Sub Broker Agreement Template for South Africa

The Sub-Broker Agreement is a crucial document in the South African financial services sector, used when a licensed Financial Services Provider (primary broker) wishes to appoint another party (sub-broker) to provide financial intermediary services under their license. This arrangement must comply with the FAIS Act, FICA, and other relevant financial sector regulations. The agreement typically includes detailed provisions for regulatory compliance, operational procedures, commission structures, and service standards. It's particularly important in situations where the primary broker wants to expand their distribution network while maintaining control over regulatory compliance and service quality. The document needs to address both the business relationship aspects and the strict regulatory requirements of the South African financial services sector.

1. Parties: Identification of the Primary Broker and Sub-Broker, including their registration details and FAIS license numbers

2. Background: Context of the agreement, explaining the primary broker's authority and intention to appoint a sub-broker

3. Definitions: Key terms used throughout the agreement, including regulatory terms from FAIS Act and other relevant legislation

4. Appointment and Scope: Terms of the sub-broker's appointment and detailed scope of authorized services

5. Regulatory Compliance: Obligations regarding FAIS Act, FICA, and other regulatory requirements

6. Duties and Responsibilities: Detailed responsibilities of the sub-broker, including client service standards and reporting requirements

7. Remuneration: Commission structure, payment terms, and any performance-based incentives

8. Compliance with Primary Broker's Policies: Obligation to adhere to primary broker's compliance manual, procedures, and policies

9. Professional Indemnity: Requirements for professional indemnity insurance and liability provisions

10. Confidentiality and Data Protection: POPIA compliance and confidentiality obligations

11. Term and Termination: Duration of agreement and circumstances for termination

12. Post-Termination Obligations: Duties and restrictions that survive termination

13. General Provisions: Standard legal clauses including notices, governing law, and dispute resolution