Bank explains how to start bureau de change |08 November 2008

Details of the steps they need to take were given yesterday by the bank’s governor Pierre Laporte and its director for financial services Jenifer Sullivan.

Ms Sullivan said the first step is to identify a company name and confirm with the registrar general that it has not been taken by another firm already and then incorporate the company.

“This entails presenting your memorandum and articles of the association which give the name and nature of the business and explain the internal structure of the organisation,” she said, adding that the applicants can work on these by themselves or seek the professional help of a lawyer, for example, and then get the registrar to incorporate the company.

She said a class A bureau de change, which can transmit money by wire, needs “an authorised capital” minimum of R1 million while class B, which only buys and sells foreign exchange, should have no less than R100,000 of authorised capital.

She said the authorised capital is a sort of guarantee that the firm would be able to meet liabilities up to those amounts.

It does not mean the companies must have that amount in cash, but they are nevertheless required to have paid-up capital of R500,000 for class A and R50,000 for class B.

“Once applications reach us at the Central Bank, we advise the interested parties whether their applications are complete or not within three working days. If the forms are not complete, we will inform them,” said Ms Sullivan.

“For class B we will be able to say whether those who have applied have been successful or not within one week but we need three weeks for class A, which requires more information.”

She said for class A this would mean the vetting of controls covering wire transmission of foreign exchange.
Among other checks for bureaux operators will be one to verify if applicants are fit and proper to run such businesses, for example they should not have criminal records.

Ms Sullivan said licences cost R10,000 for class A bureaux and R5,000 for class B. The money is payable to the Central Bank along with a non-refundable processing fee of R2,500.

Once they are in operation, the bureaux have to send in reports to the bank, which are merely for monitoring so the bank knows what is happening and not for control, as was the case before liberalisation.

Application forms may be obtained from the Central Bank or from its website: www.cbs.sc.
Those who are allowed to run bureaux de change should start operating within six months and if they do not they will need to ask the bank for time extensions.

No separate premises are necessarily required if people want to run bureaux where other businesses such as car hire centres are based, but they need to register the bureaux as new firms.