediary Services (FAIS) Act and other relevant South African regulations. It outlines commission structures, performance expectations, compliance requirements, and mutual obligations while protecting both parties' interests. The agreement is particularly crucial in regulated financial services where clear documentation of compensation arrangements is mandatory, and specific regulatory requirements must be met regarding broker conduct and client protection.

1. Parties: Identification of the principal company and the broker, including their registration details and FAIS license numbers

2. Background: Context of the agreement and the broker's appointment to provide specified services

3. Definitions and Interpretation: Key terms used in the agreement, including 'Commission', 'Services', 'Products', 'Clients', and interpretation rules

4. Appointment and Scope: Formal appointment of the broker and detailed scope of authorized services and products

5. Broker Obligations: Broker's duties, including compliance with FAIS Act, maintaining licenses, professional conduct, and reporting requirements

6. Principal's Obligations: Company's commitments regarding support, information, and product details provided to the broker

7. Commission Structure: Detailed breakdown of commission calculations, rates, and payment terms

8. Payment Terms: Commission payment procedures, timing, and handling of adjustments or clawbacks

9. Compliance and Documentation: Record-keeping requirements, FICA compliance, and regulatory reporting obligations

10. Confidentiality: Protection of confidential information and trade secrets

11. Data Protection: Handling of personal information in accordance with POPIA

12. Term and Termination: Duration of agreement and grounds for termination

13. Post-Termination Obligations: Obligations surviving termination, including commission payments and documentation

14. General Provisions: Standard clauses including notices, entire agreement, variation, and governing law