Sports Q&A - Changes to FIFA's intermediary regulations - What do I need to know?
01 May 2019
In this month’s Q&A, we take a look at the new and more stringent intermediary regulations which are being proposed by FIFA.
What has been happening?
FIFA have been reviewing the current transfer system during the past 12 months through a specific task force established by the FIFA Football Stakeholders Committee which includes key football figures such as confederations, associations, leagues as well as player and club associations.
During this review of the transfer system, the task force has identified the topic of intermediaries as a priority and it has held a number of workshops with a representative group of intermediaries regarding proposed changes to the current regulations in order to take on board their views based on their first-hand knowledge of the transfer market.
Following lengthy consultations and negotiations with intermediaries and also the entire football community, a number of changes to the current intermediary regulations are now on the horizon.
What are the proposed changes?
The key changes being proposed to the current intermediary regulations are:
- The return of a licensing system for intermediaries and registration being made through FIFA’s Transfer Matching System (“TMS”);
- A possible cap on intermediaries’ remuneration;
- The creation of a clearing house to process payments of all intermediaries’ commissions;
- Restrictions on multiple representation being reintroduced i.e. intermediaries acting for clubs and players in relation to the same transaction; and
- The establishment of a separate investigatory and adjudicatory chamber at FIFA to investigate and impose sanctions for breaches of the regulations.
What are the implications?
The reintroduction of a licensing system for intermediaries and registration being implemented through FIFA’s TMS is without doubt a positive move. The de-regulation of the industry in 2015 opened the door to wide group of people who wished to become intermediaries and the resulting increase of intermediaries to the market has in turn led to issues regarding transparency and integrity. The proposed new licensing and registration system will require intermediaries to pass a web based exam (as per the position prior to 2015) as well as carry out regular continual professional development courses in order to retain their licence which will hopefully help eradicate some of the issues with the existing system.
The other proposed changes such as the creation of a clearing house to process payments, restrictions on multiple representation and the establishment of a separate disciplinary chamber are also welcomed changes and should protect the integrity of the industry, prevent conflicts of interests and lead to more effective regulation of intermediary activity.
However, without doubt the most controversial proposal is the possible cap on intermediaries’ remuneration. Under the current regulations, there is a recommendation that an intermediary’s commission should be no more than 3% however there is no mandatory cap and in practice most intermediaries stick to the standard 5% commission or even higher in certain cases. Whilst bodies such as FIFPro are very much in favour of a commission cap as they believe that intermediaries’ fees should be limited, any imposed cap on commission will be met with strong opposition by intermediaries and will very likely lead to legal challenges under EU competition law.
When are the proposed changes being introduced?
The FIFA Council endorsed the proposed changes back in October 2018 although there are still further rounds of consultations and negotiations with key stakeholders which are ongoing.
Some regulatory reforms are expected to be introduced prior to the start of the 2019/20 season and in addition to reforms by FIFA at an international level, it is understood that there are also separate reforms to the intermediary regulations being introduced domestically ahead of the 2019/20 season.
It is, therefore, crucially important for intermediaries, clubs and players to be up to speed with these pending regulatory changes in order to ensure compliance from day one.