ºÚÁÏÊÓƵ

The Loan Broker Commission Agreement is essential for financial institutions in South Africa that work with external brokers to source lending opportunities. This document establishes the commercial and legal framework for broker relationships, ensuring compliance with South African financial services regulations including the National Credit Act and FAIS Act. It is typically used when a lender wishes to formalize its relationship with brokers who will introduce potential borrowers, defining commission structures, compliance requirements, and service standards. The agreement includes specific provisions for the South African market, such as regulatory compliance requirements, commission caps where applicable, and mandatory disclosures. It serves as a crucial risk management tool while facilitating business growth through broker channels.

1. Parties: Identifies the contracting parties - typically the lender and the broker, including their full legal names, registration numbers, and addresses

2. Background: Sets out the context of the agreement, including the broker's role in introducing potential borrowers to the lender

3. Definitions and Interpretation: Defines key terms used in the agreement and establishes rules for interpretation

4. Appointment and Scope: Formally appoints the broker and defines the scope of services to be provided

5. Broker's Obligations: Details the broker's duties, including compliance requirements, documentation standards, and service levels

6. Lender's Obligations: Outlines the lender's responsibilities, including processing applications and providing necessary information

7. Commission Structure: Details how commission is calculated, including rates and qualifying criteria

8. Payment Terms: Specifies when and how commission payments will be made, including any clawback provisions

9. Compliance Requirements: Sets out regulatory compliance obligations, including FAIS Act and National Credit Act requirements

10. Representations and Warranties: Contains statements of fact and promises made by both parties

11. Term and Termination: Specifies the duration of the agreement and circumstances for termination

12. Confidentiality: Governs the handling of confidential information and client data

13. Dispute Resolution: Establishes procedures for resolving disputes between parties

14. General Provisions: Contains standard legal clauses including notices, amendments, and governing law